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To turn the heavy page of pensions as quickly as possible, the President of the Republic announced in the newspaper L’Opinion, Monday, May 15, that he wanted to lower taxes for the middle classes. But is it feasible?
The presidential promise is beautiful, to lower taxes for the middle classes. But the installation seems much more complicated. Today, a single person who earns 1,500 euros net per month pays 178 euros in income tax per year. For 2,000 euros in salary, this increases to 1,090 euros per year and goes up to 2,147 euros for 2,500 euros per year. The idea could be to soften the entry into the tax. “There are several possibilities that exist: changing the thresholds, lowering the tax rate on certain brackets”explains Gabriel Attal, Minister of Action and Public Accounts.
An inexplicable message given the economic situation
Income tax is calculated in brackets and the government could be tempted to lower the rate currently at 11%. Otherwise, it could add an additional slice, but this measure could also benefit people with higher incomes. To increase the purchasing power of the middle class, the government could also increase the net salary by playing with employee contributions. “A message that we can understand politically, but which is not necessarily explainable at the moment”, in a period of weak growth, according to Anne-Sophie Alsif, chief economist of BDO France. After the Yellow Vests crisis, the government had already lowered taxes.
Among our sources
Directorate General of Public Finances (DGFIP)
Matthew Plane
Anne-Sophie Alsif
Non-exhaustive list
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