Emmanuel Macron announced on Monday two billion euros in tax cuts for the middle classes. Does France have the means? The eco decryption of Fanny Guinochet.
During his speech Monday, May 15 on TF1, the Head of State announced two billion euros in tax cuts for the middle classes. Economists are now wondering where the government will find the money. This Monday, Emmanuel Macron gave neither the details nor the terms. He remained very evasive about how he was going to fund these cuts.
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The President of the Republic has left all the doors open: reductions in charges, contributions on what employees pay, etc. It could also be an overhaul of the first income tax brackets, as the government did in 2019. Bercy is responsible for working, said Emmanuel Macron, and making proposals “intelligent”.
Why two billion euros?
This is the figure listed in the stability program, a sort of budgetary orientation document for the next four years, which France sent to the European Commission a few days ago. Two billion euros is twice less than the previous reductions in levies which low-income French households have already benefited from during the last five-year period. Regarding the date of this tax cut, Emmanuel Macron remained very vague. He spoke of the end of the quinquennium, adding, “when the trajectory of public finances allows it”.
This is not for now, because between inflation and the rise in interest rates, the budgetary context is not particularly favourable. The government is counting on growth, but even positive, it remains very weak. He also hopes to reap revenue through his reforms, in particular that of pensions.
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There is therefore a risk: that these tax cuts will be financed by increasing the public debt, which is already colossal, even further. It is three trillion euros. The European Commission also underlined on Monday how far France is lagging behind its neighbors. It is one of the countries that have the most difficulty reducing their standard of living and getting out of debt.
In recent days, several personalities such as Pierre Moscovisci, the President of the Court of Auditors or the Governor of the Banque de France, François Villeroy de Galhau, have stepped up to the plate. They say that, in this context, we must put an end to tax cuts, because France no longer has the means, has no more money in the coffers. A speech that Emmanuel Macron obviously did not listen to.