The Prime Minister, Elisabeth Borne, spoke of “tax cuts for the middle classes by the end of the five-year term” April 27. To this promise, Emmanuel Macron added a figure: 2 billion euros. “I asked the government to make me proposals so that (these 2 billion euros of cuts) focus on these middle classesconfirmed the Head of State in his interview on TF1, Monday, May 15. That is to say the French men and women who work hard, who want to raise their children well and who today, because the cost of living has risen, because the dynamics of salaries is not always there , are struggling to make ends meet. »
In April, inflation rebounded, to almost 6% over one year according to INSEE, with almost 15% increase for food prices alone, and 7% for energy prices. Opposite, the index of the basic monthly salary in the private sector increased by 4.6% over one year, according to provisional data published by the Ministry of Labor.
Not much has filtered at this stage of the government’s projects, neither on the format of this new tax cut nor on its timetable. It will be “in this mandate”simply indicated Emmanuel Macron, referring to the “fiscal trajectory”in other words the public finance forecasts transmitted to Brussels by Bercy at the end of April, which detail the procedure to be followed to bring the public deficit below 3% of the gross domestic product in 2027. Even if it seems difficult to imagine returning at the end of five-year term, a measure announced twice in less than three weeks.
If he favored a “tax reduction”Emmanuel Macron does not want “close doors”. “Can there be smart things to do on part of the charges you pay, the contributions paid when you are an employee? », he suggested. Reductions in employee contributions would have the merit of almost immediately boosting the end of the month, and of offering workers “a more important living space for them”. Those whose income is between 1,500 euros and 2,500 euros are particularly targeted, because they are penalized by the “socio-fiscal” system, had judged, a few hours before his intervention, Emmanuel Macron in an interview with Opinion.
The risk of new unfunded measures
Taxation “crushes purchasing power gains between 1,500 and 2,500 euros”, he explained, adding that for this category of income“we have to work to see how to reduce what is called the tax-social wedge”. This indicator measures the relationship between what an employee receives at the end of the month after tax, and what it costs his employer, including social security contributions. In this income bracket, wage increases tend to be quickly absorbed by compulsory levies, and therefore offer little incentive.
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