Tax hike: Barnier to make increases official, who will pay more ?

The Prime Minister will shortly announce future tax increases that could come into effect as early as 2025.

A bomb dropped in the middle of a political storm. “Michel Barnier plans to raise taxes”: this article, published by Le Parisien September 17, shook part of the country. While the new Prime Minister had still not announced his government, the idea of ​​a tax increase was reported to the media. It was not simply a matter of testing a possible measure with public opinion, but of starting to prepare minds for higher taxation by the State in the coming months. to come.

Outcry on the left, opposition from the RN and, above all, anxiety in households. Especially since the rumor has been confirmed over the days. The government plans to really increase taxes. However, Michel Barnier and his Ministers of the Economy and the Budget have specified the outlines of the future modifications. With a line of conduct: not 1 euro increase for the most deprived and the middle class.

The State intends to introduce higher levies on the wealthiest households and businesses. At this stage, it is only a question of exploring various avenues and calculating the revenues they could generate. Nothing has been definitively decided yet. Decisions will be made in a few weeks.

Previously, Michel Barnier's general policy speech, delivered Tuesday, October 1st before the National Assembly, then the presentation of the 2025 budget, scheduled for Wednesday, October 9th, will allow us to know the government's real ambitions on future tax changes. The debates of the deputies, then of the senators, will not fail to create many twists and turns. In any case, the political class will have to agree before December 31st at the latest.

Latest updates

13:22 – Will MPs vote in favour of tax increases ? 

This has been the whole question since the result of the legislative elections. Split into three large blocs, the National Assembly is more divided than ever. So, what about the 2025 budget ? Not having the support of 289 deputies (absolute majority), the government risks running into opposition from the NFP and the RN. However, he has a weapon to force the budget through: the famous article 49.3 of the Constitution. If this is used, a motion of censure can then be voted on. If it is adopted (289 votes minimum), the government is overthrown and everything starts again from scratch. If it is not adopted, the text then comes into force because this means that a majority of deputies did not oppose the government. What will the scenario be like ? The fog is still thick: will the NFP and the RN join forces ? That's the whole question for the coming weeks.

12:20 – What are the most serious tax increase options ?

As the official announcement of the future tax increase arrives, some options are becoming more and more clear. According toLe Monde, an exceptional tax on the profits of large groups should be submitted to the vote of the deputies, as well as a tax on the repurchase of shares, a higher tax on the purchase of polluting cars, as well as the end of a tax advantage on short-term rentals such as AirBnb. On the income tax side, nothing should ultimately change.

Minister responsible for the Budget, Laurent Saint-Martin has officially indicated when the precise terms of the tax increase will be revealed: it will be Wednesday, October 9. On that day, the minister will present the draft budget for 2025, before it is debated in the National Assembly, then in the Senate. The main points will also be revealed during Michel Barnier's general policy speech on Tuesday, October 1.

11:23 – An impossible return of the ISF ?

The idea has been widely publicized, particularly by the left, which is promoting the measure: the reinstatement of the wealth solidarity tax (ISF). Abolished by Emmanuel Macron in 2017, it affected 358,198 households and brought in just over 5 billion euros to the Treasury last year. The replacement system – the property wealth tax (IFI) – is proving to be a much smaller tax bonanza: “only” 175,980 households have to pay it, for a total revenue of 1.9 billion euros in 2023. 3 billion less in income: not a straw, when you consider that you now have to find 20 per year. However, Michel Barnier has never spoken publicly of such a project, which would reverse a flagship measure of the first five-year term and La Tribune affirms that the return of the ISF is not on the agenda.

10:59 – Are we going to pay more income tax ? It's possible

Until recently, this was completely ruled out: beware of the possible reversal of the situation. Each year, the income tax brackets increase at the rate of inflation, so that the amount of tax does not increase if income evolves at the same rate as inflation, in order not to penalize households. However, Michel Barnier is reportedly considering freezing the evolution of the scale for 2025, probably on the highest brackets, those taxed at 41 and 45%. This would therefore concern households declaring at least 6,860 euros per month to the tax authorities.
 

10:21 – Macronists oppose tax increases

27 deputies and former ministers of Emmanuel Macron, affiliated with the presidential group Ensemble pour la République (EPR) are opposed, in a text published by La Tribune, to any increase in taxes, while Prime Minister Michel Barnier is considering making those who can contribute more, “in an exceptional and temporary manner”. "It seems to us […] unthinkable that after seven years of tax cuts, it would be the alliance of the central bloc which would end up giving up on tax cuts. stability tax to increase them, éwrite Mathieu Lef&evre;vre, Charles Rodwell, Aurore Bergé, Marie Lebec and even Sylvain Maillard. 

2 7/09/24 – 2:46 p.m. – A tax on electricity increased by 50% ? 

The option appears to be on the table. According to Les Echos, the TICFE (domestic final consumption tax on electricity) could increase from 21 euros to 32 euros at the beginning of 2025. This is a tax paid when settling your electricity bill and paid to the State. Emmanuel Macron had lowered it to 1 euro during the energy crisis to stem the rise in the cost of producing electricity. As these costs are now falling, it is being considered to increase the tax again. The overall bill could still decrease, but less than if the TICFE remained at its current level.