In an interview with the newspaper Les Echos, the French President François Hollande has announced a tax cut for the middle class in 2017. A final tax measure in his five years.
“I said last spring that a further reduction of taxes on households was possible […] I stay on the same position: if, despite the Brexit, growth was 1.7% in 2017, this gesture tax, which could not exceed € 2 billion, would be in addition to the relief provided since 2014, which have already affected 12 million taxpayers.”
It is in the daily Les Echos that Francois Hollande has chosen to announce a new tax cut. It should, this time, affect the middle class. A measure that strengthens the fiscal policy of the head of state, conducted in two phases: a tax increase at the beginning of his term, followed by a decrease in the second part of the five-year period.
Increase in VAT in 2012.
In November 2012, the Ayrault government announced its wish to increase VAT (from 2014). Social VAT Nicolas Sarkozy leaves room for Solidarity VAT. . The stated goal: to recover 7 billion euros The executive expects a decrease in Reduced VAT (food, equipment and services for the disabled, subscriptions gas and electricity …) from 5.5% to 5%; a slight increase in the normal VAT (tobacco, gasoline, energy, repairs, appliances …) from 19.6% to 20%. And above all jumped 7% to 10% of the intermediate VAT concerning Restaurant and the building sector. The measure does not fail to trigger protests from professional organizations in the sector.
Higher taxes for households
Other surprises for households this time: the freezing of the scale of income tax and Tax solidarity on the Fortune normally raised in line with inflation. The measure has indeed been adopted under the Fillon government, but is maintained by the Ayrault government. And so it is early in the five year some households find a consistent bill of about 2% more. Some households, hitherto exempt, enter the tax. The widows also see their tax half share deleted, following a vote of the previous government. At the same time, a tax bracket of 45% is created for the rich. A 75% windfall tax is also set up for the higher earned income to a million euros per year per taxpayer. and solidarity tax on wealth is raised.
Relief for companies
reversal of the trend in 2014. Holland is implementing a business support, with Responsibility Pact. This measure reduces 40 billion payroll taxes by 2017. It includes, among others, a tax credit (the CICE) calculated on the payroll. A gift tax which provides for a consideration in terms of employment, training and investment. The government hopes to boost activity and bring down the unemployment rate.
Tax Reduction for smaller
In 2015, 9.45 million households are involved in tax relief. Because in 2014, the National Assembly had voted to delete the first tranche of income tax at the rate of 5.5%. She was accompanied by a tax mechanism (the discount) which allows some households to pay less tax.
Nearly three million taxpayers, the poorest households, and come out of taxes or does not enter.Now the French are taxable from € 9,690 in annual revenues (€ 6,011 before), with a new first tranche to 14%.