Faced with the public deficit and the budgetary situation deemed “very serious”, Michel Barnier is said to have mentioned a possible increase in taxes. This idea is poorly received, both by the Macronists, and by the National Rally, although it is willing to consider a vote in favor of the 2025 budget.
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– Michel Barnier is said to have hinted at a possible increase in taxes in view of the situation of public finances.
Michel Barnier did not mince his words when describing the country’s budgetary situation as “very serious”. “I asked for all the elements to assess the exact reality. This situation deserves better than little phrases. It demands responsibility.”the new Prime Minister said in a statement to AFP on Wednesday, September 18. With a new public deficit slippage expected for 2024, and in the midst of laboriously drafting the budget for the coming year, all eyes are on France’s financial health. Michel Barnier’s recent statements suggest that, to remedy this, The Prime Minister could consider a tax increase.
“I do not rule out greater tax justice, the French want and need justice”Michel Barnier already declared on TF1’s 8 p.m. news, the day after his nomination. A statement breaking with the policy pursued by Emmanuel Macron since his arrival at the Élysée. “For 7 years, we have observed fairly significant tax reductions”stated in Capital Raul Sampognaro, economist in the analysis and forecasting department. “Corporate tax and real estate wealth tax” have decreased, said Clément Carbonnier, economist and professor at the University of Paris 8. As for “the flat tax created by Nicolas Sarkozy”it was reintroduced under Macron.
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Macronists, fiercely opposed to a tax increase
Inevitably, the possibility of Reviewing the level of taxation does not convince the Macronists. Gabriel Attal, who had requested clarification of the “political line” of his successor, did not finally show up at Matignon on Wednesday morning; the meeting was postponed. He recalls having clarified “a budget that spends as much to the nearest euro as the previous year, despite inflation”in an interview with The PointThe future ex-Minister of the Interior, Gérald Darmanin, was more direct on France 2: “I will not participate in a government that is not clear on the issue of taxes.” Only the President of the National Assembly, Yaël Braun-Pivet, seemed to agree to consider it.“We need a fair tax system and for the effort to be shared by all.”she said on RTL.
On the side of the Republicans, Michel Barnier’s political family, the tone is softer. The party welcomed the “reflection” of the head of government for “more tax justice”. “If this means relieving those who work and create wealth to bring net salary closer to gross salary, it is very good news.”continued Vincent Jeanbrun, spokesperson for the LR deputies, reports AFP. On the other hand, the meeting of the party leaders, with Gérard Larcher, Bruno Retailleau and Laurent Wauquiez, expected at Matignon in the evening, was finally also cancelled.
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For the RN, the increase in taxes is a “red line”
The left, which supports the procedure for the impeachment of the President of the Republic supported by La France Insoumise and which announced that it wanted to vote for a motion of censure against Michel Barnier, agrees with the Prime Minister’s comments. “Yes, we must tax the very large assets, large fortunes and super profits which have continued to grow while the vast majority of French people have seen their purchasing power decline.”reacted Olivier Faure, the leader of the socialists, on X (ex-Twitter).
For Marine Le Pen’s party, this is a “red line” not to be crossed. “We are telling Michel Barnier again that increasing taxation and taxes for French households is a red line.”said MP Sébastien Chenu. “Before thinking about increasing the slightest tax, there are a thousand ways to reduce spending (immigration costs, social window, territorial millefeuille, “cheeses of the Republic”) and a thousand ways to increase revenue. Without imagination and without courage, Michel Barnier risks quickly finding himself without a government.”reacted Jordan Bardella, the party president, on X. The deputy Jean-Philippe Tanguy recalled on September 12 on franceinfo that the RN will vote a motion of censure in the event of a tax increase.
Is raising taxes a necessity?
Faced with the slippage of public finances – the public deficit could reach 5.6% of GDP in 2024 against a forecast of 5.1% – several voices are nevertheless being raised to defend a revision of taxation. The president of the Court of Auditors, Pierre Moscovici, notably declared that the “tax debate must not and cannot be taboo”. “Our fellow citizens, particularly the working and middle classes, feel that they are burdened with heavy taxes, while others would escape them.”he said in mid-September in an interview with Parisian.
The governor of the Bank of France, François Villeroy de Galhau, called on Tuesday for “lifting the taboo on tax increases”. In particular, it envisages “an exceptional and reasonable effort on certain large companies and large taxpayers” in order to reduce deficits, “as long as we don’t get back below 3%” public deficit, the maximum amount authorized in principle by the European Union. Even the economist Jean Pisani-Ferry, close to Emmanuel Macron, believes that“We will not get out of this budgetary situation with spending measures alone”. “On the research tax credit, we can ask companies to make an effort. And we can ask that there be an effort on the levies of the most well-off”he said on Monday, September 16 on France 5.
The whole challenge for Michel Barnier therefore lies in find a solution to the problems of French public finances without losing any possible support in the National Assembly, at the risk of falling under the effect of a motion of censure. “The rumours about taxation are pure speculation. The Prime Minister is analysing the budgetary situation and no options have been decided today.”tempers while waiting for Michel Barnier’s cabinet, reports AFP.
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