“Justice is the condition of effort.” Questioned this Sunday, August 31 on Franceinfo, BFMTV, CNEWS and LCI, the Prime Minister defended the reform of the tax abatement of retirees, which appears in its savings plan of 43.8 billion euros announced on July 15. As a reminder, the Head of Government intends to transform the current reduction of 10% on the income of taxpayers who are no longer active in an annual package of 2,000 euros per retiree. Consequence, while the applied deduction can reach a maximum of 4,399 euros on the income of 2024 declared in spring 2025, it will be limited to 2,000 euros for a single retiree or 4,000 euros for a retired couple, if the budget for 2026 is adopted by Parliament … which is Everything except certain at this stage.
But what would this reform for retirement tax change? She would do winners and losers. For the tenant of Matignon, “The evolution of the measure will gain hundreds of euros to the modest retirees, from the bottom of the scale”. More specifically, around 100,000 individuals (1% of retirees) would benefit from a tax drop if the new reduction does not play on the amount of social benefits – in particular housing aid -, notes a Study of the Institute of Public Policy broadcast this summer. Who would these winners be? Single retirees whose taxable income is less than 20,000 euros or those in couple with a taxable income cumulative below the threshold of 40,000 euros.
The losers could pay much more!
But would they really earn several hundred euros in tax, as François Bayrou advances? Taxpayers with income less than 19,000 euros not paying income tax, let’s take the example of a single retiree who receives a pension of 19,800 euros. Today, with the 10%reduction, it pays 122 euros in tax. With a lump sum deduction of 2,000 euros, its tax will drop by only 4 euros, to 118 euros. It will be barely better with 19,500 euros in taxable income, since this same single will pay 70 euros in tax against 78 euros with the 10%reduction. Result: with the new tax deduction, Modest households will only earn a few euros.
A limited tax saving, but a larger tax supplement for losing homes. Thus, with 44,000 euros in income, a single retiree pays today 5,046 euros in tax. Next year, with a reduction limited to 2,000 euros, he will have to pay 5,765 euros to the taxman, or 719 euros more!
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