Taxes: how Michel Barnier could increase them for the richest

During his general policy speech this Tuesday, October 1, the Prime Minister confirmed that the wealthiest French people would be taxed more heavily. The details will be revealed during the presentation of the 2025 Budget, but several avenues are mentioned.

The commitment not to increase taxes will not be kept for all French people. During his general policy speech to the National Assembly this Tuesday, October 1, Michel Barnier confirmed that the restoration of public accounts would not be done without pain. Qualifying as “a real sword of Damocles (…) our colossal debt of 3,228 billion euros”the Prime Minister pledged to reduce the public deficit – expected above 6% in 2024 – to 5% in 2025, largely thanks to a reduction in spending. But the effort will be “sharing”he clarified: the tenant of Matignon in fact requested “participation in collective recovery for large and very large companies which make significant profits” as well as“an exceptional contribution to the most fortunate French people”.

How exactly does Michel Barnier intend to proceed? To date, nothing is certain, with the head of government meeting parliamentarians on October 9, the date of presentation of the finance bill (PLF) for 2025. But certain avenues for taxing the wealthiest taxpayers more seem to have the favors of the executive. First of all, the freezing of the upper brackets of the income tax scale, a measure which would increase the income tax of the richest tax households by a few hundred euros. Another possibility, according to the Macronist deputy for Paris, David Amiel, cited by Les Echos: create a “tax net” to implement a minimum income tax of 25%. Thanks to massive tax exemption practices, some very wealthy people manage to very significantly reduce their tax rate! With this “tax net”, this will no longer be possible.

Confiscatory taxation?

But to hear the Prime Minister’s comments this Tuesday, October 1, the possibility of increasing the exceptional contribution on high incomes (CEHR) seems to hold water. A contribution which, since 2012, has been added to income tax and reaches 3% for single people whose reference tax income (RFR) exceeds 250,000 euros (500,000 euros for a married couple or civil partnership) and 4% from 500,000 euros (1 million euros for a couple). This “surtax”, which brings in around 1.5 billion euros to the State, could be tripled within the framework of the Budget for 2025, soon to be submitted to a vote by parliamentarians, announces Le Parisien. An operation which could bring in 3 billion euros to the state coffers.

If the households potentially affected by this measure have cause for concern, there is however no guarantee that it will see the light of day. Because with a CEHR rate boosted to 12% maximum, compared to 4% today, “the tax rate could reach 74.2% for property income for example, including 45% income tax, 12% CEHR and 17.2% social security contributions”calculates Patricia Jolicard, tax lawyer associated with the Fidal firm. That is 8% more than the taxation suffered by these same incomes currently, of 66.2%. A rate which already seems to be a maximum. Indeed, according to Lukasz Stankiewicz, director of the Center for Financial and Tax Studies and Research at Jean Moulin Lyon 3 University, “taxation is already on hold” for these audiences. The expert here refers to an opinion from the finance section of the Council of State from 2013 which then estimated that cumulative marginal taxation of income could not be higher than 66.66%. That’s barely more than the rate that hits the highest taxed income. However, nothing prevents the government from increasing the CEHR more modestly, for admittedly lower tax revenues, but an important political symbol. Answers from October 9 with the examination of the PLF in the Assembly!