A report from France Strategy, a body attached to Matignon, notes that the reforms have not had an effect on investment while they have increased the concentration of dividends in the richest.
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This is a report that will not fail to debate, six months of the presidential election. Following the campaign promises of Emmanuel Macron, the Solidarity Tax on Fortune (ISF) had been replaced in 2018 by a tax on real estate wealth (IFI), at the same time that was established a ” Flat Tax “, a unique lump sum of 30% on capital income (interest, dividends …). Nearly four years later, a coordinated report by France Strategy, the evaluation and prospective organization attached to Matignon, delivers undertaking conclusions as to the effectiveness of the famous “runoff” by which, insured the head of the State and its majority, the less taxed amounts would irrigate the economy and, thus, would benefit all the French.
“The observation of major economic variables – growth, investment, flow of financial investments of households, etc. -, before and after the reforms, is not enough to conclude on the actual effect of these reforms. In particular, It will not be possible to estimate by this ground if the removal of the ISF has allowed a reorientation of the savings of the taxpayers concerned towards the financing of companies “, indicates the opinion of the assessment committee of the reforms of the Taxation, published on Thursday, October 14, that Le Monde could consult. The study of this working group consisting of economists, deputies, representatives of INSEE, the Treasury or the MEDEF and the CFDT is a third component, after two reports in 2019 and 2020, which analyzed more the “Flat Tax” that the ISF.
In addition to a further decline in the evaluation (2018-2020), researchers have used new items: they have paired business statistics and household data, and connected Shareholders with payable taxes. What to study for the first time finely the effects of the removal of the ISF. One of the arguments often resumed by the opponents of this tax was its detrimental role on the dynamics of companies: shareholders of SMEs and intermediate enterprises (ETI) subject to the ISF would be paid (or would be paid) of the dividends important, in order to fulfill it, preventing companies from using otherwise this money. Missed.
“The companies whose shareholders were until 2017 subject to the ISF did not invested further,” says Fabrice Lenglart, the Chairman of the Evaluation Committee. Even flop on business transmissions, also deemed to be hindered by the ISF – the assignment of a company was losing the exemption from the ISF on professional property, and the leader could hesitate to transmit it to risk of growing up with. The researchers point out that there has been no inflection of the age of the leaders since the removal of tax or noticeable effect on governance.
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