Work remains more taxed than capital in France, despite Macron’s promise to fight against “rent”

After several reforms by the Head of State, a taxpayer earning a million euros in salary is taxed at more than 54 %, while a shareholder receiving one million euros in dividends will be 30 %.

by elsa conesa

“It is through the work that we build the strength of a nation”, explained Emmanuel Macron to the Rungis market (Val-de-Marne), Tuesday, February 21. The Head of State, who toe the “rent” in 2017, is determined to make it the heart of the second five -year term. This is the objective of full employment-therefore the work-which justifies the reform of unemployment insurance and that of pensions, which underpins the debate on the sharing of value, and which will be the subject of ‘A text in the spring. However, it is on the capital that his major tax reforms have brought, with powerful political markers, such as the abolition of wealth tax, which has become a property wealth tax, the creation of the “flat Tax “at 30 % on financial income and, to a lesser extent, the drop in corporate tax rate, reduced from 33 % to 25 %. So much so that today, even if households have benefited from significant tax cuts since 2017, economists agree that capital, in particular financial capital, is less taxed than work in the Hexagon.

Thus, a taxpayer earning a million euros in salary will be taxed easy for more than 54 % – the marginal tranche of income tax amounting to 45 %, to which are added 9.2 % of Generalized social contribution (CSG) and contribution for the reimbursement of social debt (CRDS) -, while a shareholder receiving one million euros in dividends will be at 30 % (12.8 % tax and 17, 2 % of CSG-CRDS, forming 30 % of the “flat tax”).

“There have always been back and forth on capital taxation in relation to labor, but historically, we have never taxed the capital gains and dividends,” notes a former senior official. To the point that Bercy had, in 2017, feared that the Constitutional Council, which had censored the tax at 75 % of François Hollande, sees a rupture of equality before tax.

Very criticized by the left at the time, these reforms aimed to erase the heritage of the previous five -year term, which had tried to align the taxation of capital with that of labor in 2012, causing bronca among entrepreneurs. France has since joined the average of other OECD countries with regard to the wealthiest taxpayers, as shown by a France Strategy in 2021 . In most Western tax systems, capital is less taxed than work, financial capital being considered more mobile than work.

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/Media reports cited above.