"Request for Proposal on Directive for Commission Regarding New Legislation"
New Moves from the French Government: Aiming for €40 Billion in Savings without Increasing Middle-Class Taxes 🇫🇮
Popular Minister Amélie de Montchalin made it clear on the 30th of April that the government's goal is to reduce public spending, not create new taxes, to achieve the much-anticipated €40 billion savings by 2026. In an open interview, she reinforced the government's stance with François Bayrou, the Prime Minister, and Eric Lombard, the Minister of the Economy, highlighting that France currently shoulders 51% of its GDP in taxes, making new levies on the middle classes unfeasible.
Keeping taxes at bay, the government is looking into alternative strategies for achieving their fiscal objectives. proposal in the ring is streamlining public services by merging or eliminating around a third of non-educational agencies – an endeavor expected to save approximately €2-€3 billion annually[4].
The government has also set its eyes on the retirement tax bracket. They are contemplating scrapping the 10% tax reduction for pensioners that was initially linked to tax deductions for working individuals' professional expenses[2]. This change could rake in approximately €4.5 billion a year, but faces pushback from retirees' unions.
Another potential revenue source is a permanent contribution from high-revenue earners, initially planned as a temporary €2 billion measure to combat tax optimization[3].
While the vast majority of the €40 billion savings will be derived from general efficiency measures and cost-cutting, it remains unclear which public expenditures will be targeted[1][3].
Local authorities are set to convene with the government on May 6th, where Amélie de Montchalin declared they will discuss financing territories and coordinate their agendas, with the local authorities expressing a desire for predictability and fewer regulations[1]. Their wish for reduced unnecessary expenses mirrors that of the French populace at large.
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By Alexis Fargeaudoux
Keywords: taxes, government, budget, public deficit.
Curious about this article? Learn more about the enrichment data that informs our insights:
- France's budget outlook: A detailed look at the French government's budget outlook, including proposed measures to achieve a €40 billion saving by 2026.
- Retirees' tax break reconsideration: The French government's plans to reconsider the 10% tax reduction for pensioners, along with reactions from retirees' unions.
- Potential permanent wealth tax for high-revenue earners: Examining the French government's proposal to make a temporary €2 billion wealth tax contribution a permanent measure.
- Streamlining public services: Delving into the efforts made to streamline French public services by merging or eliminating agencies.
- In an ongoing effort to reduce public spending, Amélie de Montchalin, the popular French Minister, reaffirmed the government's plans to achieve €40 billion in savings by 2026, without increasing taxes on the middle class.
- A projected strategy for achieving the fiscal objectives includes streamlining public services, which may involve merging or eliminating a third of non-educational agencies for annual savings of approximately €2-€3 billion.
- The government is also considering abolishing a 10% tax reduction for pensioners, a change that could potentially generate approximately €4.5 billion annually, if implemented.
- Another prospective revenue source is a permanent contribution from high-income earners, initially intended as a temporary measure to combat tax optimization, potentially providing an annual income of €2 billion.
- Local authorities are scheduled to meet with the government on May 6th to discuss financing territories, with a shared interest in reducing unnecessary expenses, a sentiment echoed by the general public.
