the taxation of assets has become more efficient

How best to tax capital? By imposing it too much, there is a great risk of seeing those who owe it go abroad. “Bet won, subject to further study”, seems to say the Committee for the evaluation of the reforms of the taxation of capital set up during the tax reform of 2017, composed of members of the tax administration, trade unionists and experts.

The “president of the rich”

Barely arrived at the Élysée in 2017, Emmanuel Macron implemented a reform of the taxation of wealth whose stated objective was to maintain in France, if not the return, of productive capital. What earned him to be described by his opponents as “president of the rich”. What is it exactly?

On the one hand, going back to a provision put in place in 2013, income from assets – including dividends, life insurance but not the livret A – have been removed from the progressive taxation of income tax which was then applied to them. They have since been subject to a single flat-rate deduction (PFU) of 30% (12.8% for income tax and 17.2% for social security contributions), far from the 45% of the last tranche. income tax.

On the other hand, the solidarity tax on wealth (ISF) has been abolished in favor of the IFI, tax on real estate wealth, based on real estate assets alone, beyond 1.3 million euros , in order to free the capital employed in the productive apparatus from this tax.

Positive effects

In 2018 and 2019, the number of returns from households taxable at the IFI exceeded the number of departures (340 versus 280 in 2019)”, point out the authors of a France Strategy reportpublished Thursday, October 20 – compared to some 130,000 taxpayers subject to the IFI in 2019. And the rate of return of the wealthiest is even increasing.

Public finances have seen their revenue increase, despite the drop in tax rates due to the existence of the PFU, because income thus subject to tax has increased by 7 billion euros, or + 21% between 2017 and 2020.

As to whether household capital taxation affects the investment behavior of the rich, it is quite difficult to highlight it”, indicates the report. A study on the rate of business creation and the reinvestment of earnings in businesses was commissioned from the highly respected Institute of Public Policy.

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