The introduction in 2018 of a flat-rate levy on capital income, nicknamed “flat tax”, supported business creation in France but had “no effect” on investment or wages in companies most benefited from the reform, according to France Stratégie.
Five years after a battery of tax reforms following the election of Emmanuel Macron, the body responsible for advising the government draws up a fifth and final assessment of the effects of the flat tax, of the replacement of the ISF by a wealth tax real estate (IFI) and the reduction from 33.3% to 25% of corporate tax.
Concerning the flat tax, which therefore reduced the taxation of capital and freed up financial resources, no effect of its implementation was detected on investment and wages among companies owned more by natural persons, according to France Strategy.
This observation is in line with numerous academic studies, which fail to demonstrate that a change in capital taxation on households can have a notable effect on the real behavior of businesses, both in terms of investment and (…) employment and level of remuneration of employees.
But it is difficult to precisely identify the companies whose shareholders would have particularly benefited from the creation of the flat tax, concedes France Stratgie.
Another important nuance is that it is possible that additional investment will take time to materialize and that researchers will therefore reach a different conclusion in a few years.
As for business creations, a study commissioned by France Stratgie from the Institute of Public Policies shows that they have progressed more quickly in the sectors of activity which have benefited the most from capital tax reforms.
Regarding the transformation of the ISF into an IFI, its cost for the public authorities was probably more than 4 billion euros according to France Stratgie.
In 2018, the IFI’s revenue corresponded to 29% of that which would have been collected by the State if the ISF had continued to exist.
Assuming that this proportion ratio remained stable over the years, ISF revenues in 2022 would have been equal to 6.3 billion euros, and the loss of revenue linked to its transformation into an IFI would therefore have amounted to 4.5 billion euros. euros, estimates France Stratgie.