The Ministry of Economy and Finance in Paris, March 20, 2024 (AFP/Archives/Emmanuel Dunand)
The hunt for “rents” to fill part of the public deficit is on, with the establishment of a parliamentary task force responsible for identifying avenues, but these are still vague.
Faced with the public deficit slipping in 2023 to 5.5% of GDP (gross domestic product) compared to 4.9% forecast, the government announced drastic savings in February, 10 billion euros in 2024 and 20 in 2025.
To fill the hole, he could also have decided to increase taxes, but refused to do so, out of concern for consistency with his policy pursued since 2017.
“Never” will the government increase taxes on “working French people” or on “the fruit of their savings”, assured Prime Minister Gabriel Attal on Wednesday in the National Assembly.
On the other hand, there is now a question of “taxing rents”, a notion likely to achieve consensus, both to reduce the deficit a little, and to satisfy part of the majority worried about government plans to toughen the conditions of unemployment insurance, or wanting to see “super profits” taxed.
Four deputies from the majority are responsible for thinking about it in the coming weeks: the budget rapporteur Jean-René Cazeneuve, the Renaissance deputy Nadia Hai, the head of the MoDem deputies Jean-Paul Mattei and the Horizons elected official François Jolivet.
But what “rents” will be discussed in this working group? “I have been asking myself this question for a week,” explains to AFP Philippe Bruneau, the president of the Cercle des Fiscalistes, a think tank regularly consulted by public authorities when they carry out this type of reflection.
“For my part, I know what an annuity is in the tax sense of the term, which does not seem to be what is currently being considered,” he continues.
This specialist is therefore reluctant to consider as an annuity the exceptional profits of certain companies having made a lot of money during recent crises, because “who says exceptional profit, also says the possibility of exceptional losses” in a less favorable situation.
Mr. Cazeneuve presented his own definition of annuity, Thursday on LCP: “What is not directly or indirectly the result of your work, (that is to say) these are very important profits, which some call +superprofits+ which would not be linked to the performance of the company but to the economic context, linked to inflation…”, he said.
– “No longer the objective at all” –
At the very least, it could involve trimming the contribution to the “inframarginal income” of energy companies, which only brought in 600 million euros in 2023 compared to the three billion euros hoped for.
The public accounts of France (AFP/Archives/Bertille LAGORCE, Sabrina BLANCHARD)
“I want us to recalibrate this taxation”, but also to “look at all sectors of activity: transport”, including highways, or even “pharmaceutical laboratories”: “We will look at everything”, says Ms. Hai, classified on the left wing of the presidential camp.
Share buybacks by companies could also be in the sights: “it is not directly an annuity, but money which is not put at the service of investment”, according to Mr. Cazeneuve. Mr. Mattei would be in favor of this taxation, as well as that of “superdividends”.
The four parliamentarians have until the end of June to present their proposals, with a “progress update” in May.
The government has not quantified what it hopes to gain from this review, as a perilous sequence begins, with a risk of downgrading France’s sovereign rating by the Moody’s and S&P Global agencies in a few weeks and then European election of June 9. The Fitch agency, which lowered the rating last year, considers a further downgrade as “unlikely”.
Before this sequence, the government intends to publish new data from its multi-annual stability program (PSTAB) next week.
With undoubtedly new explanations difficult to give, because despite this review of “rents”, or the ten billion euros of emergency savings announced for this year, it is “very probable”, after the slippage of 2023, “that the 4.4% planned for 2024 is no longer the planned objective at all,” declared Mr. Cazeneuve on LCP.
© 2024 AFP
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