This Monday, March 6, the Prime Minister, Élisabeth Borne, has just made an announcement concerning fairer income tax. Indeed, the withholding tax rate will be individualized from the year 2025. We explain!
There taxation in France is defined according to a very clear framework that many individuals still have difficulty understanding. It is not so simple ! Especially when technical changes shake up years of practice. The French Prime Minister, Élisabeth Borne, has just made an announcement through her Twitter account this Monday, March 6, 2023 announcing a change in the withholding tax rate. She explains that the individualized default rate will be retained from 2025. ” Taxation should not be an obstacle to the emancipation of women, especially those who have a significant salary gap with their spouse. From 2025, the tax rate will be individualized by default for all tax householdsshe wrote on Twitter.
A reform that is part of the progress towards equality between men and women. But for what reasons? And what does the individualized default rate mean? To understand, you must already grasp the notion of individualized rate. Indeed, a household in France can choose between three rates at the moment. The neutral or non-personalized rate, calculated on the remuneration paid and not on the tax return. THE personalized which corresponds to the household tax rate and finally theindividualized who will be different for both spouses what a couple forms. It is important to note that at the end when paying taxes the amount paid by the couple remains the samebut the distribution fits better with what each individual actually earns.
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What does this actually change?
In fact, the tax is not at all individualized and the amount paid by the couple remains the same, it always depends on the income of the couple as a whole and on the share of the family quotient. All other charges and income are always split in half. But it will be beneficial to the spouse in the household who earns less. Indeed, at present the rate increases according to income, the tax rate applied will then be calculated on the highest incomes. If one person in the couple earns much less than the other, his salary will be reduced much more than the person who earns more since it is the personalized rate that is applied, calculated on the higher income (generally that of the man ).
The proposal to apply a default custom rate will then make it possible to return this direct debit fairer. No need to make a request on its online space to change the rate. The administration has communicated the way in which this rate is calculated: it defines the rate that the person in the household whose income is the least important would pay if he were not in a couple, then that of the couple on their combined income. THE spouse with the highest income will therefore be seen apply a rate equal to the difference.
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Why is it advantageous for women?
This is an INSEE study which recalls that “Conjugalization increases the marginal tax rate of spouses who have the lowest resources in the couple by six points on averagethree-quarters of whom are women“. This is why the application of an individualized rate will therefore make it possible to favor women. At the present time men benefit much more from it:What lowers their taxes is having a companion who earns little – whereas if the calculation was individual it would have no impact. They are as if rewarded by the fact that their wife earns little or that she does not work full time.“. deplores Titiou Lecoq in his bookmarriage and money.