According to a study by the Institute of Public Policy, the 37,800 wealthiest French households are proportionally less taxed than more modest households. The IPP also considers the reintroduction of a wealth tax to be ineffective.
All personal taxes remain progressive (proportioned to income) up to a high level of income, observe the four authors of the note from the Institute of Public Policy (IPP), based on data from the year 2016. But they observe a strong regression in the overall tax rate once the threshold of the richest 0.1% of French people is crossed.
The 37,800 aiss households, which receive more than 627,000 euros annually, have an overall tax rate of 46%. But this rate decreases as the income of these ultra-rich increases, up to 26% for the 75 wealthiest tax households.
Figures explained by the composition of income
This is explained by the composition of income: that of the richest French come mainly from undistributed corporate profitswhich are therefore subject to corporation tax (IS) rather than income tax (IR).
This transfer from a taxable income base the IR to a taxable income base only the IS is not neutral, insists the IPP. In this way, the tax rate based on personal income and assets, at around 59% at its highest, is replaced by the much lower corporate tax rate of 33.33% in 2016 (and 25% currently), explain the authors.
However, this is not a French exception. Studies conducted in Sweden, the Netherlands and New Zealand thus indicate a form of regressivity at the top of the income distribution.
While a recent report by economist Jean Pisani-Ferry suggested temporarily restore a form of wealth tax to finance costly investments in the ecological transition, this type of sampling could not correct the regressive that we document, warn the authors.
This track a back ISF card, the IPP considers it possible to tax the undistributed income of holding companies the personal income tax to capture part of the resources of the ultra-rich who escape the tax.
If the taxation of the holding proves to generate new forms of optimization, one could consider the taxation of individual shareholders who are tax residents in France on all the results not distributed by the controlled companies, adds the Institute.
The study does not take into account the effects of the reforms that have occurred since 2016as the replacement for the ISF by a tax on real estate assets or the introduction of a flat-rate levy of 30% on capital income.
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