Prime Minister Gabriel Attal at the National Assembly in Paris on April 2, 2024 (AFP/Miguel MEDINA)
Gabriel Attal promised proposals on Tuesday “by June” to tax “rents”, in the hope of calming part of his majority, worried about his project to reform unemployment insurance and a poorly distributed effort to reduce deficits.
The Prime Minister announced the establishment of a working group on the subject, while the opportunity to increase taxes to restore public finances divides the presidential camp.
“We are going to resolve this debate together, because we must not suffer, but we must be on the offensive” to “move forward in a coordinated, coherent manner”, explained the head of government to the Renaissance group in the National Assembly, according to comments reported by Matignon. He hoped that “the entire majority would be involved” in this work which will be carried out by Jean-René Cazeneuve, Budget rapporteur.
Gabriel Attal had already opened the door last week to this idea of taxation. He said on TF1 that he “never (had) had a dogma on the subject” of superprofits, but refused to touch two “red lines”: the middle classes and businesses.
It is a question of differentiating “the wealth which creates employment” and that “which stagnates”, explains an advisor to the executive.
Prime Minister Gabriel Attal at the National Assembly in Paris on April 2, 2024 (AFP/Miguel MEDINA)
Taxation would apply from the 2024 budget – which would require a law rectifying this budget (PLFR) – and would not be limited to energy companies. It could relate to rents received, stock market income, life insurance or even the real estate wealth tax (Ifi).
– “Disagree” –
Left and right immediately criticized the initiative. “We don’t add taxes to taxes when we hold the world record for compulsory deductions,” castigated Republican boss Eric Ciotti, who threatens to censure the government over its management of public finances.
“Instead of these artifacts, the executive must submit a PLFR (amended finance bill) to the Assembly,” demanded the rebellious president of the Finance Committee, Eric Coquerel, recalling like the PS deputy Arthur Delaporte that there are “solutions already on the table” of the oppositions.
Gabriel Attal intends above all to respond to the concerns of the majority, whose left wing is very angry against the new reform of unemployment insurance, which could be done by decrees, without going through parliament.
The Prime Minister reiterated “assuming” such a reform but the President of the National Assembly Yaël Braun-Pivet expressed reservations, as did the President of the Law Commission Sacha Houlié, for whom reducing the duration of compensation would not help. is “not the right path”, “even though we see that unemployment is no longer falling”.
“When I hear you say that we should not reform because unemployment is stagnating, I do not agree,” Gabriel Attal replied on Tuesday, defending a reform of “productivity and prosperity”: “we wants to finance public services and nursing homes” and not “further increase the medical franchise”.
– “Very firm” –
MP Mathieu Lefèvre, from the right wing of the majority, also defended the “need” to once again modify the conditions of unemployment insurance because “340,000 jobs are unfilled”.
“Attal was very firm” because the opposition to the reform, favored by the French according to an internal poll commissioned by the executive, is “not very structured”, says another elected official from the right wing.
But a Horizons MP predicts that “it’s going to be complicated” not only at Renaissance. “It’s likely to be the case for the majority, including me.”
Jean-Marc Zulesi, left wing tendency of the macronie, suggests waiting “to see what comes out of (the) discussion” of the social partners who manage Unédic, but considers it necessary to have a “signal of the other side, on the taxation of superdividends and the fight against rents.
“This is not the first time that liberal-inspired reforms have created friction among the majority,” said a close friend of Emmanuel Macron. “It’s up to the Prime Minister to ensure that this is understood and accepted.”
But, he insisted, “this is not an accounting approach (…) increasing activity allows us to increase revenue and therefore reduce the deficit”.
This reform comes at a time when the executive is seeking to make savings everywhere after the unprecedented slippage of the deficit to 5.5% in 2023.
Gabriel Attal reiterated on Tuesday that he still wanted to bring it back to 3% in 2027 and recalled that the government would give “the trajectory” next week to achieve this objective.
© 2024 AFP
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