French MPs reinforce new budget’s tax rises for wealthy
Three-year limit on tax increases removed, paving way for permanent increase
Prime minister Michel Barnier's 2025 budget will be debated in the Assemblée nationale next week
Victor Velter / Alexandros Michailidis / Shutterstock
Preliminary screening of the new French budget has already seen amendments to the bill, before debates in the Assemblée nationale begin on the text next week.
Notably the temporary nature of tax increases on wealthy households has been removed.
The highly controversial budget – which prime minister Michel Barnier and his allies need to pass through without a majority in the chamber – was scrutinised by the Finances de l'Assemblée (Finance Commission) yesterday (October 16).
The commission approved of the bill’s higher taxes on wealthy individuals but removed the temporary nature of the former.
Read more: Tax increases and spending cuts: France's 2025 budget revealed
In the original text, tax increases on the 24,300 wealthiest households were to take place for three years.
The government originally estimated around 62,500 households would be affected, but later confirmed the actual number to be much lower.
However, an amendment jointly added by the left-wing alliance Nouveau Front Populaire (NFP) and Modem (centrists in the governing alliance) removing this time limit was passed.
It means the tax increases will remain in place – if the budget passes without the text being further altered - until a future decision and vote to cancel them is passed.
These tax rises – which raise the minimum overall tax on these wealthy households to 20% – are expected to raise around €2billion each year they are enforced.
A rewriting of this area of the budget by the Commission concerning this extra tax has also made it more difficult to bypass paying the tax through the use of credits or tax breaks.
“There are fewer opportunities for tax avoidance [optimisation fiscale - through various legal mechanisms] in my amendment than in the government's text,” said independent centrist MP Charles de Courson, who rewrote the text, which was subsequently passed.
What next?
The wider budget will now be debated in both the Assemblée nationale and the Senate in the coming weeks, where the government is hoping the bill will pass with a simple vote.
Wider debates will begin on Monday (October 21).
It is likely to pass in the Senate – this is majority right-wing controlled – but it is a different story in the Assemblée nationale.
Although MPs in the Finance Commission – including those from the left – voted to accept this amendment to the bill, they have a clean slate to vote on the overall budget when debates in the chamber begin.
All left-wing MPs in the chamber will almost certainly vote against the bill.
In addition, the far-right Rassemblement National (RN) confirmed yesterday it would not vote in favour of the budget under its current iteration.
It may still pass if the RN chooses not to vote either for or against and merely abstains, however if its MPs choose to oppose the text, the budget has little chance of passing via a vote.
The government could choose to pass the budget without a vote, via the controversial article 49.3 method, but this leaves it open to a vote of no confidence (motion de censure).
If the RN, angered by the forced passage of the bill, chooses to vote against the government here - the left will almost certainly do so - the combination will immediately topple the government, leaving the country in chaos and without a budget for the upcoming year.
Read more: Explained: What is a motion de censure in French politics?
