the astonishing fiasco of the tax on excessive incomes | EUROtoday

This is the story of a powerful tax fiasco. That of a tax which was to herald important sums into the state coffers whereas bettering tax justice, and may in the end herald nearly 5 instances lower than anticipated, as acknowledged on Wednesday January 21 by the Ministry of the Economy and Finance. A really eloquent instance of how the wealthiest taxpayers handle to largely circumvent the frequent guidelines, and even people who immediately goal them.

This fiasco has a considerably lengthy identify, “differential contribution applicable to certain taxpayers with very high incomes”, CDHR in additional frequent vocabulary. This is a brand new tax, imagined by the federal government of Michel Barnier however which materialized within the 2025 price range that François Bayrou, then prime minister, had adopted in February 2025.

In search of latest cash to cut back the deficit, and beneath stress from the left to “tax the rich”, Bercy designed a brand new mechanism, particularly focusing on very excessive incomes. That is to say taxpayers declaring greater than 250,000 euros per 12 months for a single particular person, and 500,000 euros for a pair with out kids. The system consists of making certain that these people attain a minimal tax threshold of 20% on their declared revenue, whatever the tax loopholes from which they profit. If this isn’t the case, they have to pay the CDHR till they attain this 20%.

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