Europe 1 with AFP 4:52 p.m., October 14, 2021

The abolition of the ISF and the introduction of the "flat tax" on capital income have not yet resulted in measurable positive effects on the economy, according to a report published on Thursday. The latter does not therefore conclude at this stage to the reality of a "runoff" defended by Emmanuel Macron in 2017.

The major reform of the taxation of capital at the start of Emmanuel Macron's five-year term has at this stage had little measurable effect on investment in the economy of the wealthiest, according to a report released on Thursday.

Established in 2018 with the aim of encouraging the wealthiest taxpayers to invest in the economy, this reform abolished the wealth tax and created a tax on real estate wealth (IFI), and implemented a flat-rate levy unique on capital income (PFU, or "flat tax").

Criticized as a "gift" granted to the better-off, it is the subject of in-depth monitoring and evaluation by a committee, placed under the aegis of France Strategy, a body responsible for advising the government, which reported on Thursday its third report.

"No effect identified on the investment"

Thanks to unpublished tax data, they note that "at this stage, no effect has been identified on investment, neither after 2013 (reform of the taxation of dividends), nor after the reform of 2018" having seen the introduction of the single flat-rate levy, notes Cédric Audenis, deputy commissioner general at France Stratégie.

The committee recognizes that household financial investment flows increased sharply in 2020, as did corporate equity financing flows.

But "the observation of the major economic variables - growth, investment, flow of household financial investments, etc. - before and after the reforms is not sufficient to conclude on the real effect of these reforms", indicates the committee in its opinion. .

Increase in dividends

"In particular, it will not be possible to estimate by this only means whether the abolition of the ISF has allowed a reorientation of the savings of the taxpayers concerned towards the financing of companies", he adds. The challenge now is therefore to "know what people do with the earnings of the PFU", that is to say the increase in the dividends paid, indicates Cédric Audenis. "What did these households do with this money? Have they reinvested in companies in the French productive fabric?" He asks, indicating that the committee was going to look into this question.

To date, among the tangible effects of this reform, the report notes the return of dividends paid by companies (around +9 billion euros) to the level that was theirs before the 2013 reform and their inclusion in the calculation of income tax.

These payments had plunged between 2013 and 2017. The report also confirms that the departures abroad of wealthy taxpayers have decreased and that returns have increased, even if it concerns "small numbers", a few hundred households, out of 130,000 subject to the IFI.