A city with more public transport, more police, a brand new gymnasium, more crèche places. And all this by lowering taxes. This is what can sometimes be read in the projects of candidates for municipal elections. It must be said that these promises are not without attractions. But can they only be held? Does the mayor have the power to lower local taxes and, above all, can we see a difference in his bank account? The Brief of Europe 1 conducted its little investigation and ... nothing is less certain.
In reality, three taxes fall within the competence of the mayor: the housing tax, the property tax (reserved for owners) and economic taxes on businesses, which therefore do not concern individuals. A problem therefore arises immediately: the first, this housing tax which weighed for "a third of the fiscal resources of the communes", as the economist Mathieu Plane of the OFCE recalls, has already been abolished for 80% of the French. It will be fully, for all, in 2023.
The abolition of the housing tax has started the fiscal autonomy of mayors
This poses two problems. On the one hand, the mayors no longer have control over this housing tax, offset by an endowment from the State. They can no longer play on this lever, and therefore certainly cannot promise to lower it. On the other hand, despite the state compensation, they say their income has dropped with the abolition of the tax.
"Even if we are told that there is compensation for the abolition of the housing tax, this compensation is frozen. It is based on the year 2017. So it does not take account of natural developments in a city. There are always increasing needs ", explains Christophe Bouillon, MP and former mayor of Canteleu, in Normandy. The one who is now president of the Association of Small Towns in France continues: "There is a little inflation, prices are going up, etc. In the same way, wages are going up. Real life is that everything is increasing all the time. And opposite, it is becoming more and more difficult for a mayor to use this fiscal lever. "
In other words, not only mayors are technically out of hand, but in practice, with lower income, a tax cut is less likely. Unless you make dry cuts. "There are two ways of doing it," explains Christophe Bouillon. "Cut back on spending, so on a certain number of services to the public. Or free up less to invest."
Lowering property taxes is not for everyone
However, another lever remains: that of property tax. This is the one that Emmanuel Darcissac intends to activate, for example in Alençon. The outgoing mayor, who is standing for election, supported by La République en Marche, campaigned by promising a 6% drop over six years. "We have a good financial health of the city, a low debt, which effectively allows us to lower property taxes," he told Europe 1.
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Emmanuel Darcissac is not afraid of short-term management problems in the city. Put it on a virtuous effect in the longer term. "The idea is to create a shock of confidence at the level of the inhabitants. The objective is to bring in more inhabitants, more businesses so that we have more resources and to bring down for each with their own contribution with more contributors. "
The fact remains that this reduction in property tax can, de facto, only apply to owners. Tenants will never see the effects of this measure.
Tax cuts that remain minimal
Especially since it is impossible to drastically lower a tax like this. Because of what's called rate binding. "You have the taxes that weigh on businesses and the taxes that weigh on residents. And you still have to make sure that there is not too much of a gap between the two," explains Christophe Bouillon, the president of the Association of Small Towns of France. Clearly, it is impossible to reduce property taxes to nothing without doing the same for businesses.
And even so, this drop would still be minimal anyway. Quite simply because local taxes do not weigh much in the jungle of French taxes. "If we take all of the public administrations, all of social security, today we have more than 1.1 trillion in taxes and social contributions. The municipalities, in that, represent 70 billion. So you have 6% of taxes from the communes and 94% of the action on taxation will be done outside the commune ", explains Mathieu Plane, our OFCE economist. "Even if there was a sharp drop, it would remain on 6% of our total withdrawals. So it's very low."
Take a fictitious case, with a person who pays 1,000 euros in taxes per year. In the event of a 10% drop in local taxes, which is enormous, this represents a gain of only ... 6 euros over the whole year.
Inter-municipal issues
The solution is perhaps to seek at the level of inter-municipalities, these municipalities which are grouped in the same legal structure. Because municipal elections make it possible not only to elect the municipal council, but also the personalities who will sit on the "interco". And these (almost the same as at the municipal council) have other prerogatives, such as taxes on household waste, and sometimes water, transport, or certain infrastructures such as swimming pools or libraries.
At this level too, therefore, a mayor can act to lower taxes. "In 2014, inter-municipal issues were not very present," points out Christophe Bouillon. Six years later, "it becomes important in the minds of the locals."
Even at the intermunicipal level, however, a drop will only have a limited effect. To see a real difference on your bank account, it is better to bet ... on the presidential election.