Will Emmanuel Macron change his mind on “superprofits”? While INSEE is due to announce, on Tuesday March 26, the final figure for the public deficit for 2023 – which will be, according to the government, “significantly” above the 4.9% of GDP initially planned – the question of taxation “superprofits” has just made a thunderous return to the debate.
Superprofits materialize in particular through the payment of dividends to shareholders of large groups. According to asset manager Janus Henderson, 63.2 billion euros were paid by the 40 largest French companies to their shareholders in 2023, a record amount, compared to the 59.8 billion paid in 2022.
Until now hermetic to this idea coming from the left and already taken up by the MoDem in the fall of 2023, the Renaissance party seems to be evolving on the subject. The President of the National Assembly, Yaël Braun-Pivet, threw a wrench into the mix on Friday March 22, stating in Le Figaro that we had to "question our revenues, including the possibility of taxing superprofits in large companies or share buybacks.
Tax increase: “There should be no taboo”, according to Yaël Braun-Pivet (@YaelBRAUNPIVET) pic.twitter.com/1AiyFT5l4s
— BFMTV (@BFMTV) March 25, 2024
This is a change in weight within the majority, since even if nearly twenty Renaissance deputies had voted on October 12 for the MoDem amendment on superprofits, ultimately rejected thanks to the 49-3, those -they seemed very lonely within the presidential party.
“Everyone’s positions evolve because the context evolves,” explains Renaissance MP Stella Dupont, who was one of the voters in the fall. “The imbalance in public accounts is greater than expected. Many of us consider that a rebalancing must be done, but not only by looking at the savings side.”
The government has been preparing public opinion for several weeks for austerity that will not reveal its name. Already 10 billion euros in budget cuts were announced at the end of February for the 2024 budget, and 20 billion additional savings are planned for 2025.
Bruno Le Maire prefers budget cuts to tax increases
For his part, the boss of MoDem, François Bayrou, judges that it is time to ask the wealthiest to contribute more to the effort. “If there are rebalancing measures, they must go towards those who have the most means, including the most means depending on the crisis, without damaging the image of France which allows attract investors", he said on Monday March 25 on RTL.
During this interview, he suggested that he was opposed to a new reform of unemployment insurance aimed at reducing the duration of compensation, as envisaged by the government.
“I do not believe that the main culprits of unemployment are the unemployed, especially since a certain number of them have lost work skills over time. We therefore need to reform them,” he judged.
Also readTaxing the rich, a solution in times of crisis?
Questioned at the end of the European summit in Brussels, Friday March 22, President Emmanuel Macron refused to answer a question relating to the taxation of superprofits, limiting himself to saying that the government would have to "complete" the budgetary effort in the face of to the “deterioration of public finances”.
Since 2017, Emmanuel Macron has opposed tax increases. An exceptional contribution was certainly requested from the oil sector and electricity producers due to the surge in energy prices following the Russian offensive in Ukraine – a mechanism which must be extended in 2025. But the Court of accounts pointed out in mid-March the low yield of this tax, not judging it “not fair” for the consumer.
In a note published in September 2022, the NGO Oxfam estimated that ambitious taxation on superprofits could bring in between 10 and 20 billion euros to public finances.
Also read: Financing the ecological transition, a thorny subject for the government
Anxious to send the right signals to Brussels and the rating agencies, but also determined to make it one of its markers in view of the 2027 presidential election, the Minister of the Economy Bruno Le Maire is trying to to take on the role of guarantor of French budgetary seriousness, insisting for weeks on the need to cut public spending.
However, he declared on Monday morning that he was “open to discussions”. “It’s normal that in a majority, there can be debates,” he conceded on BFM TV. "Then I give you my conviction [...]: for me, the real solution is more a reduction in public spending, since that is where we have the highest level, rather than continuing to increase taxes ", he added.
The French tax system deemed “unfair” by 75% of French people
“There have been two lines that have been clashing in the majority for a long time. We have been joined by a few personalities, the debate will take place, Stella Dupont wants to believe. Especially since relying solely on savings to reduce the deficit seems difficult "Our sensitivity is that we study all avenues without dogmatism. Furthermore, there is also a question of tax justice that arises. The French people I meet in the constituency talk to me about it very regularly. "
According to a Viavoice survey published on March 24 in Libération, 75% of French people consider the tax system "unfair", or even "very unfair" for 33% of those questioned. This same survey reveals that temporary taxation on the super profits of certain companies is considered "priority" by 65% of French people, while a new wealth tax is favored by 52% of respondents.
🔴 EXCLUSIVE SURVEY. Respondents consider the French tax system unfair, and are in favor of increased taxation of the most prosperous individuals and businesses.
More info: https://t.co/BMEfnaa4dl pic.twitter.com/1GnJUogUkN
— Libération (@libe) March 24, 2024
A study by the Institute of Public Policy (IPP) published in June 2023 demonstrated that this tax injustice is very real. If the taxes of the overwhelming majority of French taxpayers are proportional to their income, the study noted "a strong regressivity of the overall tax rate" once the threshold of the 0.1% of the richest French people is crossed.
The 37,800 wealthiest French households, who receive more than 627,000 euros annually, have an overall tax rate of 46%. But this rate decreases as the income of these ultra-rich increases, falling to 26% for the 75 wealthiest tax households.
Bruno Le Maire said Monday morning that he was "ready to put in place a minimum tax at international level on the highest incomes", "to prevent some of the wealthiest in Europe from being able to escape their fair share of tax". An idea that he had already developed at the end of February on the sidelines of a G20 of Finance Ministers in Brazil and whose process, given the difficulties in getting everyone to agree on such a divisive subject, has little chances of succeeding quickly. or even to succeed at all.
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