Will tax hikes return in 2023?

Will he (still) have to put his hand in his pocket? It is clear, in any case, that prices are rising almost continuously. Due to inflation, the French have had to learn to tighten their belts – sometimes more than considerably. Aware of this reality, the executive has been working on the creation and maintenance of purchasing power protection devices for many months now. Some, like the tariff shield which aims to protect taxpayers from rising energy prices, pre-date this government or even the re-election of Emmanuel Macron. All while applying to respect a mantra hammered home by the government team: no tax increase.

Some recent information, published by the benchmark economic daily, nevertheless tends to qualify the statements of certain leading figures in the government, such as those of the Minister of Economy, Finance and Industrial and Digital Sovereignty. It would indeed be a question, according to our colleagues, of reviewing the method of calculating the taxes applied to the sale of tobacco. Therefore, we must unfortunately expect an increase in purchase prices from autumn 2022. The executive plans to base its calculation method on the year N-1 rather than the year N-2, during which inflation was lower.

“The increase in tobacco prices meets two objectives”, sums up from the outset the economist Philippe Crevel, who also heads the Circle of Savings. “It is first of all a public health objective but also, let’s not forget, to fill the coffers of the State. It is moreover he who sets the amount of the increase”, continues the specialist, not without recalling that one can indeed speak of a tax increase. An indirect increase, certainly, but an increase nonetheless.

This is far from the only burden that the French and the French will have to assume next year. Don’t forget the property tax…

In 2023, the property tax should increase quite strongly, as Planet recently explained. Two different factors are to be called into question, but one of them is not unrelated to the action of the government: that would plan a priori not to cap the revaluation of the cadastral values, used in the calculation of the rate tax as set by law. Therefore, it would be possible to considerably inflate the amount applied. “The property tax, which is a direct tax, increases in line with inflation. We will have to wait for the vote on the budget, which will take place in a few weeks, to be sure”, recalls for his part Philippe Crevel, not without emphasizing that ‘in the absence of an increase decided by the legislator, local elected officials will take care of it.

In such a context, marked by heavy public spending, should we expect new tax cuts, as promised, or will the Head of State be forced and forced to forget his mantra? ?

“Since his first election, Emmanuel Macron has multiplied the abolitions or announcements of tax abolition. We can think of the housing tax, the solidarity tax on wealth, but also the CVAE on companies or to the television license fee. In addition, the tax scales have been reviewed so that the taxpayer pays less. There is therefore a real effort that has been made”, judges Philippe Crevel bluntly.

That being said, France is currently facing a complex situation and the State has incurred numerous large-scale expenditures to protect French people from inflation. Therefore, believes the economist, it is necessary to distinguish between the two types of possible increases likely to occur. “On the one hand, there may be tax increases aimed at keeping up with inflation: the municipalities must finance their energy expenditure and could be tempted to increase the property tax for this. On the other hand, there is no should not be a real increase in the immediate future, according to the government since it has decided to raise the scale and index it to inflation which, with an equivalent or higher income, should allow a gain for the taxpayer”, indeed analyzes the expert.

This does not mean that by the end of the five-year term, all French people will be protected from any tax increase. “There will come a time when it will be necessary to make a choice between more tax or less public spending. It is difficult to say what will be the final arbitration of the government”, he recalls indeed.