Tax hike: Gabriel Attal tries to impose his line, majority remains in turmoil

If the aim was to contain the dreaded fire, it does not seem to have really been achieved. Gabriel Attal tried to restore order to the majority on the question of tax increase on Wednesday evening, but the debate seems far away and the ways – even hidden – of tax measures continue to agitate the presidential camp until the government.

During his appearance on TF1’s 8 pm news, the prime minister tried to reaffirm the Macronist conviction against any tax increase, but with his own words. Less clear than Bruno Le Maire, he explained that “there is no dogma on the subject”, but only “two red lines”: “The first is not to raise taxes on the middle classes who work and who have worked all their lives. (… ) Second, I will not raise taxes for what helps to finance French work,” referring to businesses. On the taxation of the richest, he said that “France is not a tax haven for anyone,” recalling “credible proposals from opponents. Wait to see”.

The modem wants to believe in the opening

The fact that a clear “niet” was not heard went completely unnoticed. This is the case on the left in the opposition, which advocates using fiscal levers to counter slippage in the deficit, which has reached -5.5% of GDP in 2023.

Claude Renal (PS) notes, “Gabriel et al.’s position at least allows for debate.” The chairman of the Senate Finance Committee went to Bursa this Thursday, as did the heads of parliamentary groups – with the exception of Liot and LR – to discuss the future 2025 budget with several government ministers. Discussion is only possible if the government accepts that the issue is the budget impasse, and not just the level of spending. If we talk about expenditure and revenue we will make recommendations,” he explained, warning against a “political crisis”.

Among the majority, supporters of the tax measure would like to believe that the door is not completely closed. “I found Gabriel Atal more open than Bruno Le Maire on this issue, and I heard that he was not closed to targeted measures,” says Jean-Paul Mattei. The leader of the Modem faction in the National Assembly wants a review of capital taxation. “Last year I made amendments in the budget on taxation of super dividend. This is probably not the topic of the moment, but we can look at other issues, such as a single flat-rate levy on capital,” he explains. Modem must make concrete proposals before the end of spring.

Stay the course

However, the government and the majority leaders are putting a stop to this and ensuring that the tax exemption continues. “The course is to resist tax increases,” asserts the heavy weight of the system. This doesn’t stop some supporters of Macronist conservatism from considering measures that appear as diabolical as tax increases. “Reducing tax loopholes is also an increase in taxes but it is not generally perceived as such,” notes the majority member.

The Research Tax Credit (CIR) is once again in the spotlight, which is already causing concern among employers trying to sound the alarm. Bruno Le Maire assured them that the promise of lower production taxes would be kept without fully convincing them. “There is real stress among entrepreneurs,” assures a member of Madef.

A tax on share buybacks, promised by Emmanuel Macron a year ago and then postponed? “It is a file we are looking at,” a ministerial source assured, much to the dismay of certain CAC 40 leaders. The move has also been pushed by Jean-Paul Mattei and Yael Braun-Pivet, president of the National Assembly. Which also talks about taxing the super profits of big groups.

Some members of the majority – including Sylvain Maillard, president of the Renaissance group in the National Assembly – are also pushing for a freeze on the income tax scale. “If this saves the first phase, it will be a measure of justice,” said a parliamentarian.

Concern at Bercy

This abundance of ideas worries Bercy. “Let us be careful not to advocate symbolic measures that call into question seven years of economic policy. 200 million by taxing share buybacks. It is not based on the challenge,” explains a person close to Bruno Le Maire.

They are less willing to take on the opposition. The latest message continues “This is absolutely not the time to make budgetary proposals when there is already a European campaign to run,” a ministerial adviser judges. Jean-Ren Cazeneuve (Renaissance), general rapporteur for budgets in the National Assembly, also warmly welcomed the desire to tighten taxes on electricity producers with a bill before the summer. “We have to be careful in the current context,” the ministry’s adviser said.