Voting for the “flat tax” on income from capital: The opposition denounces a “gift tax to the most wealthy”

The national Assembly. — SIPA

Meps approved on Wednesday evening in the committee one of the most controversial measures in the budget 2018, the introduction of a “flat tax” of 30 % on capital income, at the end of the debate between the majority and the left as well as a part of the right.

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This levy one-time lump sum (PFU) of 30 % (up 12.8% tax on income and 17.2 % of social taxes) will be introduced on income from movable property, with the exception of the Livret A, the PEA (share savings). This measure will cost about 1.3 billion euros to public finances in 2018 and $ 1.9 billion in 2019, according to Bercy.

“A gift tax to the most wealthy”

The majority, in the image of Laurent St-Martin (LREM) has defended this reform as “the pledge of a better readability and a better attractiveness for investment, domestic and international” by bringing it closer to the level prevailing in the other european countries. The ” bet ” depending on the Modem, Jean-Noël Barrot is that the French are the champions of savings secure, and to orient it more towards enterprises “, which lack the equity to finance innovation “, according to Stanislas Guérini (LREM).

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Socialists, communists, and dissenters denounced it as a ” gift tax to the most wealthy “. “When an employee at 1.2 times the MINIMUM wage monthly that gets an increase in pay on it at a rate of 14 %, a billionaire who earns ten million euros by a financial transaction does not fulfill 12.8% tax on this new gain,” said Valérie Rabault (New Left). “What’s it for ? These productive investments will not see the light of day ! “hammered Eric Coquerel (BIA).

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.@Valerie_Rabault recalls : 1st rate IR is 14%. With the flat-tax, for “somebody with 10 Mio€ financial income” it will be up by 12.8%…

— Lilian Alemagna (@lilianalemagna) October 11, 2017

#ComFi meps @socialistesAN @FranceInsoumise and @deputesPCF call for the abolition of the Flat Tax @ericcoquerel speaks of the “Gift tax” for the richest #DirectAN

— Marion Chatelin (@MChatelin) October 11, 2017

The Modem Jean-Louis Bourlanges has called the left “out of the analogy” between savings and work. “The savings, it is the deferred work that has already been taxed the first time,” said Charles de Courson (IDU). Several deputies LR as Patrick Hetzel felt that ” the government made a fundamental error in thinking that he can change the behaviour of investors in French who have an aversion to the risk “.

Capping the capital gains tax professional

A pass of arms has opposite Valérie Rabault and Amélie de Montchalin (LREM) when it was called “toxic products” the new Plan of home savings, ” which blocks the savings of the French, to 1 % for ten years while we all know that the rates are going to go up “. “This is very serious to speak of a toxic product, the ELP has always guaranteed the safety of the savings of the French,” replied Valérie Rabault.

The present tax system will also remain unchanged for the holders of life insurance contracts whose assets are lower than € 150,000 if they retain more than eight years (current tax at 23 %).

On the other hand, the deputies have adopted an amendment of the rapporteur Joël Giraud (LREM) for the PFU applicable, for contracts of less than eight years, regardless of the amount of the outstanding contract. Thus the rate of the PFU will be globally substituted for the current rates of 50.5 % (less than four years) and 30.5 % (between four and eight years). They also adopted an amendment to the majority to ensure that the capital-gains tax professional craftsmen, traders and farmers does not exceed 30 %.

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The beginning of the debate on the reform of the ISF

The deputies have finally passed an amendment LREM to facilitate the transfer of business by changing the fixed deduction of € 500,000 to benefit SME managers, assigning their rights in their society. The amendment removes the condition of retirement of the officer by providing simply that this allowance can only be used once.

Reform of wealth tax: How the majority LREM has tried to cut corners in three acts

Before interrupting their discussions to 1am in the morning, they began the heated debate on the reform of the solidarity tax on wealth (ISF) reduced to a tax on the only real estate asset (IFIS) that they will continue Thursday morning.

They just had the time to adopt an amendment LREM aimed to increase the rate of the flat-rate duty on precious objects of 10% to 11% in order to ” avoid that this reform would result in an unwarranted reduction in the tax on precious metals “.