towards an inevitable increase in taxes?

While France shines in the eyes of the world thanks to the Games, it continues to be dragged along economically. Placed in proceedings for excessive public deficit by the European Commission and singled out by the latest report of the Court of Auditors for its poor financial management, the French State is being encouraged from all sides to review its copy. Under these conditions, it is difficult for Gabriel Attal’s successor at Matignon to turn a blind eye to the debt. “Reducing our debt is a burning obligation. It is neither left nor right: it is in the general interest”, hammered home last July the first president of the Court of Auditors, Pierre Moscovici. To achieve this, the stability programme adopted this year by Bercy is partly counting on an increase in revenues. It provides for “21 billion euros of additional compulsory levies” for the period 2025-2026, without detailing their nature. “The advantage of a tax increase in one fell swoop is that we have better control over its impact on growth and on low-income households,” agrees economist Xavier Ragot, a member of the Economic Analysis Council, a think tank that advises the Prime Minister. “Faced with an exceptional crisis, we can opt for a temporary tax system to restore public accounts.” The next head of government could therefore be tempted by a tax increase in order to get back in line with the Maastricht Treaty, which requires a public debt of less than 60% of GDP – while France has exceeded 110%. A hypothesis that the right and the left do not want to hear about.

Targeted increase

In Xavier Ragot’s eyes, increasing taxes would appear more socially acceptable than new budget cuts, provided that it is spread out over time to maintain growth. The new executive would thus have to choose between making businesses, high-income households or the entire population bear the burden. In England, where the issue of good budget management has transcended traditional political divisions, the new Labour government has announced slight tax increases targeting the superprofits of energy companies. The former Minister of the Economy, Bruno Le Maire, has repeatedly ruled out this tax. What will his successor say about it?