Roche & Cie

Focus on the fiscal programs of Emmanuel Macron and Marine Le Pen.

24 Apr 2017

Focus on the main lines of the programs of Emmanuel Macron and Marine Le Pen on taxation, in particular heritage, capital, life insurance and savings.

1 / Emmanuel MACRON

The flagship measure of Emmanuel Macron’s program is a profound reform of the taxation of capital income, such as life insurance, property income, dividends, capital gains and interest.

He proposes the imposition of a flat-rate levy of around 30% of income from property, including income tax and social levies.

As the CSG rate is increased by 1.70 percentage point to finance the abolition of wage, sickness and unemployment insurance contributions, the flat-rate income tax could be close to 13% and the social security levy is 17%.

This 30% flat-rate levy would cover:

  • Land revenues from the rental of unfurnished leased real estate;
  • The capital gains paid in the event of the sale of shares or companies,
  • The dividends ;
  • Bank investment interest;
  • And life insurance.

Land revenues imposed on flat-rate levies of 30%.

Today, property income is taxable after deducting the various property charges including interest at the marginal tax rate (0%, 14%, 30%, 41%, 45%) plus Withholding tax at the rate of 15.50%.

Tomorrow, with such a measure, the maximum tax rate on property income would be 30%, very far from the current 60.5% for the highest incomes.

An increase in the taxation of life insurance after 8 years.

Currently, after 8 years, partial or total redemptions made on a life insurance contract are taxed at the rate of 23% (7.50% + 15.50%).

For new memberships, partial or total redemptions of life insurance contracts would be taxed at the flat rate of 30%. Emmanuel MACRON said that the old life insurance policies would benefit from the current initial plan.

The consequence is simple: life insurance loses its tax advantage in case of life.

With such a measure, life insurance enters rank and the tax argument, in case of life, will no longer be an argument of differentiation. Emmanuel MACRON explains that he wants to shift massively from saving to the productive economy as the transformation of the ISF on real estate rent and the creation of the IFI (Property Tax Immobilière)

Inheritance tax would not be raised.

Housing tax: about 80% of taxpayers with modest incomes would be exempt

2/ Marine Le PEN

Marine Le PEN proposes the raising of the ceiling of the family quotient and the restoration of the half-share for widowers and widows.

It also proposes the tax exemption of the increase of retirement pensions for parents of large families and overtime.

The program clearly states the removal of the levy at source to preserve the privacy of the French and to avoid an additional complication to the existing complexity.

Income Tax – Wealth Tax

Marine PEN wants to apply a 10% reduction in income tax to the first three tax brackets. The target taxpayers are those at 14%, 30% and 41%. Those excluded from this measure will be modest households that are not taxable and wealthier. Marine The NEP also wants to maintain the ISF on behalf of a “fair tax contribution”.

It should be noted that the taxe d’habitation will be included in the income tax in the form of an additional tax.

Heritage taxation

At the same time, the candidate FN wishes to secure the deposits and savings of the French by repealing a European directive on levies or the freezing of bank savings and life insurance contracts in the event of threatened banking crisis.

It also wants to “ensure a fair tax contribution” by refusing any increase in VAT, the CSG and maintaining the ISF. The latter will be integrated into a single progressive property tax, merged with the property tax.

In addition, intergenerational solidarity is promoted with the possibility for each parent to transmit, without taxation, € 100,000 to each child every 5 years. At the same time, the ceiling of donations, without taxation, to grandchildren will be increased to 50,000 € every 5 years.

Other measures

Other important tax measures are also included in its program:

  • Immediate reduction of 5% in regulated gas and electricity tariffs,
  • Halving the rate of wear and tear for bank credits and overdrafts for businesses and households,
  • Reduction of social security contributions for small and medium-sized enterprises by merging the different mechanisms for reducing social security contributions in a degressive manner, while ensuring the maintenance of employment.