2023-06-23 04:15:14
Barthélémy Philippe // photo credit: Riccardo Milani / Hans Lucas / Hans Lucas via AFP 6:15 a.m., June 23, 2023
The year 2022 broke a record in terms of taxation, to the point that state revenues reached 451 billion euros, according to the annual report of the General Directorate of Public Finances. So how can this considerable growth be explained when inflation has had a major impact on the country?
France has reached a fiscal record for the year 2022 with 451 billion euros in revenue, as informed by the annual report of the General Directorate of Public Finance. The state has managed to increase its revenue by 12% over one year, which exceeds, for example, the military budget of France over the entire period 2024-2030.
So how can such growth be explained? It is with the first tax in France, VAT, that 171 billion euros have been collected, which is equivalent to 20 billion euros more than last year. Then comes income tax, which brought in 110 billion euros, once morest 100 billion a year earlier.
Inflation and income distribution
For Mathieu Plane, economist at the French Observatory of Economic Situations (OFCE), this trend is linked to a strong inflationary context. “Inflation may have played a role, having a positive impact on tax receipts. But it is above all linked, potentially, to the distribution of income. If the incomes of the upper brackets have increased faster than the others, then you may have had significant tax revenues”, he analyzes. “However, in fact, there have been incomes which have increased, there have been salary increases which have been quite significant.”
However, the other side of the coin is that the level of compulsory levies explodes to 45% of gross domestic product, which has rarely been seen before. Result of the races, the 50 billion tax cuts of the first five-year Macron go almost unnoticed. According to a recent survey, nearly one in two French people (42%) believe that they have increased since 2017. Against 28% who think the opposite.
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