Macron’s Party Faces Turbulence Over Potential Tax Increases, Uniting and Dividing Members

2024-09-17 19:30:00

Emmanuel Macron had made it one of his trademarks, demanding 50 billion euros in tax cuts since 2017 for businesses (corporate tax, for example, was reduced from 33.3% to 25%) or households (elimination of the housing tax, transformation of the wealth tax or single flat-rate deduction on capital income).

But this quasi-dogma is about to be called into question by the public deficit which could widen to 5.6% of GDP this year, or even 6.2% in 2025, leaving the new Prime Minister facing a delicate budgetary equation.

He had already hinted at a change of direction during his first television interview on September 6, the day after his nomination. “The French want and need fiscal justice,” he said.

If the hypothesis, at the embryonic stage, is not new, it found a second life on Tuesday by stirring up the meeting of Macronist deputies, where Gérald Darmanin lit the fuse, according to Le Parisien.

According to the resigning Interior Minister, Mr Barnier has raised the possibility of a tax increase on several occasions – including in front of him – without specifying his intentions.

A version corroborated by another recent interlocutor of the Prime Minister within the presidential camp, who confirms having heard Mr. Barnier mention tax increases “on high incomes”. Enough to prompt the leader of the group of Macronist deputies to request a meeting with Mr. Barnier which should be held on Wednesday morning, in order to obtain clarifications.

“Hearsay,” retorts the Prime Minister’s entourage, referring to the exact words of his interview. “The rumours about taxation are pure speculation. The Prime Minister is analysing the budgetary situation and no option has been decided today,” insists the same source.

Because Mr Barnier, who has still not formed a government and has only a precarious coalition behind him in the Assembly, is moving on a knife-edge, among sometimes fluctuating red lines.

“We want fiscal stability and not to call into question what has helped reduce unemployment and increase the attractiveness of our country. Going back on that would be a terrible mistake,” summarizes Macronist MP Jean-René Cazeneuve, while saying he is “open” to “very targeted” and “one-off” increases, such as the one targeting motorways.

Shared LRs

The presidential camp itself had been divided on several occasions over the taxation of superprofits, pushed in particular by the MoDem. And the theme of “tax justice” could find an echo among some elected officials of this bloc.

On the other hand, the possibility of touching corporate tax, raised in particular by L’Opinion, should meet with firm opposition in a former majority with a pro-business bias.

Within the Republicans, from which Mr Barnier comes, the course is in theory very firm. “Our conviction is that in a certain number of areas, we need a right-wing policy”, which does not include “tax increases”, thus reaffirmed last week the leader of the LR deputies Laurent Wauquiez.

But this intransigence would be above all directed against changes to “income tax and corporate tax”, deciphers an LR deputy. For him, the Prime Minister is aiming above all at taxing “super profits” and the “very rich”. And “on that, on the LR side, there is zero problem”, he wants to believe.

The National Rally, which is blowing hot and cold, set out the conditions of its support through the voice of MP Jean-Philippe Tanguy on BFMTV: “If it is a measure of fiscal justice, that is to say that we tax the most privileged and the excess profits of certain multinationals more in exchange for a reduction in the tax burden which is very high on the middle classes and the working classes (…), then Mr Barnier will have our support.”

Could the Prime Minister find support on the left? “It will depend on the details: how many and especially for whom,” PS MP Christine Pirès Beaune evaded.

“It whets the appetite,” summed up communist leader Fabien Roussel on Tuesday, leaving a meeting with Mr. Barnier.

As for the governor of the Bank of France, he suggested on Tuesday “an exceptional and reasonable” fiscal effort on certain large companies and large taxpayers. “As long as we have not returned to below 3%” of public deficit, advocated François Villeroy de Galhau in an interview with Le Parisien.

sac-but-arz-jmt/jaz/er/or

1726626371
#hypothesis #tax #increase #Macrons #party #shudder #divides

What are the ⁣implications of Macron’s potential tax increases​ on the French economy?

France’s Fiscal Conundrum: Macron’s Tax Cuts Under Threat Amid‍ Soaring Deficit

As‌ France grapples with a widening public deficit, the country’s long-standing commitment to tax cuts may ⁣be due for an ⁣overhaul. Emmanuel Macron, once​ a champion of reducing taxes for businesses and households, may need to reassess his stance in the face of a projected 5.6% deficit of ⁣GDP this year and 6.2% in 2025.

A Shift‌ in Direction

During his first television interview as Prime Minister, ‌Macron hinted at a change in direction,⁤ emphasizing the need for ⁣”fiscal ⁢justice.” This subtle shift has ‍sparked debate among lawmakers, with some calling for targeted increases on high-income earners and corporations.

Tax ⁤Increases​ on the Horizon?

Interior Minister Gérald Darmanin has ​fueled speculation, suggesting that Prime Minister Barnier has raised the possibility of tax increases on multiple occasions. While ​the Prime⁣ Minister’s⁢ entourage has⁣ denied any concrete plans, Macronist deputies are seeking ​clarity on the⁤ matter.

Fiscal Stability vs. Tax Justice

The ​debate has exposed divisions within the presidential camp,⁣ with some advocating for fiscal stability and others pushing for ⁣tax justice. Macronist MP Jean-René Cazeneuve, while opposing a wholesale reversal of tax cuts, is open to​ targeted, one-off increases. The MoDem, meanwhile, has long‌ advocated for‍ the taxation of superprofits.

Right-Wing Resistance

The‍ Republicans,⁤ from which Prime Minister Barnier hails, are firmly‍ opposed to tax increases, viewing‍ them ⁢as a threat to France’s business-friendly environment. However, some LR deputies are‍ open to taxing “superprofits” and the “very rich,” which may provide a window of opportunity‌ for the Prime ‍Minister.

National Rally’s Conditions

The National ⁤Rally, which has been critical of Macron’s economic policies, has set out ‌conditions for its support: any tax increases must be part ⁢of a broader fiscal justice package that reduces the tax⁢ burden on middle and⁤ working-class citizens.

Left-Wing Support Uncertain

The Socialist Party is cautious, awaiting details​ on any⁤ proposed tax increases before committing to support. PS MP Christine Pirès Beaune⁣ has stressed that the devil⁤ is in the details, hinting that the party‌ may be open to ⁢targeted increases on high-income earners and corporations.

Budgetary Equation

As Prime Minister Barnier navigates​ the delicate budgetary equation, he must balance the need for fiscal responsibility with the demand for social justice. The⁢ road ahead will be fraught ‌with challenges, but a nuanced approach to taxation may hold the key toUnlocking a more equitable and sustainable​ economic future for France.

Keywords: Emmanuel ‍Macron, tax cuts, public deficit, fiscal‍ justice, France, Prime Minister Barnier, tax ⁢increases, fiscal stability, taxation, superprofits, corporate tax, income tax, National Rally, Socialist Party, Republicans, MoDem.

– How will Macron’s proposed tax increases impact the French economy and public deficit?

Macron’s Tax Cuts Under Fire: Will France See a Shift in Fiscal Policy?

Emmanuel Macron, the French President, has long been synonymous with tax cuts, having demanded 50 billion euros in reductions since 2017 for businesses and households. However, with the public deficit expected to widen to 5.6% of GDP this year and 6.2% in 2025, the new Prime Minister, Michel Barnier, is facing a delicate budgetary equation that may lead to a reevaluation of Macron’s trademark policy.

A Shift in Fiscal Policy?

In a recent television interview, Barnier hinted at a change in direction, stating that “the French want and need fiscal justice.” This sparked speculation about potential tax increases, which were further fueled by a meeting of Macronist deputies, where Gérald Darmanin, the former Interior Minister, revealed that Barnier had raised the possibility of tax increases on several occasions, including targeting high-income earners.

Implications for the French Economy

The implications of Macron’s potential tax increases on the French economy are significant. On one hand, reducing the public deficit could boost investor confidence and stabilize the economy. On the other hand, increasing taxes could stifle economic growth and reduce France’s attractiveness to businesses and investors.

The French economy has been experiencing a period of low growth, and tax increases could exacerbate this trend. Businesses may choose to invest elsewhere, and high-income earners may opt to relocate to countries with more favorable tax environments. Additionally, tax increases could lead to higher unemployment rates, as companies may be forced to reduce their workforce to offset the increased tax burden.

Divisions within the Presidential Camp

The presidential camp is divided on the taxation of superprofits, with some, like the MoDem, pushing for higher taxes on large corporations. The theme of “tax justice” may find an echo among some elected officials of this bloc. However, the possibility of touching corporate tax is likely to face firm opposition from the former majority, which has a pro-business bias.

The Republican Stance

The Republicans, from which Barnier hails, are traditionally opposed to tax increases. However, some deputies have indicated that they may be open to taxing “super profits” and the “very rich,” rather than increasing income tax and corporate tax.

Conclusion

As the French government navigates the complex budgetary landscape, the future of Macron’s tax cuts remains uncertain. While the possibility of tax increases may be unpopular among some, it may be necessary to address the public deficit and ensure the long-term stability of the French economy. As the debate unfolds, one thing is clear: the French people are watching closely, and the consequences of any decision will be far-reaching.

Keywords: Emmanuel Macron, tax cuts, fiscal policy, public deficit, French economy, Michel Barnier, tax increases, fiscal justice, superprofits, corporate tax, Republicans, LR deputies.