2023-09-21 16:27:00
Share buybacks are once once more in the executive’s sights. This week, the Minister of Public Accounts, Thomas Cazenave returned to the charge on this burning issue. “All the political groups questioned me on the issue of share buybacks, that is to say when a company uses its profits to buy back its shares: this can be a common practice, but also sometimes a way of remove profits that might have been redistributed to employees”said the minister on Sud Radio the day following the Bercy Dialogues.
Already in the spring, Emmanuel Macron had already castigated this widespread practice in large American firms, also champions of dizzying dividend payments. “There is still a bit of cynicism at work, when we have large companies which make such exceptional income that they end up using this money to buy back their own shares” declared the Head of State at the time of heated protests over pension reform.
The tenant of the Elysée had not named any companies specifically. On the other hand, he asked the government to work on an exceptional contribution so that employees might “take advantage of this money”. “Large companies must distribute more to employees”, he explained. As a reminder, French companies in the flagship CAC 40 index have distributed a mountain of dividends in 2022 of the order of 80 billion euros according to the specialist letter Vernimmen. At the same time, share buybacks reached record highs of €23 billion compared to €11 billion in 2019. “2022 was a record year for share buybacks,” recalls socialist deputy Philippe Brun, member of Nupes. It is not a lever aimed at increasing production. It’s above all a stock market maneuver”he adds.
Bercy open to an amendment
HAS a few days before the presentation of the budget scheduled for September 27, there remain many gray areas on the mechanism to adopt, the methods of implementation, the companies concerned and the criteria adopted. “I announced that we were ready to work with all the political forces that requested it so that, in the parliamentary debate, by amendment, we might move forward on this subject”declared Thomas Cazenave.
In the majority, several deputies had proposed in the fall of 2022 a temporary increase of 5 points in the single flat-rate levy (PFU) going from 30 to 35% “on income distributions by these large companies higher than 20% of the average income distributed between 2017 and 2021”. Initially adopted, this MoDem amendment was ultimately rejected in the final version of the budget adopted 49-3 last year.
A scenario that might happen once more this year in the absence of an absolute majority for the government. Despite this refusal, the deputy and boss of the MoDem elected officials at the Palais Bourbon Jean-Paul Mattei should return to the charge next week with a report devoted to heritage taxation co-written with the deputy Nicolas Sansu (PCF).
The Mayor more favorable to value sharing schemes
HAS Bercy, the teams of Bruno Le Maire and Thomas Cazenave are currently working on different options. Asked by The Tribune, the entourage of the Minister of Public Accounts remained evasive on this thorny issue. In the spring, the Minister of the Economy clarified his position to the Senate. It is ” find the good balance between the competitiveness of businesses and the need to better share valuetheur »the government’s idea would be to force thes companies that have thes ways to redeem theour own actions on thes markets to benefit more theour employees of theour financial largesse. ” We want thes oblige to distribute more profit-sharing, more participation, more tax-exempt bonuses when itthes are repurchasing shares »he added.
Social justice and…the deficit
Regarding the opposition, parliamentarians are finalizing their amendments. “The principle of our 2022 amendment was inspired by the mechanism put in place by Joe Biden in the United States”, explains MP Philippe Brun, member of the Finance Commission at the Palais Bourbon. Across the Atlantic, the Democratic administration had passed a 1% tax on company share buybacks of more than 1 billion euros in 2022.
For his part, the Norman elected official intends to put this option back at the heart of the debate. “We are asking a lot of effort from the French with the end of tariff shields and the rise in fuel prices. There is a need for justice and equity”.“The widening of deficits and the loss of tax revenue (VAT)”, would be a legitimate reason to put this lever in place, believes Philippe Brun. But the government is currently caught “trapped on his position of not raising taxes”. Faced with the mountain of investments to be financed to ensure the ecological transition, the executive is on a budgetary peak.
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