While the review of the supplementary budget to the National Assembly begins, a question emerges: the supplementary budget will be under discussion does a real opportunity to shift tax or, alternatively, the temporary nature measures targeting large estates prevail there?

The supplementary budget for 2012 is debatable. End of exemption from overtime, outstanding contributions on capital, repeal of the social VAT. The stories are there, and especially since the measures are already taking shape for the next Finance Act 2013, an increase of the general social contribution (CSG) which, it seems, is seriously considered. After ten years during which the progressive reduction of direct taxes (income and wealth), the rising number and cost of tax loopholes and increases in indirect taxes have been key pillars of fiscal policy, these new measures deserve a special look.


New measures of the proposed supplementary budget for 2012 represents a comprehensive collection of 7.18 billion euros. Of this total, nearly $ 3 billion relates businesses: taxation of the banking sector, outstanding contribution of the banking sector and the oil and anticipation of payment of the exceptional increase of 5% of corporate tax for companies over 250 million turnover. The work of the National Assembly and the Council compulsory levies have shown, large firms bear a tax rate well below that of small and medium enterprises. From this perspective, the supplementary budget is to partially compensate for this difference, as it will apply mainly to large enterprises. But the measures are, however, that outstanding contributions (on the banking and oil) or effects of cash (advance payment of the tax increase on companies). It remains to conduct a structural rebalancing and sustainable corporate tax for that real change occurs.

The taxation of overtime is being debated

As for individuals, wealthy taxpayers bear the 2.32 billion euros of the outstanding contribution on capital and almost all of the 140 million enhancement of the gift tax and inheritance. The debate about “tax justice” however, is more keen on ending the exemption of overtime: these are, indeed, from all walks of employees who benefit, for a median gain of 350 euros annually (and a gain annual average of 500 euros, the average is pulled up by the highest earners). Several opposing views on the subject. For some, this exemption constitutes a real incentive to “win over”, but for other windfall and perverse (dummy for overtime in lieu of real pay increases, incentives to work overtime at the expense hires) are particularly harmful. This is what was emphasized in the report of the National Assembly 30 June 2011 which denounced an expensive device (4.5 billion euros in lost revenue for public finances) and “ineffective”.

The test ISF

Basically, the question is whether this supplementary budget announced a shift in tax elections or if the temporary nature of “outstanding contributions, which actually concern of economic well-off, will prevail. In this area, announced the return of ISF will be an interesting test. Before 2011 relief, the ISF was not perfect: his tax loopholes accounted for half of its performance and allow them to truly wealthy taxpayers to reduce their ISF or not to pay. What the parties responsible for the affluent but not wealthy ISF (taxed in the first two tranches of the ISF, or between 800,000 and 2.53 million) could not always do. Within this FSI also , inequalities were so real.

A simple return of ISF would not be bad news for the state budget (this would create more than 2 billion euros in additional revenue), but would not reduce to as the structural fiscal imbalances. To do this, a real tax shift would, for example, to establish a progressive tax on wealth to broad base. It’s the same for other taxes and tax administration, which has lost over 16% of its workforce in ten years, while the workload increased over 35%. This is the yardstick of all tax elections that will decide the magnitude of change tax and its “fair”.