Surtax on high incomes, employer contributions: the government in difficulty in the Assembly

"Victory!", rejoiced the leader of the LFI deputies Mathilde Panot shortly after midnight on X. "No 49.3 must go back on this achievement!", called the First Secretary of the PS Olivier Faure.

A few minutes earlier, a large majority of MPs adopted the article providing for the surtax on high incomes proposed by the government, expected to bring in two billion euros in 2025.

But where the executive wants an "exceptional" contribution for three years, the Assembly voted to make it permanent, at the initiative of the left and the MoDem, a member of the government coalition.

"You are asking everyone to make an effort (...) and the only ones to whom you say 'don't worry, it's exceptional!' are those who have more than enough to live on," asserted Eric Coquerel, chairman of the Finance Committee (LFI).

Taxpayers must "know (...) that there will be an end" to such measures, in order to have "visibility", retorted Budget Minister Laurent Saint-Martin.

Although 62.500 households were theoretically covered by this measure, a preliminary study published by the Ministry of the Budget estimated that 24.300 households would actually be liable.

The general budget rapporteur, centrist Charles de Courson (Liot), responded by having an amendment adopted aimed at limiting the possibility for very wealthy taxpayers to use tax advantages or tax credits to reduce the bill.

While the overwhelming majority of NFP and RN deputies voted for the amended text, the presidential coalition groups were divided between for, against and abstentions.

The government's text "has been unbalanced by a form of ideology of permanent fiscal revenge", deplored Macronist Mathieu Lefèvre (EPR), hoping that the executive will not retain this perpetuated version in the event of recourse to 49.3 to pass the text without a vote.

"I think that Mr. Barnier has already planned to trigger Article 49.3, and that he is making fun of the world," commented Jean-Philippe Tanguy (RN), regretting that the government "is not negotiating anything" and "has not supported any amendment from anywhere in the opposition."

The dues of discord

A few hours earlier, it was the Social Security budget project that suffered a setback, this time in committee.

The deputies of the EPR and Droite républicaine (ex-LR) groups led the charge and, like the RN, had amendments adopted removing a flagship article, expected to bring in between four and five billion euros according to sources.

A symbolic defeat at this stage, however, because the deputies will return to the hemicycle with the government's initial text.

The executive plans to limit and distribute differently the reductions in employer contributions, currently heavily concentrated at the minimum wage level, in the hope of obtaining revenue and encouraging salary increases.

With a new cocktail of contribution reductions that would also stop at three times the minimum wage, compared to 3,5 times the minimum wage today. But the announced measure bristles the employers as well as certain deputies who see it as an increase in the cost of labor and a "threat" to employment.

The left-wing groups voted in vain against the deletion amendments, supporting the reductions in exemptions.

The LFI group, however, has had an amendment adopted providing for a compensation system for the social security funds if they are penalized by reductions or exemptions from contributions. Compensation which would be done either via the State budget, or by reducing or eliminating other exemptions elsewhere.

The socialist Jérôme Guedj, for his part, had an amendment voted through to encourage all professional branches to raise their minimum wages to the level of the minimum wage, by recasting the calculation of their reductions.