Bruno Le Maire, the Minister of the Economy, announced, in an interview with Echoes Thursday, September 1, a revaluation “around 5%” of the income tax scale. What does it mean ? And what can be the consequences? Here are some answers.
What is the income tax schedule? These are the taxpayers’ tax brackets. Let’s take the case of a single person without children (ie a tax “part”). His annual income is sliced. Each is stamped with a rate. Regarding 2021 income, the first tranche (0 to 10,225 €) is not taxed. This person only pays taxes on their net annual income (after deductions), which exceeds €10,225. The second tranche (€10,226 to €26,070) is taxed at 11%. For the third tranche (€26,071 to €74,545), a rate of 30% is applied, etc. Why are we talking about it again? Because the Minister of the Economy announces a revaluation of around 5% of the tax brackets for 2022 income (declared in May 2023). These 5% correspond to the inflation of 2022”, details Bruno Le Maire. The government’s proposal will be submitted to Parliament. Last year, the latter had voted, in respect of 2021 income, an increase of 1.4%. Since then, inflation has exploded. Concretely, what will happen? The terminals of the slices could be raised by around 5%”, deciphers Frédéric Douet, professor at the University of Rouen-Normandy. For a tax portion, the non-taxation threshold (excluding discount) would increase from €10,225 to €10,736. And the third tranche would start at €27,374 instead of €26,071. Who will be the winner? At constant income, an employee should pay less income tax,” continues the tax law specialist. Let’s take the example of our childless bachelor. Let’s imagine that he earns €30,000 per year, in 2022 as in 2021. He pays for his 2021 income around €2,922 in income tax, ”calculates Frédéric Douet. With a 5% increase in the scale, he would only pay €2,618 for 2022. That is a gain of €304. This boost corresponds to the philosophy of income tax. It must be proportional to the contributory faculties. However, the latter are affected by the rise in product prices. What about taxpayers whose incomes are increasing? The goal is that they are not penalized. If the single person, taken as an example, saw his income increase in 2022 by 5% (€31,500 and no longer €30,000), he would suffer a limited tax increase: +€146.
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