French Income Tax Facing Uncertain Future as Budget Negotiations Falter
The year is coming to a close, but uncertainty shrouds the future English
The French government?s proposed budget for 2025 has become entangled in a political quagmire, leaving millions of taxpayers facing potential tax increases due
to a looming freeze on the income tax scale.
AFP / Alain JOCARD.
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Failing to adopt a budget by December 31st, parliament would be forced to approve a “special law” – a measure that could spark a constitutional debate and potentially rewrite the
rules governing income tax.
Millions Could Face Higher Taxes without Budget Adoption
French taxpayers may face millions could face unexpected tax increases.
Finance Minister Laurent Saint-Martin reveals that up to 380,000 additional households
could be drawn into the tax net, with millions more seeing a rise in their tax
bills if the 2025 budget fails to pass.
The Core of the Issue: A Frozen Tax Scale
At the heart of the debate lies the proposed 2% increase in the six income
tax brackets, aimed at protecting taxpayers from soaring price increases
and maintaining a constant level of taxation. Without a budget, this
adjustment won’t be implemented, effectively freezing the tax brackets at their
2024 levels.
The scenario echoes concerns raise by the French Observatory of Economic Conditions
(OFCE).
This lack of adjustment could hit those on lower incomes hardest.
The OFCE estimates that a total freeze in tax brackets would result
in up
to 380,000 new households being subject to income tax. For those who
are currently just short of paying income tax,
Not Everyone Will Feel the Bite
it’s not all bad news
While many households could face increases in their tax bills, the
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How would a freeze on the income tax scale in France impact taxpayers, particularly those with lower and middle incomes?
## French Taxpayers Face Anxious Wait as Budget Talks Stall
**Interviewer:** Joining us today is Alex Reed, a tax expert specializing in French fiscal policy. Welcome.
**Alex Reed:** Thank you for having me.
**Interviewer:** As the year comes to a close, there’s a lot of uncertainty surrounding the French income tax. Can you give us some context on what’s happening?
**Alex Reed:** Certainly. The government’s proposed budget for 2025 is facing significant pushback in parliament. Part of the controversy revolves around a potential freeze on the income tax scale. This means that, instead of adjusting for inflation, the tax brackets would remain as they are.
**Interviewer:** So what would this mean for French taxpayers?
**Alex Reed:** Without adjustments, many taxpayers could find themselves paying a higher percentage of their income in taxes than they currently do. Essentially, inflation would silently erode the value of those tax brackets, making their income, in real terms, taxed at a higher rate. [[1](https://www.service-public.fr/particuliers/vosdroits/F1419?lang=en)]
**Interviewer:** This sounds concerning. Is there any indication which way the budget negotiations are headed?
**Alex Reed:** It’s a tense situation. There are strong voices on both sides of the debate. The government argues that a freeze is necessary for fiscal responsibility, but opposition parties are pushing for adjustments to protect lower and middle-income earners from a de facto tax hike.
**Interviewer:** It sounds like French taxpayers will have to wait and see what happens in the coming weeks.
**Alex Reed:** Absolutely. The stakes are high, and the outcome of these negotiations will have a direct impact on millions of households.
**Interviewer:** Thank you for sharing your expertise with us today, Alex Reed.
