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Budget 2026 Proposal: Yaël Braun-Pivet foresees the possibility of tax hikes not being immediately off the table

Wealthy retirees should potentially increase their contributions, as suggested by the President of the National Assembly.

Tax hikes may not be completely discounted in the 2026 budget, as per Yaël Braun-Pivet's viewpoint.
Tax hikes may not be completely discounted in the 2026 budget, as per Yaël Braun-Pivet's viewpoint.

Budget 2026 Proposal: Yaël Braun-Pivet foresees the possibility of tax hikes not being immediately off the table

The French government is set to find €40 billion in savings for the 2026 budget, primarily through a combination of spending cuts and fiscal measures aimed at reducing the public deficit[1]. This ambitious plan, spearheaded by Yael Braun-Pivet, the President of the National Assembly, includes a range of measures aimed at restoring fiscal stability amid political challenges and economic pressures.

Key elements of this plan include spending reductions amounting to around €30 billion, which notably threaten sectors like utilities and infrastructure that rely on state funding, such as companies Engie and Vinci[2]. The plan also includes reforms related to pensions, including a compromise to reduce the full pension age from 67 to 66.5 and improvements for women’s pensions, while upholding the gradual increase of the minimum retirement age to 64 as per the 2023 law[3].

In addition to spending cuts and pension reforms, the plan also includes possible tax increases or adjustments, including the de-indexation of income tax from inflation and reconsidering the CSG contributions scale on pensions. This implies higher contributions from wealthier retirees and heirs, contributing to the savings target[3].

Braun-Pivet has suggested broadening the perimeter of savings to include de-indexation of income tax, CSG [general social contribution] scale on pensions, and pensions. She also proposes abolishing the 10% tax deduction on pensions as a means to raise €4 billion euros annually[4].

However, Braun-Pivet emphasises the need to spare the most vulnerable from the impact of savings measures[5]. She has suggested that wealthier retirees could be asked to contribute more towards the savings target[6].

Interestingly, the President of the lower house does not propose abolishing the 10% tax deduction on pensions or aligning the highest CSG rate with that of employees in all instances[7]. She also does not mention sparing the most vulnerable from the impact of savings measures in every context[8].

The President of the lower house is also considering taxing "super inheritances" as a means to generate additional revenue[9]. It is worth noting that 0.1% of heirs receive amounts exceeding €13 million euros and pay an average of 10% of inheritance tax[10].

By the end of the year, a consensus parliamentary initiative is being aimed for, based on existing proposals[11]. Braun-Pivet supports the principle of a 'blank year' for potential savings beyond 2026, and she wants to clarify competencies to reduce the cost of the territorial mille-feuille[12].

In conclusion, the French government's plan to find €40 billion in savings for the 2026 budget is a complex and multi-faceted approach, involving spending cuts, pension reforms, and selective tax or contribution increases, particularly targeting wealthier individuals among retirees and heirs. The plan is part of a broader strategy to restore fiscal stability, and it will be interesting to see how it evolves in the coming months.

Sentence 1: The French government's plan to find €40 billion in savings for the 2026 budget is not only focused on spending cuts and pension reforms, but also includes the possibility of de-indexing income tax from inflation and reconsidering the CSG contributions scale on pensions, which could potentially lead to higher contributions from wealthier retirees and heirs.

Sentence 2: The French government's plan to restore fiscal stability also involves broader strategies, such as considering taxing "super inheritances" as a means to generate additional revenue, particularly targeting those heirs who receive amounts exceeding €13 million euros and pay an average of 10% of inheritance tax.

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