Monday, July 25, 2016

Taxation: the majority ready to move on CSG retirees – Les Echos

Tax gesture to households envisaged by Hollande could take other forms than just a drop in income tax. While offs are expected in late August, several alternative scenarios, or complementary (available means), are being studied. One of them would be to lower the CSG for modest pensioners. The rapporteur of the budget in the Assembly, the member Valérie PS Rabault, working on an amendment to the 2017 Finance Bill to raise the income threshold that triggers the payment of the CSG (read here the interview with “Echoes”) . An idea looked with some interest at Bercy.

At present, benefit from a reduced rate of CSG pensioners whose income tax reference is between 10,676 euros and 13 956 euros for a share (13 376 and 21 408 for two shares). The idea would be to raise these limits to allow more pensioners to receive either an exemption or a reduced rate of CSG (3.8% instead of 6.6%).

The different levels of CSG

pensioners are subject to a rate of CSG of 6.6%, lower that of employees (7.5%).

When the income tax reference is between 10 676 and 13 956 euros for a share is a reduced rate of 3.8% applies. Below, retirees are exempt from CSG.

Until 2015, the reduced rate applied to non-taxable retirees, but this provision was reviewed in 2015 Finance Law, because some homes with comfortable incomes but related tax credits could benefit from a reduced rate.

one way to correct some collateral effects of tax measures taken in early of five years, in particular the taxation of pension increase for dependents (10% for three or more children). This has mechanically increased the income tax reference Pensioners Concerned. Many found themselves paying a full rate CSG (6.6%) without their revenues have increased. In a report published last year, Valerie Rabault had amounted to 510,000 the number of affected households, of which almost three quarters in the income bracket between 12,000 and 18,000 euros a year. They had lost an average of 590 euros per year.

This option has the advantage of an impact on the income available from January 2017, before the presidential election. The drawback to target a specific audience that is not the same as mentioned previously the head of state. In his interview with the “Echos”, 30 June, François Hollande stated that his “preference would go toward a targeted measure for the middle class. “

Increase premium business?

The debate on the CSG does not exhaust one concerning the income tax. A new gesture to the bottom of the scale, as in 2014 and 2015, seems more difficult to envisage, within the wake debate on the concentration of the tax. In 2015, only 45.6% of households have paid tax on income, a level not seen since 2009, during the crisis. So the government would work on measures concerning deciles higher income, without making new non-taxable.

The third option on the table would be to increase the premium of activity or at least some of its components. Bercy look particularly closely the situation of the individual assets. Again, it affects the working poor as middle class.

The extent of or gestures depend on the expected growth for 2017. “It depends sums money that is available and the overall political equation. He is sure he would be difficult to reduce taxes for businesses in the pact without doing anything for households, “ summarizes Dominique Lefebvre, PS deputy chairman of the Finance Committee of the Assembly.

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