French budget 2014: the impact of the new tax measures?
Résumé
Released at the end of September, the 2014 French Budget aims to reduce the public deficit by restricting public spending. While the announced tax reforms are less radical than those implemented in the previous two years, they project an additional increase in revenue of 2.7 billion euros (that is, 0.1% of GDP). This note presents an overview of the evolution of public finances and an analysis of some of the announced tax measures that will affect expected revenues for the 2014 financial year. Changes to income tax are limited and mainly affect those in the highest income decile; the increase in VAT also has a mildly redistributive effect, thanks to the increase in the intermediate rate. There remain, however, a number of unknown effects relating to the impact on employment of the tax credits for competition and employment (CICE) scheme and the effectiveness of the announced spending cuts.
Domaines
Economies et finances
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