New income tax for France

[OFSO]

Not stating this as fact, so perhaps someone will confirm it. I heard yesterday in Paris that effective 1.1.2019 a new tax will be implemented in France. Deductions will be made by the employer from the wages paid to the employee and passed directly to the tax office. The requirement for the employee to make an annual declaration and pay tax on the (increasingly pitiful) remainder of his income following the end of the tax year is unchanged. It's all being kept under wraps for now (I wonder why) and I have no idea of the percentage to be deducted, but following the cries of outrage among recipients of a French wage or pension it was suggested that people set aside 10% of their remuneration to meet this tax "just in case".
Vive le Macron !

[BenThere]

Gee. You'd think people would tire of giving more and more of their income to the state.

[Capetonian]

My understanding is that it's not a new tax, but a new way of imposing tax and social charges.

In the past people who so chose could have their income paid gross, they then did a declaration in May for what they had earned in the previous fiscal (= calendar) year. They then paid in 3 instalments, with a final.balanving payment in October or September.

It's a small step towards what the rest of the world has been doing for decades, but France still lives in the Napoleonic era.

[OFSO]

Ah yes. When is a "tax" not a "tax" ? When it's a "social charge". More interesting is that at the meeting I attended, French tax-payers had called their local offices, in fact our chairman called the head office, and nobody knew anything (or admitted to.)

[Capetonian]

The loathsome Frogs love to tell you that 'ze tax in France ees lower zan in Eengland'. That's true in general, specially if, as they do, you have bred numerous children.

What they don't tell you is that 'social charges' (= tax by another name) are very high, up to 35% on all income in some cases, so as with everything else, they speak half-truths with a forked tongue.

A couple of years ago they combined tax and social charges into one single assessment, although they are still shown as separate items.

That they know nothing, or appear to know nothing, about changes is pretty normal.

[OFSO]

Forgot to say that the new tax will also be deducted from pensions. Can see a few greybeards taking to the streets !

[Capetonian]

It's NOT a new tax. All it means is that the method of collection is changing, and for most domestic income, tax will be deducted at source.

Of course it may net some people who have previously been able to evade tax, which is no doubt why they've changed the system, although it's hard to give the Frogs credit for doing anything intelligent, not that this is exactly original.

[Fox3WheresMyBanana]

There some evidence that attempting to raise the tax rate above a certain average level (which is different for each country, but generally around 40%) results in no more government revenues from taxation being raised. Essentially, people and corporations find ways around the taxes. There can be a delay in response depending on how hidden the new taxes are.
There are three problems with almost all developed countries at the moment.
1. The taxes are at or almost at those limits.
2. Net income corrected for real inflation (i.e. the buying power in one's pocket at the end of the month) is either static or decreasing, due to the offshoring of manufacturing and labour.
3. Every new way of increasing taxes is less efficient than the last, and the collecting of existing taxes also becomes less efficient.

The only way to keep the money rolling in is for the average Joe to lose assets and/or borrow. So, one sees a decrease in ownership (housing especially, but also vehicles, appliances, etc) and an increase in debt levels. The so-called recovery since 2008 is in fact entirely built on debt and asset loss.
Almost all developed countries have not only failed to balance their budgets in years, but have de facto given up ever trying to. The world economy will collapse, but it's very difficult to work out when.

And offshoring does not increase efficiency either, for anyone. Chinese stuff, for example, is increasingly poorly made resulting in increasing levels of waste.

[OFSO]

Now is possible - only possible - the scheme will be delayed yet again as a trial run in a small area revealed a massive number of errors, specifically taxpayers appearing in the list more than once, and system being confused by people with the same name and same initials. Macron has gone from being "in favour" of the new system to "somewhat in favour" of the new system. And we know how important such subtle differences are in French politics.

[Undried Plum]

When is a "tax" not a "tax" ? When it's a "social charge"

Sounds like the excruciating differentiation between Income Tax and the income-based tax called "National Insurance".

[Capetonian]

If we want our people to work harder, tax them less

https://www.telegraph.co.uk/business/20 ... bQffkLMw0H

[Fox3WheresMyBanana]

At the current levels of tax and remuneration, it is not worth me working for someone else at all.
And Canada is better than the UK in this respect.
I'm working a lot for myself, rebuilding my property mainly.

[Slasher]

That Frog actor whatsisname who gave up his citizenship yonks ago apparently wasn't stupid. IIRC the idiotic French prez at the time called him a traitor or something.

I think there'll be a lot more traitors soon.

[Slasher]

Gee. You'd think people would tire of giving more and more of their income to the state.

[off topic]
Ben just asking if you're an American national now who gave up US citizenship and therefore not subject to voluntary US income tax? I would therefore assume you're a citizen of Michigan state (not the State of Michigan).

As an aside It was interesting to find out that Federal congress still officially refers to the 50 States as 'countries'.
[/off topic]