MPs adopted during the night from Friday to Saturday two items reducing the WEALTH TAX and removing the “tax shield”.
It unanimously that the members voted in at about 2 o’clock in the night from Friday to Saturday, the repeal of the tax shield, a measure called “social justice” by the Minister of Budget, Baroin. However, this provision, which limits the tax to 50% of revenues, will not disappear immediately from the tax landscape: the shield will eventually be removed from direct taxes paid in 2011 and 2012 in respect of income made in 2011 – which still represent a cost to French state of $ 550 million in 2012 and 200 million euros in 2013, according to the president of the PS Finance Committee of the Assembly, Jerome Cahuzac.
Flagship device the 2007 campaign of Nicolas Sarkozy, the tax shield is therefore likely to remain a drag on the majority before the 2012 presidential election. For the same time, as expected, the House voted a few hours earlier on Friday, Article 1 of the supplementary budget for 2011. This article sets to music the executive decision to reduce the solidarity tax on wealth (ISF) in exchange for the removal of the tax shield.
The reform of the ISF, which applies now, through raising the threshold for entry into the tax to 1.3 million euros against 800,000 euros previously. This would clear the bill under the TFR of 300,000 taxpayers. To smooth the effects of thresholds, a device discount is introduced for a range of assets, 3 million and 1.4 million euros, and for those between 3 and 3.2 million euros. The other aspect of the reform is a new tax scale that rates are now 0.25% below three million in assets, 0.5% above.
Friday, during the debate an amendment was adopted allowing a small reduction of ISF under additional dependent children. That provision states “increase the amount of this reduction for each dependent from 150 euros to 300 euros”, including adult children who study.
Next Tuesday, the deputies then proceed to the solemn vote of the entire supplementary budget. The text will then be sent to the Senate from June 21 The government’s goal is to finally adopt this reform until mid-July.
Moreover, MEPs adopted an amendment to the budget of the government signing the indemnity that France should pay to Taiwan in the frigate affair, after the confirmation on appeal on June 9 of the conviction of Thales., Or 630 million euros, of which 460 million for the state and 170 million to Thales.
MPs endorsed the article of the bill that creates a compensation fund for victims of benfluorex, the molecule of the Mediator, accused of drug caused the death of 500 to 2,000 people.
It is worth noting that the bill also provides for a rate hike of two higher tax brackets inheritance and donations. And finally, it creates a tax on second homes by non-residents and a tax for taxpayers who transferred their tax domicile abroad (“exit tax”).