lEmmanuel Macron’s presidency was marked by the implementation of fiscal measures in favour of the richest, in particular proportional taxation of capital income (“single tax”) and the replacement of the solidarity tax on wealth (ISF) by a more limited real tax, a tax on wealth assets.
From a fiscal equity perspective, these measures have reinforced the regressivity of the tax: the richest pay less tax in proportion to their income than the rest of the population. From a budgetary perspective, these measures have affected public accounts and forced additional cuts in other sectors. Finally, from an economic efficiency perspective, these measures have had no observable effect on investment or growth, according to France Stratégie.
Faced with this failure, and given that additional tax revenues are needed to implement an ambitious economic, social and environmental policy, it is urgent to give ourselves room for manoeuvre by creating a super-ISF. As researchers and senior officials, we tried to define, in a note published by the think tank Terra Nova, what a “super-ISF” could be for the 2025 finance bill.
This proposal is part of an environment in which taxation of the “super-rich” is at the forefront of the international agenda, particularly in the context of the G20 and the recent Brazilian presidency. Many countries such as the United States, Canada, Spain, Norway and the United Kingdom have recently implemented or announced strengthening taxes on the super-rich.
Global trend
This global trend is a reaction to the failings in the taxation of the richest around the world. The level of taxation of their income, whether through income, property or corporate taxes, has been reduced in many countries in recent decades. In addition, the income structure of the richest offers them opportunities for tax optimisation, for example by holding asset holding companies that serve to accumulate capital income without distributing it to avoid its taxation by income tax. This results in systematically lower taxation for the richest compared to the rest of the population.
So what could a super-ISF look like in France? To be effective, the re-establishment of the ISF must be accompanied by a reform of its functioning, influencing not only its rate, but also its base and its ceiling. Indeed, the ISF, as it existed until 2017, had a limited return, especially for the richest, due to two measures. Firstly, the exemption of professional assets, i.e. shares held by company directors, mainly benefited directors of large companies, whereas it was initially intended to protect SME directors.
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