Social and Tax Reforms: Winners and losers of the Macron era

But who are the winners of the Macron policy? The third Macron Five-Year Finance Bill is currently being debated in the National Assembly. One year after the yellow vests movement, which French will this time be used – or not – in 2020? And finally, what impact will three years of social and tax reforms have had on each Frenchman's wallet?

Between the drop in the housing tax and taxes, tax exemption bonuses and overtime, the revaluation of small pensions, the virtual freeze of the largest … The Institute of Public Policy (IPP), consisting of researchers in economics , took stock of the winners and losers for 2020, and since the arrival of Emmanuel Macron. And contrary to popular belief, it is the middle class that has emerged best in terms of disposable income, that is to say after taxes and after receipt of social benefits. This is not going to change the perception of the French, 80% of whom think that inequalities are widening.

2020, catching up for the middle classes

Regarding the 2020 budget, the IPP estimates that it "will lead to an increase in disposable income of 252 euros per household on average". An increase that will benefit above all the middle class that will benefit, according to the institute, a "catch-up" following the measures taken in favor of yellow vests.

Two reforms will particularly contribute to this rebalancing. First the decline in income tax, "which will benefit the 50% of the wealthiest households," summarizes the report. Logical impact since half of the French do not pay this tax.

Second measure with a particularly positive impact for the middle class: the further decline in the housing tax, even if it benefits all households except the richest 2%. Take the example of a family with two children: the low-income one (2600 euros per month) will see its purchasing power increase by 13.26 euros per month, while the average family, which earns 3625 euros, will have EUR 38.24 extra per month, according to the IPP. But the one earning 4904 euros, for example, will progress even more: + 68.30 euros / month. Beyond this slice of income, the improvement is decreasing.

Modest and retired to the trouble

Thanks to the revaluation of social benefits, the most modest also see their purchasing power increase, but to a lesser extent. On the other hand, there will be losers: the low revaluation of their pensions will thus lose purchasing power to one retiree out of two.

Between + 1 and + 3% over three years

At the end of the three Macron budgets, all French people will have seen their disposable income increase, with the exception of 4% of French people among the most modest.

The middle class is doing best with an average increase of 3% over the three years. The 20% of the most modest households will have to be satisfied by + 1% over three years. The richest 20% will be the same, with the exception of the richest 1% whose income (16,000 euros / month on average for a couple) will increase by 2% (+320 euros / month) essentially thanks to the abolition of the wealth tax.