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3d ago

France Weighs Scrapping Retiree Tax Break, Facing Political Backlash

The government considers eliminating a 10% pension tax abatement to save €4.5 billion, as opposition parties and internal divisions challenge the proposal.

Amélie de Montchalin, la ministre des Comptes publics, propose de supprimer l’abattement fiscal de 10% dont bénéficient les retraités.
Pendant la présidentielle de 2022, les retraités représentaient la moitié de l'électorat du parti Les Républicains.
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Overview

  • Public Accounts Minister Amélie de Montchalin has proposed removing the 10% tax abatement for retirees, a measure introduced in 1978, to contribute €4.5 billion toward a broader €40 billion savings target for 2026.
  • The proposal has drawn unified condemnation from Rassemblement National, La France Insoumise, and Les Républicains, with critics accusing the government of targeting a politically sensitive demographic.
  • Government spokesperson Sophie Primas emphasized that no final decision has been made, aiming to quell growing political tensions over the issue.
  • Reports from the Conseil des prélèvements obligatoires and DREES highlight that the current tax abatement is insufficiently targeted at low- and middle-income retirees, despite retirees' median living standards being slightly above the general population.
  • The debate underscores broader tensions surrounding intergenerational equity, fiscal austerity, and the electoral risks of alienating a key voting bloc ahead of the 2027 presidential election.