Taxation 2018: taxation on savings maintained at an optimal level
Posted on July 14, 2017 by Marion
To finance the elimination of employee contributions, unemployment and sickness, the 1.7 point increase in the CSG will be applied next year, say economic analysts.
As part of the tax reform of the government program presented by Prime Minister Edouard Philippe, the tax on savings will be revised upwards. The tax rate on savings income could reach 60% in 2018. This will be a record.
The increase in the Generalized Social Contribution or CSG is one of Emmanuel Macron's flagship measures. It was confirmed before the deputies by the Prime Minister.
The timing of tax reforms is called into question
The report of the Court of Auditors concerning the fiscal year of the previous regime was damning. The budget deficit is huge. It is a poisoned legacy that calls into question the calendar of tax reforms decided by Emmanuel Macron.
The application of the single-rate tax of 30%, another major reform of the taxation on savings, could be postponed until 2019 precisely because of budgetary constraints. The Prime Minister has set a target of 3% budget deficit in 2018. This requires deep cuts in the budget and therefore a lot of austerity.
Taxation on savings penalizes savers
To reduce the taxation of savings, the President of the Republic has decided to introduce a single rate taxation of 30%. It concerns income related to real estate like interest, dividends and valuables. This measure is welcomed by real estate investors who have significant income. The current tax system is unfavorable to them. It exposes them to a tax of up to 58.21%.
We can expect a rise in the rates of social security contributions. They will drop from 15.5% to 17.2% next year. This increase in taxation on savings is inevitable. But it risks penalizing the vast majority of savers.
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