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Increase in the Generalised Social Contribution in France: further injustice?

In a context of general discontent in the face of taxation, here is a major reform in France that we have not finished talking about. During the 2017 presidential campaign, Emmanuel Macron, candidate of the party “En marche”, defended the following measure: rise the Generalised Social Contribution (GSC) in order to finance a huge Social Contribution (on salaries) drop, which would allow to raise the buying power of employees only. Now at the Elysée, Mr. Macron is preparing for the implementation of this campaign promise for January 1rst, 2018. If this measure can effectively increase the net wage of a part of the employees, some other categories of the population could lose out if no compensation measure is implemented. This is particularly the case for the better-off pensioners.

Regarding Emmanuel Macron: “Today’s poor are often less retirees than young people”. Because if we add pensions, property income and benefits, retirees’ standard of living if growing since the 70’s. But in 2018, their standard of living will decrease according to official forecasts: career crossed by unemployment, calculation of pensions less advantageous etc. Thus, the fate of retirees is deteriorating. Is this new measure unfair?

This measure will be implemented on retirees with a net wage superior or equal of €1200 per month, representing 60% of the retirees. The government is asking for “a small effort” but we may raise here injustices: do the government took into account inherent burdens of old age? Many retirees are no longer capable to take care of themselves or even of their house alone. For instance, going to the pedicure is about €25 per session and for a domestic help, it is about €21,90 by hour. These are expensive burdens who unfortunately retirees cannot live without. Hence, taking away a part of their small pension, without any compensations (e.g. reimbursement of health mutual), makes the end of the month even more difficult.

On the September 28th, 2017, to show their opposition against the GSC increases, pensioners have made strikes in several cities in France. What we can raise here is the following: is it clear that this measure, in addition of being unfair, increases inequalities and hate between social categories (the “young” and the “old”) which makes the government even more unpopular and, justify a government communication lack with the nation: why there is an increase on GSC for everybody but a removal of Social Contribution on only workers?

We can raise another incoherence of the Emmanuel Macron’s reforms: in 2018, this latter wants to replace the Wealth Tax by a Property Tax with an exemption of capital and a taxation focussed on the real estate patrimony. We can thus assume that the concerned people will become richer. So, the government’s argument concerning the taxation on retirees who are richer than the young workers may be unfounded. To be taxed on real estate, we can assume that those people have an income greater than €1200, so why taxing retirees and not these latter instead?



Author: studentnovasbe

Master student in Nova Sbe

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