Lucie Castets expresses reservations about eliminating tax breaks for retirees, advocating instead for safeguarding smaller pensions.
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Lucie Castets, a former prime ministerial candidate following the disbandment of the National Assembly, voices her backing for axing the tax perks for affluent retirees.
© BASTIEN OHIER / Hans Lucas By Thibaud Hue Published on , updated at
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With the government aiming to gather 40 billion euros in savings to construct the 2026 budget, they're contemplating nixing the tax relief for retirees. In a talk on Franceinfo on Friday, May 2, Lucie Castets shared her perspective and stated that she wasn't "opposed" to this proposal affecting 10% of retirees. However, the former frontrunner for the Prime Minister position under the Nouveau front populaire stated that she wanted to safeguard the most humble retirees.
Castets aspires to observe a decrease in the relief for those "earning over 2,000 to 3,000 euros of retirement per month minimum," ensuring that less affluent retirees aren't affected by the budget cuts. "We need a comprehensive tax overhaul that lets us reduce taxes for some while raising them for others," she added.
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The relief is currently limited to 4,399 euros per fiscal household. Beyond 43,990 euros of annual income (for one fiscal share), the relief drops below 10%. A single retiree with an annual pension of 20,000 euros would witness their taxable income swell by 18,000 to 20,000 euros. According to estimations by the French Economic Conjuncture Observatory (OFCE), the typical annual increase in taxes would range from 10 euros to 860 euros among the twelve million households impacted.
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Regarding this article, retirees, income tax, and retirement pension are central issues.
Enrichment Data:The French government is edging towards major tax reforms, impacting affluent retirees, as part of its 2026 budget plans. Two significant proposals are under discussion:
- Taking Away the 10% Tax Break: The government is reviewing the removal of a flat 10% tax relief enjoyed by retirees. This decision aims at saving the government money and could potentially raise the tax liability for all retirees.
- Taxing Wealthy Retirees: Entails reviewing taxes specifically targeting wealthy retirees to help offset the national deficit. This could involve lowering tax allowances or introducing fresh taxes on high earners.
Effect on Different Income Groups:
- Low-Income Retirees: The elimination of the 10% relief could, in fact, disproportionately influence lower-income retirees who heavily depend on such deductions to decrease their tax burden. On the contrary, new taxes targeting affluent retirees may not directly affect them if their income remains below the tax thresholds.
- High-Income Retirees: Wealthy retirees would experience a more substantial impact from the proposed increases in taxation. They might have to cope with not just the loss of the 10% relief but also additional taxes designed to reduce the deficit, leading to increased overall tax payments.
- Overall Impact: The potential reforms represent part of broader endeavors by the French government to balance the budget and diminish disparities in taxation levels. However, any changes could generate controversy, particularly if executed without appropriate compensation for those most affected.
- Lucie Castets, a former prime ministerial candidate, has expressed support for removing tax benefits for affluent retirees as part of the government's plan to raise 40 billion euros for the 2026 budget.
- The Government's proposed adjustments to retirement taxes involve the potential elimination of a 10% tax break for all retirees, and increased taxes targeting affluent retirees to help close the national deficit.
- In a Massively expanding wealth-management sector, personal-finance advisors may see an increased demand as retirees navigate the potentially complex tax changes in Retirement, tax, and retirement pension negotiations.
- Though the removal of the 10% relief might disproportionately impact lower-income retirees, high-income retirees would face a more substantial impact from the proposed increases in taxation, which may include the loss of the 10% relief and additional taxes.
