Attack the “wage trap” and free up funds for a strained budget for 2026. The future government of Sébastien Lecornu could choose to reduce the tax exemptions that currently affect companies, our colleagues at Les Echos report.
The measure could bring in around €1.5 billion, an unexpected gain, while closing the budget for next year promises to be difficult. The Prime Minister is under pressure from the socialists, who in their counter-budget presented this summer requested an effort for this aid of the order of 3,000 million euros.
Discussions with the reformist left should also be organized around new spending, rather than new revenue: the suspension of pension reform, in particular, should be compensated; This morning, the LR budget rapporteur supported another PS request, the reduction of the generalized social contribution or CSG.
The measure could be approved by decree – therefore, without going through the parliamentary process – without knowing exactly what salaries a possible new reform would cover.
80 billion in aid to companies
Exemptions from the tax on salaries represent a total of 80 billion euros that companies do not pay, explained two years ago in a report published by the socialist Jérome Guedj and the former Macronist Minister of Industry Marc Ferracci. This aid costs the State five times more than in 2000.
Another report, commissioned by Matignon and published at the end of 2024 by economists Antoine Bozio and Etienne Wasmer, called for reforming this aid, increasing the burdens for low wages and reducing them for higher wages. The goal? Allowing wage increases, while more and more employees are stuck on the minimum wage.
“The policy of reducing employer contributions for low wages had a significant impact on employment when it was implemented in the 1990s. It was particularly effective when mass unemployment affected mainly the least qualified population. If it remains relevant today, the improvement in the labor market situation and the significant level of current reductions in employer contributions make its effectiveness in terms of job creation lower than in the past. 1990s,” the two researchers explained.
Since then, the Bayrou Government has decided, in particular, to eliminate exemptions for salaries above 3 SMIC, without affecting the taxation of low salaries. This could be done with Sébastien Lecornu.
Source: BFM TV
