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What is the story about?
French lawmakers on Monday begin reviewing Prime Minister Sebastien Lecornu's 2026 budget, which aims to tighten public finances by over 30 billion euros ($35 billion) – roughly 1% of GDP.
The budget squeeze would come through 17 billion euros in spending cuts and 14 billion euros in new taxes, although the draft bill is likely to be heavily amended in the divided parliament.
To secure cross-party support, the bill will include a suspension of President Macron's 2023 pension reform, costing 400 million euros in 2026 and 1.8 billion euros in 2027.
MAIN TAX MEASURES
Wealth Tax: A 2% levy on assets in holding companies not used for business purposes, expected to raise 1 billion euros.
Politicians on the left are demanding a broader 2% tax on all wealth over 100 million euros, which they say could generate 15-20 billion euros in revenue.
High Earners: A temporary tax on top incomes will be extended, affecting 20,000 taxpayers and raising 1.5 billion euros.
Big Companies: A surtax on firms with over 1 billion euros in revenue will be extended but halved, generating 4 billion euros (down from 8 billion euros expected this year).
REVENUE-GENERATING REFORMS
Social Benefits and Pensions: Frozen at 2025 levels; pensions to rise slower than inflation until 2030.
Income Tax Brackets: Not adjusted for inflation, bringing in 1.9 billion euros and pushing 200,000 new taxpayers into the system.
Tax Breaks: 23 exemptions targeted, including school fee deductions and a key deduction for pensioners, yielding a combined 5 billion euros.
Health Savings: Increase in state health insurance deductibles, generating 2.3 billion euros.
OTHER MEASURES
* 1 billion euro exceptional tax on health insurers.
* 2-euro levy on small parcels, targeting Chinese imports, expected to raise 500 million euros.
* Implementation of the 15% global minimum corporate tax to generate 500 million euros.
($1 = 0.8564 euros)
The budget squeeze would come through 17 billion euros in spending cuts and 14 billion euros in new taxes, although the draft bill is likely to be heavily amended in the divided parliament.
To secure cross-party support, the bill will include a suspension of President Macron's 2023 pension reform, costing 400 million euros in 2026 and 1.8 billion euros in 2027.
MAIN TAX MEASURES
Wealth Tax: A 2% levy on assets in holding companies not used for business purposes, expected to raise 1 billion euros.
Politicians on the left are demanding a broader 2% tax on all wealth over 100 million euros, which they say could generate 15-20 billion euros in revenue.
High Earners: A temporary tax on top incomes will be extended, affecting 20,000 taxpayers and raising 1.5 billion euros.
Big Companies: A surtax on firms with over 1 billion euros in revenue will be extended but halved, generating 4 billion euros (down from 8 billion euros expected this year).
REVENUE-GENERATING REFORMS
Social Benefits and Pensions: Frozen at 2025 levels; pensions to rise slower than inflation until 2030.
Income Tax Brackets: Not adjusted for inflation, bringing in 1.9 billion euros and pushing 200,000 new taxpayers into the system.
Tax Breaks: 23 exemptions targeted, including school fee deductions and a key deduction for pensioners, yielding a combined 5 billion euros.
Health Savings: Increase in state health insurance deductibles, generating 2.3 billion euros.
OTHER MEASURES
* 1 billion euro exceptional tax on health insurers.
* 2-euro levy on small parcels, targeting Chinese imports, expected to raise 500 million euros.
* Implementation of the 15% global minimum corporate tax to generate 500 million euros.
($1 = 0.8564 euros)
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