Revamping Wealth Taxation: A Strategy for Funding the Ecological Transition

Revamping Wealth Taxation: A Strategy for Funding the Ecological Transition

A Glimpse into the Mattei-Sansu Report

Deputies Jean-Paul Mattei and Nicolas Sansu have recently submitted a report, just in time for the presentation of the 2024 finance bill, bearing several sensitive proposals. The report hints at creating a temporary tax on the wealth of the wealthiest individuals at a European level, to fund the ecological transition. It also suggests an increase in the “flat tax” on capital income from 30% to 33% and an overhaul of the taxation of holdings or successions.

The Wealth Landscape in France

According to the report, 92% of wealth in France is owned by the wealthiest half of households, with a third of these assets belonging to the top 5% of French citizens. The deputies believe that these growing inequalities should prompt us to rethink taxation and propose solutions.

Proposing a New Tax on Large Fortunes

One of the more controversial proposals is the creation of a new tax on large fortunes to fund the ecological transition. This would be a return of a “green ISF,” as recommended by a report by Jean Pisani-Ferry and Selma Mahfouz earlier that year. The deputies argue that a 5% levy spread over thirty years on the net financial assets of the top 10% wealthiest individuals would bring in 150 billion euros, or 5 points of GDP. They insist that this should be done at a European level to avoid discrepancies with other countries.

Targeting the Flow of Dividends and Succession Transmissions

The report also suggests significantly increasing charges applied to the flow of dividends in holdings. This technical measure aims to tackle the issue of the decreasing tax rate at the top of the income scale. Among the 27 proposals in the Mattei-Sansu report, several also target the regime of succession transmissions. The deputies want to better regulate the Dutreil pact, reduce tax treatment differences between children within blended families, and align the taxation of life insurance with that of direct line successions.

Significant Proposals Regarding Real Estate

The deputies also make some significant proposals regarding real estate. They recommend gradually but completely removing the tax advantage granted to Airbnb landlords. They advocate for the end of the tax exemption on capital gains after thirty years. Lastly, they wish to deduct from transfer rights (the so-called “notary fees”) at resale those paid during a first purchase. These proposals promise to fuel debates in the Assembly, especially as the real estate sector faces an unprecedented crisis and the State has so far refused to open the budgetary floodgates to support it.