What to do in the face of the grumbling of the “yellow vests” on the price of fuel ? Emmanuel Macron and his government remain very firm on their position, the name of the eco-tax. The increase in taxes coming in 2019, 6 cents for diesel and 3 cents for gasoline, “will not be suspended,” repeated the minister of Economy and Finance, Bruno Le Maire, Monday morning on RMC. Facilities to assist households dependent on their vehicle could be proposed, but at the margin. The head of the State has suggested in an interview with the regional press made on Sunday that he could support initiatives like that of the region Hauts-de-France which will provide transportation assistance for those who make more than 30 km per day of travel to go to work. This kind of assistance, normally imposed, should be défiscalisé, says one at Bercy.
For his part, Bruno Le Maire, has focused on the expansion of the premium to the conversion, which could be lined by the automobile manufacturers. Several solutions to appease the wrath of motorists had yet been proposed, outside of the majority, but not only. Matthew, an Orphan, mp LREM close to Nicolas Hulot, proposed, for example, before the grunts do monte, an extra tax credit for the years in which oil prices are high and only for motorists in rural areas or other discount tax for the rural households of modest means would like to change their vehicle.
Read also Price of diesel fuel : the reasons for the anger
Las. None of these amendments has been retained. However, the increase in the price of oil automatically leads to the increase in fuel taxes, through the VAT, set at 20 %. To such a point that, in 2001, Laurent Fabius, had put in place a system of flexible tax, the ” TIPP flottante “, to compensate for the soaring price of gasoline. The idea was to lower the domestic tax on energy products to offset the effect of VAT on prices at the pump.
But, for the Council of compulsory levies, this device has not demonstrated its effectiveness. “The decline was of the order of 2.19 euro cents per litre, to which is added a relief or tax bonus outstanding at the maximum of 0.88 euro cent per litre “, reminiscent of the tax specialists in a 2005 report. Needless to say a drop of water. The State has yet had to make a cross on $ 2.7 billion of tax revenue between October 1, 2000 and July 21, 2002, while the VAT increase was only 1.4 billion…
The State is not certain to reap windfall revenues thanks to the VAT. If consumption is reduced, the effect is quickly erased. The government, which is keen to meet its objectives of reducing the public deficit to 2.8 % next year, to remain under the fateful bar of 3 %, does not seem willing to take the risk. To the extent that the increase in oil prices, hitting households and businesses to the portfolio, weighs in on the economic growth and can therefore, on the contrary, widen the deficit rather than bring in taxes. According to an estimate of Bercy, an increase of 10 dollars in oil prices, the exchange rate unchanged, would increase the deficit by 0.2 percentage point of GDP at the end of 2 years. For the moment, the price of a barrel of the North sea, the Brent, is roughly in line with the forecast of the ministry of Economy and Finance to 2019, set to 73 dollars. This price has dropped since its peak in early October. It is spending more than $ 86 less than 73 dollars in the beginning of the week, which should mitigate the spike in prices in the service stations. But nobody really knows how high oil prices will be in six months or a year…
I prefer the fuel tax, the taxation of labour.
” I assume correctly that the tax due on the diesel is at the level of that of gasoline, and I prefer the fuel tax, the taxation of labour “, has defended the head of State in his interview to the regional press made on Sunday.
On paper, the head of the State has reason. The increase of fuel taxes is more than offset by other tax cuts, including on the job. In 2018, the rate of compulsory levies, will thus be slightly lower at 45 %, compared to 45.3 % of GDP in 2017. But the French did not realize. And for good reason, the bulk of the tax cuts for households has been focused on the taxation of the capital with the establishment of the flat tax is 30% and the processing of the ISF in IFIS. The decline of the housing tax has just been recognized by 80 % of households, as well as two-thirds of the gain from the wage related to the abolition of the unemployment contribution and illness for the employees. Meanwhile, the retirees, themselves, have cashed in, except for the most modest of them, the increase of 1.7 percentage point of the CSG…
also Read purchasing Power : nearly eight retirees on ten losers in 2020
compulsory levies down
By 2019, the mandatory payments are lower, from 45 to 44.2 % of GDP. But part of this decrease will be one-off and the business that will affect the YEAR paid as of 2018. They will see their social charges decrease in a sustainable manner. The fact remains that the households will benefit from the reductions in contributions throughout the year, in contrast to 2018, as well as of the second tranche of more than 30 % of the property tax. In the net, that is to say, once taken into account the further increases in fuel taxes, January 1, 2019, the tax cuts for households will reach 6 billion euros, when they should have decreased by only $ 1.8 billion in 2018, mainly due to the decrease of the taxation of capital, which particularly benefits the more affluent.
But it is not sure that this improvement will be sufficient to reassure motorists, including retirees. The next year, their pensions will be uprated by only 0.3 %, well below inflation, particularly high at this time at the gas pump.
On the same subject, an Increase in fuel prices : Emmanuel Macron tries to de-mine the anger