The recent legislative victory of the Nouveau Front Populaire (NFP) has brought about economic uncertainty, particularly in terms of taxation policies. One of the key points of the NFP program is the plan to abolish the Flat Tax on capital gains in favor of income tax. This proposed change would heavily penalize large capital gains, leading to a potential loss in tax revenue for the State.
One area of concern is the taxation of cryptocurrencies, which has become increasingly popular among investors. The NFP’s proposal to abolish the prélèvement forfaitaire unique (PFU) would mean that all capital gains on digital assets would be taxed as labor income, following the established tax brackets. This could have significant implications for cryptocurrency investors, as they would no longer benefit from the simplified tax regime introduced in 2018.
The NFP’s fiscal program also includes other significant changes, such as increasing the progressivity of income tax, reinstating a strengthened solidarity tax on wealth (ISF) with a climate component, and reforming inheritance tax to target the highest wealth. These changes could have wide-ranging effects on the tax burden of individuals, particularly those with high incomes and large portfolios.
However, the proposed reforms could come at a cost to the State. According to calculations by the Institut Montaigne, abolishing the Flat Tax would actually result in a loss of tax revenue for the government. While the reform may benefit most current investors, it could heavily impact the biggest investors and lead to a decrease in taxable base and lower revenues.
Overall, the victory of the NFP and its proposed tax reforms have sparked a debate on the future of taxation in France. The coming months will see discussions on the impact of these changes on different income brackets, the potential effects on cryptocurrency investors, and the overall economic implications of the proposed reforms.