The fiscal measures of the New Popular Front: tax brackets, reintroduction of the ISF, and impacts of the CSG

• Summary
• The new income tax scale: moving toward 14 brackets for greater progressivity
• Tax progression: how the New Popular Front aims to strengthen tax equality
• Return of the Wealth Solidarity Tax (ISF): issues and perspectives
• Reform of the Generalized Social Contribution (CSG): a major step towards progressivity
• Economic and redistributive consequences of proposed fiscal measures
• Upcoming parliamentary debates: obstacles and implementation strategies
• Comparison with other political programs on taxation
• Public finance outlook in the face of new NFP measures
• FAQ: essential questions about the tax scale, ISF, and CSG

The new income tax scale: moving toward 14 brackets for greater progressivity

For several years, the French tax system has been at the center of lively debates regarding its progressivity and its adequacy with current economic challenges. The New Popular Front (NFP) proposes a major overhaul of the tax brackets, shifting from a 5-bracket system to a scale consisting of 14 distinct brackets. This measure aims to increase progressivity — that is, the degree to which the tax adapts to taxpayers’ ability to pay — and to better distinguish different income categories.

In practice, a new scale with 14 brackets would smooth the increase of the tax burden instead of abruptly jumping from one bracket to another, thus reducing the so-called “threshold effect” that affects some taxpayers. For example, currently, exceeding the 41% bracket ceiling can lead to a significant increase in the marginal tax rate. With 14 brackets, this transition would be more gradual, with several intermediate thresholds, especially for higher incomes.

One proposal, sometimes discussed publicly, involves a maximum marginal tax rate reaching 90% on the highest incomes, above roughly 400,000 euros per year. This rate would then include both income tax and the CSG, providing an overall picture of the fiscal weight on very high earners. This idea, far from being fixed, illustrates the intention to substantially raise the marginal rate on top salaries, in a logic of redistribution.

However, the exact mechanism has not yet been officially detailed, requiring reference to the general intentions of the NFP and previous amendment drafts. Another key issue concerns maintaining a significant exemption threshold for low incomes, to ensure that no household earning less than about 4,000 euros per month is disproportionately penalized by this reform.

• Increase in the number of tax brackets
• Refinement of intermediate rates between 0% and high rates
• Possibility of a marginal rate higher than 45%, around 90% with the CSG
• Maintenance of a strong exemption for low incomes
• Goal: to boost tax equality and actual progressivity of the tax

A comparative table between the current and future scales might look like this:

Current brackets (5)	Current rate	Proposed brackets (14)	Estimated rate
Up to €10,777	0%	Up to €11,000	0%
€10,778 – €27,478	11%	€11,001 – €18,000	5% – 10%
€27,479 – €78,570	30%	€18,001 – €40,000	15% – 25%
€78,571 – €168,994	41%	€40,001 – €200,000	30% – 45%
€168,995 and above	45%	€200,001 and above	45% – 90% (including CSG)

This scaled system, once adjusted, would need to be subjected to a rigorous impact study to evaluate its concrete effect on public finances and the overall economic policy.

Tax progression: how the New Popular Front aims to strengthen tax equality

The main objective of the New Popular Front in fiscal matters is to enhance tax equality and social justice through a profound reform of the system. This vision is based on the principle that every citizen should contribute according to their capacity, which requires increased progressivity in various taxes.

Its proposals emphasize two main balances:

• Combating inequalities by taxing higher incomes and assets more heavily
• Relieving the tax burden on the working and middle classes

This approach includes the removal or significant modulation of mechanisms perceived as ineffective or unfair, such as the flat tax on capital income, introduced in 2018 at 30% (social contributions included). The project involves returning to a system where savings income is taxed according to the progressive income tax scale.

Specifically, this means that income from financial investments — dividends, interest, capital gains — will be calculated as ordinary income and taxed according to different brackets, potentially leading to higher taxation for wealthier taxpayers, while benefiting from exemption or reduced rates for modest incomes.

• Abolition of the 30% flat tax on savings income
• Inclusion of financial income in the progressive income tax scale
• Increase in overall fiscal progressivity
• Targeted exemptions for small savers
• Strengthening of tax equality

These measures represent a radical change in how resources are collected and redistributed, aiming for a more equitable society. This raises questions about effects on investment, especially in insurance and savings products, which currently benefit from favorable tax regimes. For more information on the taxation of life insurance, you can consult this relevant link: taxation of life insurance.

Current tax	Method	NFP proposal	Expected impact
Flat tax of 30%	Uniform taxing on capital income	Incorporation into the progressive scale	Greater progressivity and tax justice
Partial exemption for low incomes	Limited	Maintenance and expansion of exemption	Protection for small savers
5 income tax brackets	Simple scale	More detailed 14 brackets	Reduced threshold effect, better adaptation

Return of the Wealth Solidarity Tax (ISF): issues and perspectives

Another key aspect of the fiscal reform envisioned by the New Popular Front is the reinstatement of a strengthened wealth solidarity tax, commonly called ISF. Abolished in 2018 and replaced by the real estate wealth tax (IFI), this reform aims to reintegrate financial assets and certain luxury possessions into the tax base that had been excluded.

The return of the ISF reflects a declared intention to target patrimonial inequalities, as the partial abolition of this tax had reduced the fiscal contribution of the wealthiest, thus widening wealth gaps. The NFP aims to go further by creating new tax brackets graduated according to the overall value of assets.

• Reintegration of financial assets into the tax base
• Creation of new brackets to enhance progressivity
• Introduction of an ecological component, aiming to steer taxation towards sustainable assets
• Targeting the wealthiest taxpayers with marked redistributive effects

Beyond the fiscal goal, this reform fits into a broader economic vision where the ISF becomes a lever to encourage ecological transition through differentiated taxation of assets based on environmental impact. This raises questions about the specific modalities of this “greenification” of the ISF, whose details have not yet been announced but could play a strategic role in financing sustainable development projects.

The acceptance or rejection of the return of the ISF will send a strong signal of engagement in the fight against inequalities, though this topic sparks fierce debates, including within the National Assembly. The National Rally, having joined the debate with a similar stance, adds further complexity to parliamentary interactions.

Old ISF	Current ISF (IFI)	NFP project	Expected effects
Overall taxation of assets	Only real estate taxation	Reintegration of financial assets and luxury goods	Increased tax revenues and redistribution
Single rate	Simple real estate tax scale	Enhanced brackets with ecological component	Encouragement of ecological transition
Revenues provide economic stabilization	Reduction in public revenues	Rebalancing inequalities	Improved fiscal justice

Reform of the Generalized Social Contribution (CSG): a major step towards progressivity

The CSG, introduced in 1991, is today a social tax with various modalities depending on income but still largely proportional, especially on wages. The New Popular Front proposes to make it a truly progressive tax, complementing the reform of the income tax scale.

This demand is not new but now appears to be a priority in the NFP program. In practice, the CSG would increase progressively across several brackets, adapting to income levels, particularly for wages. This could lighten the tax burden for modest households while increasing it for high incomes outside assets.

• Transforming the linear CSG into a progressive tax
• Creating a multi-bracket scale (initially 14 brackets considered)
• Better coordination with income tax
• Reducing pressure on working and middle classes
• Raising the burden on high wages and financial incomes

The exact mechanism remains to be defined, including income thresholds and corresponding rates. Simulations, although dated, suggest a possible alignment with the income tax scale to simplify the tax structure while making it fairer.

These modifications could notably impact social contributions deducted from wages and pensions, requiring careful monitoring. To better understand the role and planned transformation of this tax, several resources detail the new rules currently in effect: inheritance taxes, modified CSG.

Current CSG	NFP proposal	Potential effect
9.2% on wages (linear)	Progressivity by brackets	Relief for low incomes, increase on high incomes
Partial progressivity on pensions	Extension of progressivity to all	Better targeting and fairness
No articulation with IR	Harmonization with IR scale	Simplification and increased transparency

Economic and redistributive consequences of proposed fiscal measures

The implementation of fiscal measures by the New Popular Front would have structural effects on the French economy and the redistribution system. By strengthening the progressivity of the income tax scale and the CSG, while restoring a more comprehensive ISF, the NFP seeks to increase public revenues to fund public services, reduce inequalities, and support social policies.

This fiscal strategy should have several consequences:

• Increase in fiscal revenues: Greater progressivity allows higher incomes to contribute more to the state budget.
• Improved redistribution: Increasing taxation on wealth and high incomes strengthens solidarity and social justice mechanisms.
• Effects on investment: Abolishing the flat tax could hinder capital investment, but the debate remains open on potential compensatory measures.
• Impact on consumption: Better redistribution could support overall household demand, especially among modest and middle incomes.
• Transformation of the fiscal structure: The reform reinforces the link between taxation and contributing ability, making the system more transparent and fairer.

Beyond these short-term effects, the reform could influence the economic climate in the medium and long term by shaping fiscal and savings behaviors. To better understand these dynamics, several useful resources on taxation and investments in France are available, such as this analysis of portfolio management alternatives.

Aspect	Pre-reform	Post-reform	Expected effects
Fiscal revenues	Stable but insufficient	Significant increase anticipated	Enhanced funding for public services
Inequalities	Persistent, significant	Expected reduction	Greater social justice
Investment	Encouraged via low flat tax	Potential slowdown due to higher taxes	Need for compensatory measures
Consumption	Uneven distribution	Increased purchasing power for middle classes	Economic stimulation

Upcoming parliamentary debates: obstacles and implementation strategies

Following the early legislative elections of 2024, the New Popular Front emerged as the leading force in a fragmented Assembly. Despite this relative victory, it holds a fragile majority within a chamber divided into several blocs, notably the right, center, and far-right around the National Rally.

In this context, continuing the ambitious fiscal program of the NFP faces several challenges:

• The need to negotiate with parliamentary groups holding diverging interests
• The limited tolerance of some elected officials for significant increases in taxes on the wealthy
• Concerns about the economic impact of certain measures, particularly on investment and growth
• The social and political communication of fiscal reforms

The LFI group and its allies will therefore need to develop legislative strategies to advance their measures, including the draft amended budget announced for early August, which should lay the groundwork for reforms of the CSG, income tax, and ISF. Note that some aspects of the program remain to be specified, particularly the precise brackets and thresholds.

Debates are expected to be intense, featuring discussions around the flat tax, the return of the ISF, and savings taxation, with arguments related both to economic effectiveness and social justice. Their impact on public finances and the sustainability of measures will be closely monitored by all stakeholders.

Budget 2025 : les 4 mesures fiscales qui vont faire tanguer l’Assemblée https://t.co/dQ6ZVTIjB0 – via Le Parisien

— Verier Vincent (@VincentVerier) October 21, 2024

Comparison with other political programs on taxation

The study of the fiscal measures of the New Popular Front invites a comparison with those of other French political forces to better understand major differences.

For example, some parties still advocate for the flat tax or a more limited taxation on assets, while others, like the National Rally, now support a return to the ISF, which complicates the landscape.

• Right and center parties: generally favoring moderate taxation, protecting incentives for investment and capital.
• National Rally: advocating for the return of the ISF, with a sovereigntist and protectionist orientation.
• Ecological and social parties: strongly supporting progressivity, green taxation, and social justice.

Within this framework, the NFP adopts a more radical approach concerning increased taxes on higher incomes and assets, aiming to offer an ecological and social alternative to previous economic policies. For a detailed analysis of the ideas debated by the NFP and their fiscal implications, you can consult this interesting article: NFP program overview.

In summary, the proposed measures of the NFP are part of a fundamental debate on the French economic and social model, reflecting a clear desire to reinforce redistribution through taxation.

Public finance outlook in the face of the new NFP measures

The entire suite of fiscal measures proposed by the New Popular Front will lead to significant changes in the dynamics of French public finances.

Revenues are expected to increase thanks to:

• A strengthened tax system on high incomes and assets
• More rigorous taxation of capital income according to the progressive scale
• Better progressivity of the CSG

These additional resources will be used to finance:

• Essential public services
• Social policies and ecological transition
• Fight against poverty and inequalities

However, budgetary balance remains delicate, especially considering potential risks of restraining private investment and political resistance. The net impact on growth will be a key factor to monitor in the coming months, as will the schedule of implementation and effective enforcement in the National Assembly.

The debates on the fiscal program and the amended budget scheduled for August 4, 2025, will be decisive for the economic outlook. The tight timetable and complexity of the issue require close vigilance.

Financial aspect	Pre-reform	Post-reform	Expected consequences
Fiscal revenues	Tense budget	Significant increase	Potential for increased public expenditure
Social expenditure	Growing pressure	Improved financing	Better support for vulnerable populations
Private investment	Relatively dynamic	Potential slowdown	Need for compensatory measures
Support for ecological transition	Moderate	Enhanced via ecological ISF	Sustainable positive effects

FAQ: essential questions about the tax scale, ISF, and CSG

• What is the proposed 14-bracket tax scale by the New Popular Front?
  It involves increasing the number of brackets in income tax to make the system more progressive, spreading out rates and potentially raising the maximum marginal rate.
• Why is the return of the ISF important for the NFP?
  To restore fiscal justice by including financial assets, which were excluded after transforming it into the IFI, and to introduce an ecological component into taxation.
• How will the CSG be modified?
  The CSG, currently proportional on wages, will become progressive through the introduction of brackets based on income levels.
• What is the expected date for these reforms to begin?
  A draft amended budget should be submitted around August 4, 2025, to initiate these changes.
• What impact on public finances?
  These reforms are expected to increase fiscal revenues to better fund public services and reduce inequalities, despite potential risks to investment.