L’Assemblée de Corse vote un impôt négatif sur le revenu et un revenu de base théorique

L’Assemblée de Corse vote un impôt négatif sur le revenu et un revenu de base théorique

Par Marc de Basquiat, 1er Mai 2020

Traduction par Christine Cayré

On peut lire l’article par Marc de Basquiat ici.

Le 30 Avril 2020, les six groupes politiques se sont réunis en vidéo conférence pour délibérer sur un rapport très attendu.  Depuis 2017, un comité ad hoc a étudié les avantages potentiels d’un Revenu de Base en Corse. Ce rapport a été présenté par Jean-Guy Talamoni, président de l’Assemblée de Corse, qui s’est pleinement impliqué dans le travail de préparation.

Le mécanisme proposé par ce rapport est inspiré de la proposition de Tony Atkinson « Impôt forfaitaire et revenu de base » *. Depuis 2019 l’administration fiscale française est en mesure de connaître le revenu mensuel de pratiquement tous les individus. A partir de ces données, un impôt mensuel est calculé sur la base d’une formule personnalisée. Pour la majorité des 20 % des revenus les plus élevés, le calcul de l’impôt suit une règle stricte : 30% du revenu moins 498.52 euros par personne (par conséquent 498.52 pour une personne seule et 997.04 pour un couple).

En fait, le montant octroyé aux personnes les plus désavantagées par la société – le Revenu de Solidarité Active – est quasiment équivalent : 497.01 pour une personne seule, souvent complété par l’allocation logement et l’allocation familiale. La proposition portée par l’assemblée de Corse consiste en un impôt négatif mensuel sur le revenu qui vise à rapprocher le calcul de l’impôt sur le revenu avec les allocations versées aux pauvres.

Chaque mois, l’administration fiscale calculerait la différence entre un revenu de base théorique  de 500 euros pour chaque adulte et 30% du revenu perçu lors du mois précédent. Ainsi toutes les personnes dont le salaire est inférieur à 1 667 euros recevraient 500 euros, moins le montant de l’impôt, via un virement sur leur compte bancaire. Ceux percevant des revenus supérieurs verseraient leur impôt défalqué du montant de 500 euros.

L’étape suivante consiste à obtenir le soutien du Ministère des Finances français pour déployer l’expérimentation du calcul mensuel des impôts en Corse.

Depuis de nombreuses années, des millions de touristes se rendent en Corse pour ses paysages singuliers, ses plages et ses montagnes, sa culture et son histoire. L’île de Napoléon Bonaparte continuera c’est certain d’accueillir des visiteurs et pourra peut-être aussi s’enorgueillir prochainement d’être une pionnière en Europe pour l’expérimentation du premier authentique impôt négatif entièrement financé associé à un revenu de base théorique.

Lire dans son intégralité la présentation des conclusions des travaux de la commission ad hoc relative à l’étude de la faisabilité d’un revenu de base et à la possibilité d’en expérimenter la mise en œuvre en Corse.

* A.B. Atkinson, Public Economics in Action: The Basic Income/Flat Tax Proposal, Oxford: Clarendon Press, 1995

Marc de Basquiat préside l’Association Française pour l’Instauration d’un Revenu d’Existence (AIRE) et il est membre à vie du BIEN.


On peut lire cet article en anglais ici

L’Assemblée de Corse vote un impôt négatif sur le revenu et un revenu de base théorique

The Corsica Assembly votes for a Negative Income Tax with a notional basic income

There is a translation of this article into French


On 30 April 2020, the six political groups met through video conference to deliberate on a long-awaited report. Since 2017, an ad hoc committee has been studying the possible advantages and conditions for a Basic Income in the island of Corsica. The report was proposed by Jean-Guy Talamoni, the chairman of the Assembly, who got deeply involved in the preparation work.

The mechanism proposed by the report is inspired by Tony Atkinson’s “basic income flat tax proposal”. * Since 2019 the French tax administration has been aware of almost all of the income of individuals on a monthly basis. Using this data, a monthly tax is computed using a personalized rate. For most of the top 20% of incomes, the tax calculation follows a strict formula: 30 % of the income less 498.52 euros per individual (thus 498.52 for a single person and 997.04 for a couple).

As a matter of fact, the amount granted to the least advantaged in the society – known as the RSA – is almost the same: 497.01 euros for a single person, often supplemented by housing and family benefits. The Corsican project proposal is for a monthly Negative Income Tax to bridge the income tax calculation and the allowance for the poor.

Each month the tax administration would compute the difference between a 500 euros notional ‘basic income’ for each adult and 30 % of the income earned during the past month. This way, all people with a monthly income below 1,667 euros will receive their 500 euros less the tax by automatic transfer to their bank account. Those with higher incomes will automatically be charged monthly by the tax less 500 euros.

The next step of the project is to gain support from the French ministry of Finance to implement an experimental monthly income tax calculation in Corsica.

For many decades, millions of tourists flew to Corsica because of its unique landscape, beaches, mountains, culture and history. The island of Napoleon Bonaparte will certainly continue to welcome visitors and maybe display in the near future the pride of experimenting with the first wholly financed genuine Negative Income Tax with a notional basic income in Europe.

A translation of the Corsican report is available here for international review and comments.

* A.B. Atkinson, Public Economics in Action: The Basic Income/Flat Tax Proposal, Oxford: Clarendon Press, 1995

Marc de Basquiat is Chair of the French Association pour l’Instauration d’un Revenu d’Existence (AIRE)


An article about the initiative can be found here.

Towards a Universal Basic Income in France: elements for a debate

Towards a Universal Basic Income in France: elements for a debate

Multiple surveys across many countries show an increasing support for the idea of providing every citizen with a monthly lump-sum allowance to ensure everyone can meet their basic subsistence needs. In France, the IFOP (a leading French national market research institute) has shown that this support goes beyond political orientation divisions. From the question: “Are you in favour of implementing a guaranteed basic income for all citizens which would replace most existing allowances?” came a positive answer, depending on the degree of support for one party or another, from 72% to 79% for left wing sympathizers and from 50% to 54% for right wing sympathizers.

However, what would an unconditional basic income in France look like in concrete terms?

 

The Finland experiment

Since the election in April of the Finnish pro-basic income coalition, the topic has given rise to renewed international interest. All started when the Prime Minister of Finland Juha Sipilä announced the launch of a series of pilots, the most important being a “universal basic income” [1], in order to reform the social security system in response to the evolution of the labour market. This will also allow the evaluation of how to reinforce autonomy and incentives to work, as well as reducing bureaucracy and the complexity inherent in accessing social assistance.

The lead role in this project has been given to professor Olli Kangas (KELA) who has outlined the following schedule[2]: preparation phase from December 5th, 2015 to November 15th, 2016; two-year experimentation starting in 2017; evaluation in 2019.

Olli Kangas explained that the work group will evaluate at least four options:

  1. a “full basic income” (~800 €) replacing almost all basic and insurance-based benefits;
  2. a “partial basic income” (~550 €) replacing all basic benefits but leaving intact almost all insurance-based benefits;
  3. a negative income tax in which benefits would phase out as people earn more money;
  4. miscellaneous other approaches including a universal income and additional components.

Everyone who has recognised the need for major reforms of our social protection mechanisms perceives the announcement of the Finish pilot as an opportunity. However, we need to give time to our Finnish friends for their project to mature.

 

Which options are possible in France?

The Association for the Introduction of an Existence Income (AIRE) has been working on these questions since 1989, gathering studies and proposals from numerous experts, philosophers, economists, sociologists, politicians, etc. The French Movement for a Basic Income (MFRB) created in 2013 involves activists from a wide variety of backgrounds, leading actions through the country and enriching proposals by bringing together citizen experiences from the grass-roots[3].

Despite apparent simplicity, an unconditional basic income would require a series of structural choices. Precise adjustment of the parameters would need to be made in order to ensure it performs optimally in terms of justice and efficiency. Considering the vast number of options, it would be fallacious to believe that there is an ideal solution. Actually several options that must be weighted by parliamentary and experts in order to create a consensus that is adapted to the reality of our country.

Our experience leads us to recommend a universal income that would vary based on the beneficiary’s age. In particular the case for children should be processed separately, which means organizing an in-depth discussion about the French family assistance policy. This means replacing all or part of the actual eight allowances[4] by a lump-sum for each child. A key stake is to eliminate the high variability of the State grants according to the child’s rank within the family, the matrimonial status of the parents or the parent’s income (knowing that a single child of a middle-income level couple currently receives a remarkably low grant). The potential variation of the universal income amount according to child age (3, 14, 18 year old thresholds) must also be further investigated.

Similarly a discussion is needed regarding senior citizens. The question of incentive to work disappears with the elderly, but the dependency issue arises. Do we need to define a higher amount above 65 years old? How should the matrimonial life conditions be integrated? The ASPA[5] level (800 € for a single person, 1242 € for a couple) gives an indication but not a clear answer on the solution to be implemented.

The coordination with housing allowances constitutes a third theme to be carefully analysed. Acknowledging the inflationary effect of housing allowances (APL) on the rental market price, some politicians and economists[6] are investigating the potential effects of merging the APL and the RSA[7]. As the AIRE association is attached to the Tinbergen rule[8], we are highly reluctant to support this proposal, but the underlying issues must nonetheless be addressed. In any case, it is important to revisit conditionality links between several allowances and the housing grant, in particular the existence of a problematic “housing lump-sum” component within the RSA.

The last framing issue is to define the scope of beneficiaries for a “universal income”. Despite this designation, it is necessary to limit eligibility to a national community. This needs to be defined in terms of residence and/or nationality, probably through continuity of the rules applying today for the RSA beneficiaries. However, this still creates a variety of fundamental questions, for example the potential right to the universal income for prisoners or asylum seekers (currently receiving the ATA[9]).

 

Three scenarios for a universal basic income for “active age” adults

Similarly to the Finnish approach, we identify three quite different scenarios to defining a universal basic income that would be paid to any adult in France.

  1. Baseline: extend the distribution of the “RSA single person allowance” to the whole country population (excluding the housing lump-sum component), being 470 € by month in 2016, financed by a flat tax system replacing several current basic social and family allowances as well as tax mechanisms.
  2. Maximised: distribute equally to the whole population the entirety of the social protection budget, including pensions and unemployment benefit. This would mean about 800 € by month.
  3. Dynamic: delete all employment incentives to companies and allowing a massive flexibility improvement in terms of minimum salary, in order to finance a basic income ranging between 500 € and 550 € by month. This would also replace a major part of the social and tax mechanisms but leave intact all insurance-based benefits.

The financial feasibility of scenario A is proven and it does not lead to a large upheaval of the redistribution operating in France. It allows a massive simplification of the social and tax systems, facilitating daily life of the population and reducing operational costs. This scenario, like the following ones, eliminates many inconsistences, iniquities and numerous more-or-less known perverse effects. However in term of micro-economic analysis, it does not imply a massive evolution neither by an income effect nor by a substitution effect, unlike the other scenarios.

Scenario B designates the losers: those who contributed all along their life for pensions and unemployment benefits and who would be left without those related benefits. Neither the AIRE nor the MFRB association support this scenario. Such an approach – if it proves to be meaningful – could be considered only through a very long migration phase from one system to another. This would need to be built cautiously, with the implication of the labour unions. Besides, the high level of the benefit leads to a high income effect, many people being possibly satisfied by this amount without seeking for a complementary paid activity. The substitution effect contributes on the same way, due to the high level of contribution necessary to finance it.

Scenario C is probably the most audacious challenge, by lightening massively legal constrains framing the labour market, leaving it up to individual and collective negotiations. Citizens with better secured economic status are then on a better position to decide whether to accept or not professional opportunity offers, or to create their own activity by minimising their personal and family risks. The micro-economic analysis is more ambiguous, the income effect being stronger than in scenario A and on the contrary the substitution effect encouraging the activity thanks to a higher flexibility of the labour market.

Of course, the consensus that will emerge from a parliamentary work gathering representatives of all parties and the support of experts from diverse fields could finally be a combination of those three scenarios with potential integration of others approaches. In any case, no option presented in this note should be excluded without in-depth investigation.

 

Special thanks to Xuan-Mai Kempf for translating the text from French.


ENDNOTES

[1] https://www.kela.fi/web/en/press-releases/-/asset_publisher/LgL2IQBbkg98/content/universal-basic-income-options-to-be-weighed?_101_INSTANCE_LgL2IQBbkg98_redirect=%2Fweb%2Fen%2Fpress-releases

[2] https://www.vox.com/2015/12/8/9872554/finland-basic-income-experiment

[3] Some discussion papers from the field can be tough however well documented. For instance, in order to rebel against the home control by the family assistance administration: https://www.lesenrages.antifa-net.fr/la-caf-contre-les-femmes/

[4] Family allowances, premium for age, family complement for 3 children, basic allowance for child under three, school yearly allowance, RSA increase for each child, income tax reduction according to the number of children, tax reduction for child schooling.

[5] Solidarity allowance for elderly persons.

[6] Cf. the « Unique social allowance » of François Fillon or the IPP report:    https://www.ipp.eu/publication/juin-2015-reformer-les-aides-personnelles-au-logement/

[7] RSA: Revenu de Solidarité Active, is the main French allowance providing a minimum guaranteed revenue.

[8] Based on the name of the first Nobel Prize for Economics winner, Jan Tinbergen, a supporter of an unconditional basic income, who stipulated that for each policy objective, one policy instrument is needed, and one only.

[9] Allocation Temporaire d’Attente.