Taxes: The reform of the 10% tax reduction for retirees will result in 1.4 million losers, according to the Institute for Public Policy.

Around one in twelve retirees will pay more income tax or receive fewer social benefits.

A quick reminder: in Prime Minister François Bayrou's draft bill, which is to be examined at the National Assembly at the start of the new school year, in addition to the pension freeze decided with the famous fiscal "blank year" , there is a modification of the 10% tax reduction that retirees benefit from in calculating their taxable income. The measure was introduced in 1978 to compensate for the professional expenses of retirees who still have a small job. Instead of this 10% reduction, the Minister of the Economy, Éric Lombard, announced a flat-rate tax reduction of €2,000 per retiree – €4,000 for a couple – so that they declare less income to the tax authorities.

According to the Institute for Public Policy (IPP), this formula for calculating taxable income would penalize nearly one and a half million people (1,400,000 to be precise). These people would pay more taxes or simply receive a lower pension. According to the Institute, replacing the 10% tax allowance with a flat rate of €2,000 would ultimately benefit only about 100,000 people, or less than 1% of all retirees. Retirees considered the wealthiest would be required to contribute, without necessarily significantly compensating those with the lowest incomes.

Does this mean that the government would gain from the change? Yes, obviously, since it would recover more money overall than it does today. The expected gain for the State would be one billion euros, proof that the reform proposed through the "blank year" in 2026 would ultimately result in a tax increase. And this only concerns retirees.

The Institute for Public Policy also points out that several points remain to be clarified, such as whether the method of calculating income entitling people to social benefits would also be changed. This includes solidarity allowances for the elderly, housing benefits, and so on. This could fuel lively debates in Parliament as soon as the new term begins.