how much less will you pay in 2023 thanks to the new rate?

The government unveiled the 2023 budget this Monday at the Council of Ministers. Among the measures to combat inflation is the indexation of the income tax scale. This measure will not directly lower your taxes, at least if your income does not increase as fast as prices. Does it really add up? How will it affect your finances? Examples and decryption.

But why new income tax rate? Because it is recalculated every year. Every year, when it comes time to present the finance bill, the government holds the forecast evolution of the consumer price index except for tobacco, in short, the annual inflation estimated by INSEE, to index its scale to the price increase. According to our information, the estimate used by Bercy is 5.4%.

The Minister of Economy and Finance Bruno Le Maire promised in early September of The echoes: The French will not pay more taxes because of inflation. His neighbor in Bercy, the Minister in charge of Public Accounts Gabriel Attal, confirmed it again in the press on September 26 after the presentation of the 2023 budget: More than 6 billion euros of income tax will be imposed on Frenchmen without us. take this step.

but how does revaluation lead to tax reduction? MoneyVox has released a calculator to help you understand … and anticipate your taxes in 2023.

What is the 2023 tax rate?

Here, according to our information, is the revalued scale for the 2023 tax, which is therefore related to the 2022 income.

Scale 2023 for income tax 2022
Income bracket per share of tax Applicable rate for tranche
Up to 10777 0%
From 10777 27478 11%
From 27478 78570 30%
From 78570 168994 41%
More than 168994 45%

Barme revalued based on annual inflation of 5.4%.
Provisional scale, subject to the adoption of the finance bill for 2023.

To compare, here is the current scale, the one used to calculate your withholding tax for the last few months, or to calculate the tax balance that DGFiP must collect this Monday from the accounts of 10.7 million households.

Scale 2022 for income tax for the year 2021
Income bracket per share of tax Applicable rate for tranche
Until 10225 0%
From 10225 26070 11%
From 26070 74545 30%
From 74545 160336 41%
More than 160336 45%

Barme appeared in the finance bill for 2022.

Without indexation, a person who works in Smic will return to income tax, while he does not pay it now.

The income thresholds of different tax brackets therefore increased by 5.4%, at the rate of inflation. A taxpayer whose annual net taxable income remains fig 10,500 euros in 2022 as in 2023 will theoretically go from taxable to non-taxable. (1). For someone who works on minimum wage, if we didn’t do thathe will return to the income tax, while he did not pay it now. He will pay about 130 euros, described by Gabriel Attal, of CNews. The minister gave another example: A single person earning 2,500 euros, whose salary has not increased, the increase in the scale amounts to a tax reduction of 328 euros for the whole year.

Income tax: what brackets apply to your salary and other resources?

How much will you earn thanks to this indexing scale?

First example: single, Yanis almost won 3000 euros per month, for 35,556 euros to be declared to the tax authorities per year, giving a net taxable income of 32,000 euros after a flat-rate allowance of 10% for professional expenses. Such income, above the French average, puts him in the 30% bracket: this means that he does not pay tax on 10,225 euros, that he is taxed at 11% on 15,845 euros and 30% on 5,930 euros: this is the principle of progressive bar. In 2022, Yanis paid 3522 euro income tax. In 2023, with the new bar, if this income does not change one iota, he will only pay 3194 euros. That is 328 euros less tax after the annual revaluation of the scale.

Second example: single, Latitia won 2000 euros per month, or 24,000 euros per year for 21,600 euros of net taxable income. In 2022 bar, he paid 1027 euros (2) per year, an amount that is clearly spread over months by withholding tax. He will pay 60euros less tax in 2023otherwise he will not receive the increase.

Third example with Carmen and Antoine, couple with two dependent childrenand just over 62,000 euros in annual resources (55,950 euros in net taxable income), which corresponds to approximately 2580euros monthly income each. Through the family quotient system, they die in the 11% bracket. In 2022, this couple paid 2780 euros (3) and will only have to pay 2,598 euros in 2023 if their income does not increase, according to the indexation of the bar. That is 182euros pay less.

Last example: Isabelle and Thierry no longer have dependent children and declare 100,000 euros of annual resources to the tax authorities, ie 90,000 euros in net taxable income after deduction for professional expenses. They are in the 30% bracket and pay a total of 14,844 euros in 2022 tax on their income in 2021. In 2023, after the indexation of the scale, if their resources do not change, they will pay 14,187 euros tax on their income for the year 2022. Or 657 euros less tax thanks to the indexation of the scale.

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Should we see this as a financial boost from the government?

No. This is the only traditional rule of annual revaluation of the income tax schedule according to inflation. The opposite, a freeze or a revaluation lower than inflation, can be a hard blow for households. The measure was thus frozen for two consecutive years in 2012 then 2013, decisions on the one hand by the Sarkozy-Fillon government then by the Hollande-Ayrault government, the latter compensated by strengthening in the discount that moderates the tax of the most modest. These freezes have one effect: a disguised tax increase.

In addition, the fact of stopping the scale of the fall, during the presentation of the financial bill, may have negative effects. So, last year, the 2022 budget increased the tax rate by 1.4% … while INSEE finally changed the increase in annual inflation observed in 2022 to 1.6%. An under-revaluation of the 2022 standard which is therefore (slightly) unfavorable to taxpayers.

What if your income also increased by 5.4%?

If your income increases at the same rate as inflation, and therefore at the same rate of scale, will everything disappear? Can you wait for constant taxes? Oh no! The progressive bar is not so simple … Illustration with Yanis, our first example. If he gets a 5.4% increase from January 2022, then he will declare 37,476 euros to the tax authorities in the spring of 2023, for 33,728 euros net taxable. He will have to pay 3,712 euros with the updated scale, or 190 euros more than he paid this year (on his 2021 income). Yanis can be all like rejoicing: in the event of a balance, his increase will cost him more, 4031 euros in taxes, or 509 euros more than this year.

You want it simulate your 2023 taxes yourself? A complicated exercise, because you must not forget to deduct any allowance for professional expenses, then apply the family quotient. The examples below are made using , and with the calculation principle outlined in this article dedicated to tax brackets for 2023 projections.

(1) Simplified example. In fact, a taxpayer with 10,500 euros net taxable per year (almost 12,000 of total net income, so 1,000 euros of net salary per month) is already tax-exempt due to the discount, a mechanism designed by reduce the tax to the most moderate.

(2) With this level of resources, Latitia is in the 11% bracket and benefits from a complex discount mechanism. This mechanism reduces his annual tax by 224 euros. To simplify, MoneyVox applies the same discount to the 2023 tax estimate.

(3) This couple theoretically benefits from the discount, but only slightly. In their case, MoneyVox did not apply the discount to simplify the matter.

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