Key Benefits:
FINANCING FOR 2013
Mr. President,
Ladies and Gentlemen Councilors,
We have the honour, pursuant to the provisions of Article 61, paragraph 2, of the Constitution, to refer to the Constitutional Council the draft financial law for 2013 adopted by the National Assembly on 20 December 2012, and in particular the provisions of Articles 3 to 10 and 36 bis, 56 and 64 bis.
This bill referred to the censorship of the Constitutional Council is contrary to the constitutional principles of French law.
In support of this referral, we develop the following grievances:
Article 3:
This system introduces an additional tranche to the IRB scale at a rate of 45% for the income fraction that exceeds EUR 150,000 per family quotient share. This measure has a double objective of strengthening the progressivity of the IRB scale, on the one hand, and of contributing to the recovery of public finances, on the other.
But its application to a particular category of income is contrary to the Constitution. Indeed, in application of theArticle L. 137-11-1 of the Social Security Code, annuities paid under the corporate pension plans, referred to as "head pensions", are also subject to a dependant contribution of the beneficiary whose rate is between 7% for the amounts between EUR 400 and EUR 600 per month, 14% for those between EUR 600 and EUR 24,000 and 21% for their amount beyond EUR 24,000 (total introduced by section 28 of Act No. 2011-1987 of 28 December 2011).
Decision No. 2011-180 QPC of 13 October 2011, based on the sampling established by theArticle L. 137-11-1 of the Social Security Codecertainly confirmed the validity of this contribution:
"Considering that, based on the amount of rents paid, the legislator has chosen an objective and rational criterion based on the objective of solidarity it seeks; that, to take into account the recipient's contributive faculties, it has provided for a mechanism of exemption and slaughter, instituted several slices and set a maximum rate of 14%; that, as a result, the contested provisions, whose threshold effects are not excessive, do not create a characterized rupture of equality before public charges"; but this decision, which only determines the rate of 14%, is preceded by section 28 of the above-mentioned Act, which introduced the additional slice at the rate of 21%.
However, it is the result of the combination of this additional 21% and the new marginal income tax bracket established by section 3 that the taxpayers who benefit from the affected annuities will now be taxed on a total of 77.1% (45% for the IRB + 21% for the specific pension contribution hat + 7.1% for social deductions + 4% of the outstanding contribution on high incomes).
These same annuities also support an additional 30% contribution to the employer or the paying agency when their annual amount exceeds 8 times the annual social security ceiling (or €296,000). The total taxation of income, at the expense of the company and the beneficiary, is therefore greater than the amount of income itself since it reaches 108 per cent.
However, the Constitutional Council has already had the opportunity to invalidate a much lower overall tax rate: according to the Supreme Court, a 50 per cent levy rate for revenues exceeding 2.5 times the SMIC, despite an increase of this ceiling by dependant, is indeed a rupture characterized by equality before public charges (decision n° 85-200 DC of 16 January 1986): "if the principle so stated (at that time)
This marked rupture in the principle of equality before public office should lead the Commission to review the conformity of the contribution established by the above-mentioned article L. 137-11-1. Indeed, the Constitutional Council considers that, once a legal provision amends, supplements or changes the scope of a legislative provision in force, the latter may again be subject to review by the Constitutional Judge. Decision No. 85-187 DC of 25 January 1985 states that "regularity under the Constitution of the terms of an promulgated law may be usefully challenged in the examination of legislative provisions that amend, supplement or affect its domain". This decision found a first application by Decision No. 99-410 DC of 15 March 1999 and a more recent application in Decision No. 2012-654 DC of 9 August 2012.
So is it of theArticle L. 137-11-1 of the Social Security Code which must now be declared contrary to the Constitution, by application of thearticle 83, 2°, 0 quater of the general tax code which applies to this section, in that it results in a confiscatory sampling rate, which is contrary to the respect of the taxpayers' contributive capacities and hence the principle of equality and the right to property. The contested article, which is not based on objective and rational criteria, does not thus take charge of all contributive faculties in the sense that the Constitutional Council hears (Decision 2000-437 DC of 19 December 2000) and must therefore lead to the unconstitutionality of this article.
Article 4:
1. Section 4 of the Financial Bill for 2013 aims to lower the family quotient ceiling from €2,336 to €2,000.
A ceiling was established in 1982 for the family quotient children but not for the marital quotient. This ceiling was limited to very high incomes, equivalent to more than EUR 150,000 for a couple with two children. It only affected 2.4% of taxpayers.
The ceiling was reduced by 33% in 1999 to 885 000 taxpayers, or 6% of tax homes. The reason for this decline was to provide a counterpart to the restoration of the universality of family allowances.
But, two years later, the Financial Law for 2001 marked the quotient ceiling for the benefit, according to the project rapporteur, of a million taxpayers. According to the finance minister of the time, Mr. Laurent Fabius, this increase was "work of tax justice". "The family quotient ceiling," he said on September 20, 2000, "will be adjusted so that allegiance benefits all families and is proportionate to the importance of their expenses."
To justify the decrease in the ceiling provided for in section 4 of the 2013 Finance Bill, the Government invokes the need to "strengthen the progressiveness of income tax and its redistributive nature, in a context of public finances."
883,000 tax homes will be affected by this provision. The expected tax return supplement of this measure is not affected by the increase or recovery of a family benefit or other family support.
2. The legislative instability in the family quotient ceiling is therefore a negligible number of tax homes.
It must be examined in the light of the constitutional principles governing the right to income tax, and in particular section 13 of the DDHC which states that: "For the maintenance of the public force, and for administrative expenses, a joint contribution is essential. It must also be distributed among all citizens because of their faculties. »
The progressiveness of income tax, i.e. an taxation whose rate progresses with the ease of taxpayers, is a general principle of tax law, as reflected in Constitutional Council Decisions No. 90-285 DC of 28 December 1990, No. 93-320 DC of 21 June 1993 and No. 97-388 DC of 20 March 1997.
It is justified by the fact that the marginal value of a taxpayer's income is all the lower as its income is higher, so that tax can take a growing percentage of that income.
In a progressive system, the legislator cannot disinterest the two elements that determine the contributory capacity of a debtor: the total income of his home and his family expenses.
Mr. Alfred Sauvy, in his reference book "Theory générale de la population" (PUF, 1955), made a perfectly explicit description of this logic when he wrote: "The progressiveness of the rate (tax) is justified because the superfluous can, by definition, be reduced in a greater proportion than the necessary... A single person who earns 150,000 F a year has a higher standard of living than a father of 4 children with the same income. Also imposing them would also strike the portion of pleasure of the first and the meat, or even the bread of the second. »
In this sense, the progressivity of rates according to the standard of living of each tax home is necessary for the correct application, for modern minds, of the principle of equality before the public charges laid down in article 13 of the DDHC, as reflected in the decisions of the aforementioned Constitutional Council.
This principle can be summed up by the formula: "at equal standard of living, equal tax rates". The standard of living depends not only on the income of the tax home, but also, and strongly, on the composition of this home according to the number and age of the individuals living there.
statisticians use consumption scales to calculate household living standards: each household composition corresponds to a number of consumer units. A household whose composition corresponds to three consumption units has a standard of living equal to that of another household corresponding to a single consumption unit if and only if it has a three times higher income.
The tax law, since 1945, has used a method of calculating income tax that corresponds to the calculations of the living standards established by the statisticians, the number of shares allocated to each tax home, depending on its composition, playing the role of consumer units.
For example, a tax home made up of a parental couple and two children is allocated 3 parts of a family quotient, i.e. 3 units of consumption. It is imposed at the same rate as another tax home, composed of a single person earning one-third of his income to whom a share of quotient is attributed. If, for example, the 2011 income of this couple is 45,000 €, its standard of living is the same as that of a single person whose income is 15,000 €: the first tax home pays 2 283 EUR tax, the second 761 €, which is three times less, but the tax rate of these two tax homes is the same (5.1%) because their contribution capacity is identical.
This formula, "at an equal standard of living, equal tax rates" thus meets in a simple manner and adapted to the requirements of section 13 of the DDHC. Statement of Reasons for the Financial Law for 1946 creating the articles 115 to 118 of the General Tax Code direct, articles 197 et seq. of the General Tax Code, the following explained: "Modifying the system, in order to better proportionate the tax to the contributive faculty of each taxpayer, these sections provide that, henceforth, the taxable income of each taxpayer will be divided into a number of shares fixed according to the family situation of the individual. Each share will, in principle, be taxed separately and the total of the taxes so determined will give the amount of the tax to be paid by the head of household. In this same sense of living standards appreciation, the quotient, and therefore the tax share system, is used to take into account certain expenses resulting from specific situations such as disability or monoparentity, charges that may decrease the standard of living and the capacity to contribute.
3. However, as early as 1946, the share system was also used to provide a particular benefit to a particular class of taxpayers that the legislator intended to promote. This is the half-part of veterans assigned to 688,000 taxpayers as a testimony to the recognition of the Republic. The same is true of the half-part that keeps isolated taxpayers who, in the past, have raised only children but no longer dependant on them, or 4.2 million beneficiaries.
This use of tax shares, unrelated to a comparison of living standards, has introduced the false idea that the family quotient would be a "help to the family". The legislator even came to use the term "benefit provided by the family quotient" or "tax reduction", which is even used to define the method of calculating the cap.
These expressions are only appropriate for assigned shares without the appreciation of living standards. In the absence of limiting its use, such expressions would have meaning only if it were estimated that equal-life couples with children should be imposed at a higher rate than single persons and couples without children.
Consider the effects of the family quotient as a "benefit" made to families is to reason as if the indifference of the tax to the contributive capacities of households was the principle, in other words, the standard governing the tax.
As soon as the real reason for being a family quotient is recognized, its cap appears to be an anomaly, as indicated by a note written by the Treasury Board for the High Council of the Family in 2011. It reads: "In a strict reading of the principles of the family quotient, the cap is difficult to justify. »
Placing the family quotient is to stop taking into consideration the presence of children in the tax home from a certain level of life per share. Its only justification could be based on a deformation of the standard of living scales based on income, if it proved that in a household the number of consumer units attributable to a child decreases if this household is easy rather than medium or modest. But the few studies available (Wittwer 1993, Guards 1999) instead set the opposite. In addition, it is difficult to justify that the quotient is capped for shares related to children and not for that of the spouse who can, like the child, have no own income.
4. As Jean-Marcel Jeanneney wrote in the World of October 9, 1997: "The family quotient system applied to progressive income tax has been altered by capturing its effects. It can be accepted when the family income is extremely high, but only in this case, otherwise the logic of this tax is ignored." This reflection was relevant when, as in 1982, the cap was only 200,000 taxpayers.
For small-scale contributions, the Constitutional Council found, in fact, that the failure to take into account the contributive powers of debtors did not result in a marked breakdown of equality before public charges (see Decision No. 93-320 DC of 21 June 1993 referred to above on the right of stamp on stock exchange transactions and Decision No. 99-424 DC of 29 December 1999 on the imposition of termination benefits).
However, since the cap of the family quotient has taken the importance that has just been described and the reform provided for in Article 4 of the 2013 Finance Bill will affect more than 800,000 tax homes, it is imperative that the fundamental principle of equality be respected before the public charges laid down in Article 13 of the DDHC.
This text does not simply set the principle of adapting the common contribution to taxpayer faculties. It states that the contribution must be "also distributed." But the cap introduces a breakdown of equality characterized between tax homes with the same standard of living, so the same contributive capacity per share.
Section 4 leads, in the first place, to a breach of equality characterized between taxpayers without children and those who have children. For example, with an income per share of EUR 25,000, a single or a couple without children will be subject to a tax rate of 8.6% while a couple with two dependent children will have a rate of 9.8%.
Secondly, family quotient cap leads to a breakdown of equality between taxpayers with children, according to the number of children attached to the tax home. The table below, based on the terms and coefficients contained in the 2013 Finance Bill, clearly illustrates it.
| 16 000 EUR | 5.6% | 5.6% | 5.6% | 5.6% | 5.6% | 5.6% | 5.6% |
| 20 000 EUR | 7.3% | 7.3% | 7.3% | 7.3% | 7.3% | 7.3% | 7.3% |
| 22 000 EUR | 7.9 per cent | 7.9 per cent | 7.9 per cent | 7.9 per cent | 8.3% | 9.0 per cent | 9.4% |
| 23 000 EUR | 8.2% | 8.2% | 8.2% | 8.2% | 9.2% | 9.9% | 10.3% |
| 23 400 EUR | 8.3% | 8.3% | 8.3% | 8.4% | 9.7% | 10.2% | 10.7% |
| 24 000 EUR | 8.4% | 8.4% | 8.4% | 9.0 per cent | 10.1% | 10.7% | 11.2% |
| 25 000 EUR | 8.6 per cent | 8.6 per cent | 9.0 per cent | 9.8% | 10.9 per cent | 11.5 per cent | 11.9% |
| 26 000 EUR | 8.8% | 8.8% | 9.8% | 10.6% | 11.6% | 12.2% | 13.6 per cent |
| 28 000 EUR | 10.1% | 10.1% | 11.2% | 12.0 per cent | 12.9 per cent | 13.5 per cent | 15.6 per cent |
| 32 000 EUR | 12.6% | 12.6% | 13.6 per cent | 14.2% | 15.1% | 16.8 per cent | 18.8% |
| 36 000 EUR | 14.5 per cent | 14.5 per cent | 15.4% | 16.0 per cent | 16.7 per cent | 19.5 per cent | 21.2% |
Your decision No. 98-404 DC of 18 December 1998 marks a significant tightening of constitutional jurisprudence as a "sufficient" general interest is now required to justify the retroactivity of a tax law. Thus, to assess the constitutionality of a retroactive tax law, the Constitutional Council appreciates the proportionality between the ground of public interest and the security of taxpayer situations.
« 5. Considering that the principle of non-retroactivity of laws is constitutional, under Article 8 of the Declaration of Human and Citizen Rights, only in repressive matters; that, however, if the legislator has the power to adopt retroactive tax provisions, it can only do so in the light of a sufficient general interest and subject to not depriving legal guarantees of constitutional requirements;
« 6. Considering that the criticized provision would increase, for a significant number of companies, a contribution that was due only in fiscal year 1995 and was recovered in fiscal year 1996;
« 7. Considering that the concern to prevent the financial consequences of a court decision censoring the method of calculating the contribution in question did not constitute a sufficient general interest in retroactively modifying the plate, rate and method of payment of an taxation, while it was exceptional in nature, that it was recovered for two years and that it is lawful for the legislator to take non-retroactive measures; that, therefore, and without the need to rule on other grievances, section 10 must be declared contrary to the Constitution. »
Your Commission therefore accepts measures that include a "small retroactivity", i.e., a change in the tax system for transactions already carried out but have not yet been subject to tax, provided that there is a proportionality link between the intensity of retroactivity and the eminence of the intended purpose.
Finally, the Commission and the courts verify that this retroactivity does not affect the principle of legal security and legitimate confidence by questioning the rights that taxpayers could, under positive law, consider as acquired.
In its decision of 9 May 2012, on the basis of Article 1 of the European Convention for the Protection of Human Rights, the Council of State therefore considered that a company is founded to claim the benefit of a tax credit retroactively deleted as long as:
― in the course of its creation, the benefit of the tax credit was fixed for three years and that it is legitimately entitled "to hope for its application over the entire period provided, contrary to other tax measures adopted without duration";
―on the date of the transaction entitled to the tax credit, there was no basis for considering a questioning of the tax credit system (no government statement or parliamentary report by recommending the deletion).
But before it is necessary to question the respect for the conditions under which the "small retroactivity" is constitutional, it would still be necessary to be in the presence of a "small retroactivity" as your case law requires. Are we really considering the irrevocable nature of the taxpayer's choice for the levy recognized by the State Council?
The Council of State has indeed been seized of a QPC relating to the liberatory lump sum removal of thearticle 117 quater of the general tax code and the irrevocable nature of his choice.
In particular, the Council of State validated the irrevocable nature of the option for taxation on flat-rate levies in view of the nature of sampling at the source of this levy.
« Considering, first of all, that the provisions of Article 117 quater of the CGI allow taxpayers to opt for the taxation of movable capital income at a flat rate equal to 18 per cent for the year 2008, free of income tax; that, if the option for this free-rate lump sum deduction may, in some cases, lead the taxpayer to bear in respect of the revenues concerned a higher tax than that which would have resulted from the application of the progressive income tax scale, the difference in treatment resulting from it is solely from the choice made by the taxpayer himself between the two tax terms offered to him; that, if the provisions of section 117 quater specify that the option for the lump sum deduction is irrevocable for the rebate to which it applies, that rule, which does not preclude that the taxpayer opts for the progressive debit of income of the same kind collected in the same year, is not, by itself, of a nature to create an irrelevant debit of nature; that, thereafter, provisions of Article 117 quater of the CGI do not ignore the principle of equality before public office. There is no reason to refer to the Constitutional Council the priority issue of constitutionality invoked (QPC State Council of 28 March 2012 No. 356227, 9th and 10th sub-sections. )
Thus, as long as the taxpayer opts for the deduction, the taxpayer chooses to be the subject of a debit to the source that, under section 117 quater, "releases the income to which it applies from the income tax".
This is no longer a "small retroactivity" that applies to income tax until now, but to a real retroactivity that applies to a debit to the source whose generator that is the encumberment of income is before the law.
Thus, by providing that the income corresponding to the dividends and interests of the whole of 2012, regardless of the date on which these revenues were collected, will be subject to the scale retroactively, section 5 of the PLF is not in accordance with the principle of "small retroactivity" since the income for which the taxpayer opted for the liberatory levy was, by the law in force at that option, permanently out of taxes
The retroactive removal of a levy clearly indicated in the law that it is releasing income tax is an infringement of the above-mentioned principles and there is no reason for sufficient general interest in justifying such a questioning of an acquired situation.
The application of section 5 of the deferred law that transforms a debit into a deposit constitutes an infringement of property within the meaning of section 1 of the ECHR. It thus infringes on the right of ownership as protected by articles 2 and 17 of the 1789 Declaration and the freedom to undertake that stems from article 4 of the Constitution. It is therefore necessary to censor him.
Articles 5, 6 and 7:
Heritage and investment revenues are subject to a CSG rate of 8.2% higher than that applicable to business income (7.5%). To take into account this differential level of taxation, the share of CSG deductible from the revenues of heritage (5.8%) was, so far, greater than that likely to be deducted from the revenues of activity (5.1%).
1. By standardizing the deductible CSG rate to 5.1 per cent, the 2° of the G of Article 5 creates a breakdown of income in respect of the same taxation, i.e. income tax.
Indeed, it is possible to have different CSG rates per income category, but this tax difference must be "neutralized" in an identical way with respect to income tax.
However, the 2° of the G of Article 5 creates a differential treatment that is not justified as long as all revenues (except real estate surpluses) are now imposed on the progressive income tax scale.
In considering 31 of your decision No. 97-395 DC of 30 December 1997, your Commission noted that the measure of the 1998 financial bill that increased the deductible CSG for capital income and business income "is neither for the purpose nor for the effect of treating incomes and revenues of heritage differently from other incomes in relation to the deductibility of the generalized social contribution; that, as a whole, these revenues and revenues benefit from this deductibility as long as they are subject to the progressive scale of income tax."
Conversely, with section 5 of the 2013 PLF, revenues subject to the CSG at different rates benefit from the same deductibility rate and are therefore not treated in the same way. Therefore, it is not possible to exonerate itself from the unconstitutionality resulting from this difference of treatment by considering, like the minister in session on December 13, that other taxations specifically affect the only revenues of capital, so that there is already a difference of treatment with regard to deductibility.
In fact, the legislator can very well decide to choose which tax it makes deductible from income tax, and it can very well not make deductible from income tax a tax that weighs on the same income category as another tax, with respect to the purpose of each tax; but when the legislator has decided to deduct a tax (the CSG) from another (the IRB), it must do so in a manner that equalizes with the IRB all revenues submitted to the CSG, and thus compensates the IRB for a possible difference in rates to the CSG; Otherwise, what is the case in section 5 of the 2013 PLF, the IR is more progressive in terms of capital revenues that have been taxed more strongly to the CSG than business revenues.
Since the non-deductible CSG rate is no longer the same for all incomes, some incomes (those of capital), which are more taxed to the CSG, are incorporated into the IRB's base in a greater proportion than the revenues of activity, and therefore suffer in a greater proportion the progressiveness of the income tax scale that aggregated and indifferent to all revenues; the contributory capacities of taxpayers are therefore not valued in a fair way, but with a breakdown of income categories.
2. On the other hand, the applicants consider that the breach of equality is related to the differential of CSG rates and social levies applicable to heritage and investment income, on the one hand (15.5 per cent), and to activity income, on the other hand (8 per cent).
The appellants also submit that there is a difference of base, with income taxed for 98.25 per cent of the amount and the surplus-values, dividends and interest for the total amount of the amount.
For these two reasons, sections 5 and 6, which aim to align the taxation of capital with that of work, induce a break of equality with regard to social levies so that, in fine, the law goes beyond the objective sought.
Indeed, the objective is to align the tax level of capital revenues with that of work. However, the sum of tax and social levies on capital revenues leads to an overtax of these revenues. The comparison ― on the basis of marginal rates ― gives the following results [1]:
salary and wages: 57.85 per cent (45 per cent + 4 per cent + 8.85 per cent)
― capital gains: 64.5% [2] (45% + 4% + 15.5%)
interest: 64.5 per cent (45 per cent + 4 per cent + 15.5 per cent)
– real estate surplus-values: 34.5% (19% + 15.5%) or even exoneration (main residence, detention ≥ 30 years, certain cases of employment).
Article 6:
Section 6 provides for the taxation on the income tax scale of the transfer earnings of securities and personal social rights.
1. However, a surplus-value is not a regular income, but the result of an assignment that results in a decrease in the capital available to the taxpayer; There is therefore a difference in the situation between the current income of capital, which can be imposed on the scale such as the current revenue of activity, and the exceptional revenues of capital, released on the occasion of an assignment of corporate securities, for example.
By deleting a separate form of taxation today between these two income categories, the legislator creates a breach of equality by failing to take into account the contributory capacities of taxpayers; the exceptional character of the realization of a surplus-value is therefore not specifically understood, while the General Tax Code provides specific modalities for taxing exceptional revenues.
2. On the other hand, the appellants argue that by bringing the rate of the liberatory (optional) lump-sum withdrawal from 19% to 24% transformed into a deposit that has become mandatory for the asset transfer in 2012, this provision does not fall within the scope of your Commission's "little retroactivity". Indeed, even if it is a flat rate, its a posteriori increase creates a difficulty as the surplus value is generally no longer available to pay the tax supplement as it is frequently re-employed and reinvested immediately after the date of assignment.
The appellants also argue that the intelligibility of the terms of application of the transformation of the current liberatory (optional) levy into a deposit that becomes obligatory is also undermined by the Minister's statements which, at the second sitting of Friday, October 19, 2012, had ceased to mention the "liberatory" character of the lump sum (2).
3. Finally, this article nevertheless sets out a number of exemptions to this rule, providing for the application of a liberatory levy at the rate of 19% excluding social levies, subject to the satisfaction of a high number of cumulative conditions. It is also the extreme complexity of this conditionality mechanism that the applicants denounce.
In particular, in the case of the sale of securities of a corporation that has undergone a restructuring (fusion, splitting, partial inflow of assets, inflow or acquisition of a business fund...), the taxpayer is unable to determine whether the conditions for the exercise of a business activity in the corporation for at least ten years or that of holding securities for five years are met.
Beyond this particular situation, this section provides, in order to benefit from the derogation from the common law, 9 different taxation assumptions of the surplus-values of shares, of which 7 relate only to contractors, not to mention a few additional variants derived from previously existing particular devices. This creates gross inequalities between shareholders, which are not based on both objective and rational criteria, as well as stiffness without any economic justification:
- it excludes shareholder employees from measures presented as favourable;
―it creates a difference in tax treatment based on thresholds or lengths of detention, situations or links between the contractor and its co-financers, creating a true inequity between investors;
―it excludes without any justification the financial and real estate sectors.
The appellants argue the extreme intelligibility of this article as well as its profound singularity with regard to the existing law among our European partners. This is illustrated in the following diagram:
You can consult the table in the
JOn° 304 of 30/12/2012 text number 5
Article 7:
Section 7 of the Financial Bill for 2013 is intended to reform the tax system of gains related to the lifting of subscription or stock purchase options (hereinafter referred to as stock-option gains, codified to Articles L. 225-177 et seq. of the Commercial Code) and acquisition gains related to free shares (codified under sections L. 225-197-1 to L. 225-197-3 of the same code). It follows, like sections 5 and 6, in the transposition of the electoral promise to treat incomes of property as incomes of work, by taxing to the progressive income tax scale (IR) "the earnings of a paid nature in respect of employee share ownership" (3).
However, the terms and conditions implemented do not allow for this objective to be achieved and thus create discrimination between immediately received remuneration and deferred and random remuneration, contrary to the constitutional principle of equality of citizens before public office. In addition, the overall levy supported by these gains impedes freedom and undermines the right to property.
In the current law, the gains related to these instruments are subject to specific adjustments to the tax plan – notably through flat rates ― and social to take into account, on the one hand, the fact that these devices are intended to cement employees (which implies a perception shifted over time) and, on the other hand, that gain is random, being likely in some cases to never materialize. For the future (4), lump-sum tax rates are abolished: gains will now be subject to the progressive income tax scale, the high income contribution of 3% or 4%, the CSG-CRDS at the rate of 8% and the specific social contribution of theArticle L. 137-14 of the Social Security Code ― substantially revised by this section 7 ―at the rate of 17.5 per cent or 22.5 per cent depending on the period in which the gains are made. This will result in a total sampling rate of 74.5% or 79.5%.
A brief reminder of the mechanism for achieving these gains and the needs they meet. These plans are based on the expectation of the gain associated with the valuation of the company in the event of the success of the joint project. This hope of gain includes in itself an alea since it is likely to never be realized by those to whom it was promised. In their own philosophy, these devices allow a sharing of the value of the company between the shareholders, who consent to an effort by diluting their participation in social capital, and the employees of the company. They also allow companies, especially those recently formed and not with sufficient cash to pay their employees at the desired levels, to offer them the hope of a future gain in the event of success, without affecting the cash of the company immediately.
In the case of stock purchase or subscription options, the company allows its employees or leaders to subscribe or buy shares at a future date at a specified value on the date of the award. If, at the end of a period of unavailability, the price of the action is greater than the value of the action at the date the option was awarded, the recipient earns equal to that difference. If, in the meantime, the value of the action has not increased, and many are examples in this matter, the recipient does not withdraw any gain. Companies also frequently condition the exercise of options to achieve performance conditions to be met over a period of several consecutive years, which further reinforces the aisle.
In accordance with the provisions of Trade code, equity companies may also carry out free shares for the benefit of all or part of their staff. These responsibilities, also known as performance actions when companies condition the benefit to the achievement of specific performance, also allow employees to be associated with the success of the company.
The new tax system takes constitutional criticism to the extent that, contrary to its stated objective of aligning the taxation of capital with that of work, it generates a break in equality between the different revenues for taxpayers with the same contributive capacity, which is not justified by any reason of general interest.
While the new provisions of General tax code (articles 80 bis and 80 quaterdecies) now have that the gains related to stock-option plans and the benefits corresponding to the value of the free-of-charge shares are "imposed in the category of wages and salaries", the comparison of the overall levy on the beneficiaries of these plans with those affecting salary and wages shows that the objective of equal treatment of these gains with pay is not achieved.
In fact, the social levies supported by the beneficiaries of the plans awarded after September 28, 2012 will always be higher than those earning in the event of an immediate gain: the gains from the stock options will bear a levy of 22.5 per cent to compare to a rate between 19.3 per cent for wages below an annual social security ceiling (SSA), 18.95% for salaries below 4 SSPs, For salaries exceeding 8 PASS, the sampling distance (+ 13.65 points for a deferred and random gain) is therefore considerable.
Social levies applicable to acquisition gains will remain higher than those applicable to wages greater than 4 PASS where the employee has met a four-year period from the date of the plan: in other words, the employee who has waited four years to receive uncertain income will necessarily be paid more than the employee who has immediately received an equivalent amount in cash.
The breakdown of equality is also evident in the nature of the levies borne by the beneficiaries: whereas in the case of remuneration the social contributions are entitled to considerations (including compensation for unemployment and pension benefits), the specific social contribution of theArticle L. 137-14 of the Social Security Code does not give rise to any consideration. The other major difference that affects the net amount of the taxpayer's claim is the deductible nature of social contributions, which is not applicable to the contribution of section L. 137-14 above. The beneficiaries of a free stock-options or shares plan will therefore be taxed on the entire gain, even though it will only have received 82.5 per cent or 77,5 per cent.
The measure mentioned here, taking into account the sampling rates it entails (between 74.5% and 79.5%), also affects the principle guaranteed by Article 17 of the DDHC which states that: "The property being an inviolable and sacred right, no one can be deprived of it, except when public necessity, legally recognized, obviously requires it, and under the condition of a fair and prior compensation". Moreover, this deprivation does not find justification in a compelling cause of general interest.
The tax created results in a deprivation of more than three quarters of a taxpayer's business income: in the past, the Constitutional Council has declared a contribution of a much lower rate to the Constitution, since it was 50%, in the case of income of activity collected in addition to supplementary pension plans (5).
This infringement of the right of ownership is also not justified by a sufficient general reason of interest, possibly capable of validating the conformity of the measure to the Constitution. In particular, there is no condemnable behaviour that could justify the implementation of a sanction. In any case, if this should be the case, the sanction chosen would in itself be contrary to the constitutional principles as long as it is not individualized.
Article 8:
Article 8 aims to meet one of the emblematic commitments of the 2012 election campaign: establish a marginal tax rate to 75% for the share of income that exceeds €1,000.
The section does not expressly provide for the establishment of an additional portion of the scale, which would obviously be confiscatory, but aims to establish an additional exceptional contribution that is in fact as much: "added to the marginal income tax rate provided for in this Finance Bill (45%), to the exceptional contribution on high incomes (4%) and to social levies (8% on business income), a rate of 18% Considered up to the statement of grounds as a scale, this mechanism is an additional contribution, which, in turn, constitutes income of professional activity, is, however, partially, that of income tax, but whose taxation terms are different. Nor can the additional contribution to the FSI be separated, in the analysis of its constitutionality, from the main taxation to which it refers (Decision No. 2012-645 DC of August 9, 2012), this income contribution cannot be separated from the income tax itself, as evidenced by its justification, the statement of the reasons for the bill, and the fact that its expected product is in the income tax income not shown in the income tax on the basis of
It is the result of the tax rate applicable to revenues within its scope that the measure is contrary to the ownership right. In light of its terms and conditions of application, it also ignores the principle of equality before tax and the need and universality of tax. Finally, it contravenes the principle of annuality of tax.
1. The measure infringes the right of ownership.
Article 17 of the DDHC states that: "The property being an inviolable and sacred right, no one may be deprived of it, except when the public necessity, legally recognized, requires it, of course, and under the condition of a fair and prior compensation. »
However, the measure referred to here (a) deprives the taxpayer of its property in view of the sampling rates it entails, (b) that deprivation is not otherwise justified in a compelling cause of general interest.
(a) The measure results in a minimum tax rate of 75% for the targeted revenues (an 18% contribution to which the IRPP must be added 45%, the contribution on high incomes 4%, social levies 8%). This tax rate may even exceed 75% in certain situations: the acquisition of stock-options from plans prior to October 16, 2007 is subject to an overall tax of 78.5%.
The tax created thus results in a deprivation of three quarters of a taxpayer's business income for the portion of its income exceeding 1 million euros; what must be considered as a confiscatory in respect of the taxpayer's portion of income: the Commission therefore declared unconstitutional a contribution of a much lower rate, since it was 50%, in the case of activity revenues collected in addition to the supplementary pension plans (7).
In addition, this deprivation presents a retroactive character for income received in 2012, and will therefore be cases in which the income to which this tax applies has already been reinvested. The payment of the 18% contribution will then require the transfer of the property: the tax law makes it necessary for the taxpayer to dispossess and thus undermines the abuse, an essential and non-divisible component of the property right.
In this regard, the fate reserved by the text to the acquisition gains of stock-options deserves especially to be emphasized. In this situation, the taxation is generated by the decision to assign the shares that freeze the taxpayer's heritage situation on the date of the assignment in view of a specified tax debt. Cumulative retroactivity with the excessive character of the measure jeopardizes this heritage situation and infringes the property rights (8).
(b) This infringement of the right of ownership is, in addition, not correlated with a compelling reason of general interest that can validate the conformity of the measure to the Constitution:
– there is no condemnable behavior. In any case, if this was to be the case, the sanction chosen would in itself be contrary to the constitutional principles as long as it is not individualized and is retroactive;
– the low fiscal performance of the measure, the small number of taxpayers involved and the nature of the revenues it relates to demonstrate that it cannot be justified by national solidarity;
― the invocation of "morality", of which no definition is otherwise given, cannot be an acceptable justification for the violation of a constitutional principle;
―the general rapporteur of the budget in the National Assembly himself recognized that the objective pursued by this contribution was "confisatory limit" (9).
2. The measure infringes the principle of equality before the tax.
This additional contribution that "will result in this overall tax at the rate of 75%" does not take into account the taxpayer's family expenses, while the rest of the income tax system takes it into account, in accordance with the taxpayer's family charges.Article 193 of the General Tax Code. It applies only to individuals, whereas income taxation is common to the couple or persons bound by a CAPS (Article 6 of the General Tax Code) and takes into account dependent children (Article 194 of the same code).
In fact, the mechanism involves a breach of equality due to (a) the absence of familyization, (b) any capped or depreciation mechanism and (c) the difference in treatment based on the nature of the income received. This breach of equality is even more evident in the acquisition gains of stock-options and performance shares (d).
(a) The determination of tax rules implies that the legislator "must base its assessment on objective and rational criteria according to the purposes it proposes" (Decision 2010-44 QPC, September 29, 2010), a difference in treatment must be in direct relation to the subject matter of the law that establishes it.
However, the application of the contribution varies according to the distribution of income between the members of the household and thus creates a breakdown of equality between households with the same income: a couple, subject to common taxation, of which one of the two spouses receives a remuneration of more than one million euros will be liable. Conversely, two married or pact people, whose sum of the accumulated individual incomes can be largely greater than one million euros, as long as neither of them reaches this threshold. These two couples are in a similar situation with respect to income tax, which is stated in common, and there is no justification that they are not in relation to the additional contribution to this tax. In vain would it be answered that the contribution is limited to individuals and must be analyzed independently of any other tax on income since it is an additional contribution to the tax on activity income: the same plate thus supports different tax rules. In vain would it be argued that this difference of treatment is in relation to the subject-matter of the law since, not taking into account the income of the couple but only of those of one of its members, the loss of income is manifest.
Recall that in its Decision No. 2000-437 DC of 19 December 2000 your Commission found that the degressive CSG dividend that was not valued by the home " does not take into account the income of the taxpayer other than those derived from an activity, or the income of other members of the home, or dependants within it; that the choice thus made by the legislator to not take into account the attribute of the powers concerned, However, Article 8 results in the same result: two households receiving the same income and supporting the same charges (so that the same contributory capacity as defined in Article 13 of the DDHC) could pay different amounts (e.g. spouse A1 100 000 EUR, spouse B2 0 EUR, tax of the couple on total incomes of 1 100 000 EUR, spouse A 500 000 EUR, spouse B 600 000 EUR global, no taxation of the couple).
IFS is also appreciated by home; only the CSG is not, but as it is a proportional tax without a threshold, regardless of the distribution of income within the couple, the overall tax is the same. As a result, the 18% contribution being progressive as a result of the threshold of EUR 1,000 000, it results in a breach of equality between taxpayers with the same contributory capacity.
(b) Assuming that the contribution is considered in isolation from the rest of the income tax, it would in any case be necessary to justify the absence of the application of the family quotient, which is in accordance with the Commission's jurisprudence (Decision No. 2010-44 QPC of 29 September 2010) a "contributory capacity integration modality". Similarly, administrative jurisprudence requires that it be taken into account "in an effective manner of family charges in the assessment of resources" (in this case for the right to legal aid: EC 26 September 2005, No. 257413). The absence of consideration of family expenses in respect of the only contribution is also a breach of equality between taxpayers in an identical situation: family expenses do not differ according to income amounts, and, if their consideration can be capped, it is not possible to take this into account for a particular tax on income, without appropriate justification.
The Commission always requires the existence of clauses of exemption or discount to ensure the progressiveness of each taxation. This is the case, for example, with regard to the removal of hat pensions in Decision No. 2011-180 QPC of 13 October 2011, where the absence of familyization was also in question: "Considering the levy on the amount of rents paid, the legislator has chosen an objective and rational criterion according to the objective of solidarity it aims at; that, to take into account the recipient's contributive faculties, it has provided for a mechanism of exemption and slaughter, instituted several slices and set a maximum rate of 14%; that, as a result, the contested provisions, whose threshold effects are not excessive, do not create a marked rupture of equality before public charges. »
It is important to recognize that the 18% contribution does not include family quotient, slices, exoneration, or abatement, only with a rate applied to a income threshold. The effective modalities for integrating contributive capacities are therefore the result of the cumulative tax on income, which is a component. Otherwise, the threshold effect ignores the principle of equality: how does a threshold of one million euros of income determine a "objective and rational" criterion to create a specific tax?
The threshold of one million euros creates a break in equality between taxpayers subject to income tax. Accumulation of the levies, in spite of this "except" construction of the single contribution, remains confiscatory: a taxpayer is taken to 75% of the revenues it earns in what is in fact an additional tranche, since the contribution does not take into account any tax paid on the same amounts. In Decision No. 2005-530 DC of 29 December 2005, the Constitutional Council defined the limits that the Constitution imposes on any levy: "Whereas Article XIII of the Declaration of 1789 states: "For the maintenance of the public force, and for the administrative expenses, a common contribution is essential: it must also be distributed among all citizens, because of their faculties"; that this requirement would not be met if the tax had taken place The confiscatory character is thus one of the limits imposed on any taxation not only because it is contrary to the right of ownership but also because it creates a disparity of treatment between taxpayers when it applies only to some of them. A 50 per cent levy rate for revenues exceeding 2.5 times the SMIC, despite an increase in the ceiling per dependant, constitutes a breach characterized by equality before public expense (decision n° 85-200 DC of 16 January 1986): "If the principle so stated (at Article XIII of the Declaration) does not forbid the legislator to charge a certain socio-professional category or classes This decision, which deals with a 50 per cent levy, concerns a situation far less offensive to equality than that resulting from a marginal rate of activity income tax of 75%.
(c) The measure finally creates a breakdown of equality between taxpayers according to the nature of the revenues they perceive: only the revenue of activity is covered by the contribution. Thus, two taxpayers receiving the same amount of income would be taxed differently depending on the nature of these revenues: remuneration and income of professional activity would be subject to the contribution, the reverse of the dividends and in a general way to all income of the heritage, which are excluded from its scope of application.
(d) The breach of equality is even more evident with respect to the application of this tax to the lifting of options on the purchase of shares decided by employees by which the company has set up this free participation and shares.
Paragraph 9 of this section 8, which submits to the non-capped contribution the gains from the free stock options and shares derived from plans prior to October 16, 2007, results in a cumulative aberrant tax: by adding the income tax rates (41%), the contribution on high incomes (4%), the social levies (15.5%) and the exceptional contribution of this section, is thus obtained In itself this mechanism is not only confiscatory given the overall rate of levy that leaves the beneficiary 21.5 per cent of his income after sampling, but it also creates a break of equality depending on the nature of income (business income such as salary and wages or professional income would be taxed to 75 per cent, where the free stock-options or shares gains would be 78.5 per cent). The legislator expressly pointed out this difference of treatment (10) and did not justify it by any reason of general interest.
The inclusion in the tax field of 18% of the gains associated with plans issued prior to October 16, 2007 also results in a clear breach of public charges between the beneficiaries of these plans according to the date the plans were allocated. In fact, the gains associated with plans prior to October 16, 2007 and realized in 2012 and 2013 will be taxed at a maximum rate of 67.5 per cent for free shares and 78.5 per cent for stock options, where the gains made in 2012 and 2013 for plans awarded after that date will be subject to an imposition of 59.5 per cent for free-of-charge shares and 70.5 per cent for outstanding stock options, the applicable contribution will be subject to an imposition of 59.5 per cent for free-options This difference in treatment related to the date the plan was awarded to the employee is based on no objective or rational criteria. Section 8 therefore also imposes censorship on this point for a breach of equality before tax.
In addition, it institutes retroactive taxation. While the initial drafting of Article 7 to impose on the income tax scale the gains of lifting of stock-options and awarding of free shares were arranged by the National Assembly in order to avoid an application has past facts and to guarantee the legal security of the device (11), Article 8 maintains in its scope the gains made by the recipients of prior free stock plans.
The non-retroactivity of Article 7 is, however, questioned by Article 8. Indeed, this article extends the application of the 18% contribution to the free stock-options and shares not subject to the pay contribution of 10%, i.e., to the earnings from plans prior to October 16, 2007: these gains are assimilated to remuneration, even though they have the legal nature of a surplus-value. As a result, the Act has unconstitutional retroactivity as it submits, contrary to amended section 7 for this purpose, a new imposition of a finite situation, the taxpayer cannot adapt its behaviour as a result of the new rule. The retroactivity thus introduced constitutes an infringement of the property rights of the taxpayers who made their transfer in 2012 and reinvested the gains made: they will indeed be forced to assign their assets to pay the tax.
3. The measure contravenes the principle of annuality of tax.
The provisional nature of the tax, which is only valid as a result of the II, cannot be used to exempt the provisions of these grievances. Despite the assertion of its "exceptional" character, the contribution may be or may not be renewed by a subsequent finance law.
However, the exceptional character of this contribution has in itself a manifest unconstitutionality. Any tax, pursuant to the rule of fiscal year of constant application since the law of 26 May 1817 as by the order of 2 January 1959 and then the LOLF, is established in the original finance law only for one year. If this rule is familiar with certain types of spending programming, it will not permit revenue, as well as the annual authorization to collect the tax set out in section 1 of each annual financial bill. An annual financial law cannot establish a tax for two years.
In addition, the statement that the contribution will be applicable to 2013 revenues cannot be found in the first part, since it has no impact on the 2013 fiscal balance, but only an expected impact in 2014. Section 34-II-7, a, of the Organic Law on Financial Laws, states that only the second part "may contain provisions relating to the count, rate and modalities of recovery of taxation of any kind that do not affect the budgetary balance". This is the case for an exceptional contribution received under the year n + 2.
This system is not well aware of both the budget annuality and the imperative nature of the submission of the text in two parts, as reflected in articles 34 and 42 of the LOLF, of which Decision No. 2001-448 DC of 25 July 2001 clearly affirmed the need for presence in the organic law and Decision No. 2012-654 DC of 9 August 2102 (considering 11) has recently been implemented.
If the Commission admitted, contrary to the very letter of Article 34-II of the LOLF, that the words "and 2013" are not detachable from the rest of the article, whereas they are devoid of any operational scope pending the next Financial Law for 2014, then one would face a lack of understanding of the clarity and sincerity of the parliamentary debate in the Financial Law
Finally, if the Commission was based on the imperative nature of this statement, to judge it non-detachable, considering that it is worth beyond a fiscal year, it would be an injunction made by the Finance Act for 2013 to the Government to establish the 2014 Finance Bill.
Regardless of the interpretation given to it, in terms of procedure, or in terms of fiscal yearliness, or in terms of injunction to the Government by the legislator, the creation of an imposition for two years cannot escape censorship.
If it is lawful for the legislator to establish an interim tax — a character which, in fact, is only legally valid until a possible contrary provision, there are many cases of interim taxation that have become perennial — and it cannot be established in flagrant disregard of fundamental rules of budgetary law.
Article 9:
Section 9 of the Financial Act for 2013, which reinstated an article 885-V bis to the General Tax Code, is intended to amend the Solidarity Tax Schedule on Capital, by re-establishing a scale close to the one prevailing before the year 2012, and to establish a ceiling equal to 75% of the income earned during the year, as defined in the E of the same section.
The provisions of this section are contrary to the principle of equality before the tax and public expenses guaranteed by Articles 6 and 13 of the 1789 Declaration and to the right of ownership guaranteed by Article 17 of the same Declaration.
Your Council has stated on several occasions that if it is the legislator's responsibility to determine the rules that must be valued to contributory capacities, it must do so in accordance with constitutional principles. This assessment of contributive faculties should not, in particular, result in a breakdown of equality before public office (12).
Thus, the requirement under section 13 of the 1789 Declaration "would not be met if the tax had a confiscatory character or had an excessive burden on a class of taxpayers in respect of their contributive faculties" (13).
In particular with respect to the solidarity tax on fortune, your Commission noted that the legislator, in order not to create a breakdown characterized by equality before the public expense, has included in the tax regime since its creation by the law of 23 December 1988, "the rules of capping that do not make a tax calculation by tax and that limit the sum of the solidarity tax on fortune and taxes of the previous year".
When the legislator instituted the cap mechanism known as the "tax shield", your Council considered that "in its principle, the contested article, far from misunderstood equality before tax, tends to avoid a marked breach of equality before public expense" (15).
Most recently, your Commission has specified that "the legislator cannot establish a scale of solidarity tax on fortune such as that in force before the year 2012 without the addition of a cap or producing equivalent effects to avoid a marked rupture of equality before public expense" (16).
1. The scale established by section 9 of the Act referred to, under the present circumstances, is confiscatory and imposes an excessive burden on a class of taxpayers in respect of their contributive faculties.
The situation resulting from these provisions is completely new, due to the low performance of fixed income investments as well as the creation of a new 45% tax bracket and the alignment of the tax of capital revenues with the taxation of labour incomes, carried out by the same finance law.
Thus, a taxpayer who, managing its "good father of family" heritage, invests it in state securities (OAT) to ten years, now earns a return of 2.02 % (17). After applying income tax at the marginal rate of 45% and social tax at the rate of 15.5%, or a total of 60.5%, the net return is 0.8% (18). If the State had to take the solidarity tax on fortune at the marginal rate provided for in the above-mentioned article, or 1.5 per cent, the taxpayer would be subject to an amputation of its heritage of 0.7 per cent per annum.
The above figures are given in current euros. Expressed in constant euros, that is, after taking into account inflation of 1.9% (19), the loss of heritage would be 2.6%.
In addition, the above calculations do not take into account the high-income contribution, taken at the rate of 3% or 4%, depending on whether the taxpayer's income is greater than EUR 250,000 or EUR 500,000, which will remain applicable until the taxation of the revenues of the year for which the deficit of the public administrations is zero (20). If this exceptional contribution is added, net capital loss is 0.76% or 0.78% without inflation and 2.66 % or 2.68 % with inflation.
A final calculation, carried out "backwards", allows to determine the interest rate that the taxpayer should seek to avoid a capital loss. To compensate for an inflation of 1.9% after payment of the capital tax at the marginal rate of 1.5%, it would be necessary to obtain 3.4% after tax due on income, a pre-tax rate of 8.6% (21).
Such a rate is currently impossible to obtain, except on extremely risky investments.
It will be sufficient to recall, in order to establish the unpublished character of such levies, that, when the solidarity tax on fortune was instituted by the law of 23 December 1988 with a marginal rate of 1.1%, the rate used on State borrowing at ten years was 8.62 per cent (22) and the rate of the liberatory levy of 26 per cent, which guaranteed to spare a return after tax of 6.38 per cent.
It has never happened that the legislator institutes an imposition on wealth that, combined with taxing revenues, leads to full confiscation of income and partial confiscation of the capital invested in a safe investment.
In addition, the removal of the tax reduction of EUR 300 per dependant under section 885-V of the CGI infringes section 13 of the 1789 Declaration. Indeed, if your Commission has validated in its Decision No.2010-44 QPC the absence of a quotient for the IFS, the total absence of taking into account family expenses with the removal of a tax reduction that exists since the creation of the IFS in 1989 undermines the consideration of the actual contributory capacity of taxpayers.
The taxation established by the deferred article is thus incompatible with prudent management, such as the one that must necessarily choose a guardian who, according to theArticle 496 of the Civil Code"is obligated to provide, in [the management of the heritage of the protected person], prudent, diligent and informed care," or the person who manages the affairs of others, which, according to section 1374 of the same code, "is obligated to bring to the management of the case all the care of a good family father" or, more generally, any person who does not want to risk his or her heritage.
Thus, the solidarity tax on fortune, collected according to the rates established by section 9 of the Financial Act for 2013, would impose an excessive burden on certain categories of taxpayers in terms of their contributory capacities and would therefore affect equality before tax and equality before the public expense guaranteed by sections 6 and 13 of the 1789 Declaration.
2. Article 9 of the Financial Law for 2013 is further contrary to the right of ownership guaranteed by Article 17 of the 1789 Declaration.
It is indeed demonstrated above that the tax rates established by the above-mentioned section necessarily result in taxpayers who choose a risk-free investment being deprived of any income on the basis of that investment and even that the amount of their savings is reduced by a certain fraction each year.
The right of property guaranteed by the Constitution, "inviolable and sacred" according to Article 17 of the 1789 Declaration, is, according to theArticle 544 of the Civil Code "the right to enjoy and dispose of things" (us and abuses), but also, according to articles 546 and 547 of the same code, the right to "natural and industrial fruits of the earth" and to "civil fruits" (fructus). Under theArticle 584 of the Civil Codecivil fruit includes capital income.
By depriving a prudent savers of any income, the provisions of the deferred article deprive them of one of the attributes of ownership.
The cap mechanism established by the E of the same section 9 of the Financial Act for 2013 is powerless to remedy the violations of the principle of equality and the right of property that are denounced above, for two reasons.
The first reason is that the cap is calculated on all of the taxpayer's revenues, so that for taxpayers with other incomes, the confiscation of savings income and the deprivation of civilian fruit remain. For most active taxpayers, the level of activity income is such that the application of section 885-V bis will not result in any reduction of the solidarity tax on fortune.
It is certainly not consistent with the principle of equality before tax and before public expense that the loss of savings income and a fraction of the capital is compensated for annuitants who do not have other incomes and not for those who also have business income.
Excessively levied on capital revenues should correspond, in order to avoid the confiscatory nature of the tax, a cap based on the income of the same capital.
The second reason is that the "income earned" of the previous year, as defined in section 885-V bis re-established by the deferred section, is not limited to the available income, or even to the taxpayer's income, but includes elements that are not related to its contributive faculties.
If it is an appreciable income by the taxpayer, it is fair to integrate them into the cap in order to avoid fiscal optimization strategies; On the other hand, if it is income that is not appreciable, there is a breach of equality between taxpayers because it is capped at the same level at 75% but on revenues that are not actually collected by the taxpayer.
With respect to the profits of a company controlled by the taxpayer (partial control only with a blocking minority), revenues will never be collected since they are not distributed but remain in the company. As such, these revenues have already been taxed on companies; if they were distributed, they would benefit from slaughter; therefore, there is a breach of equality to include them even among the revenues available to the taxpayer, while these revenues are rejected into the company and may be lost if the company perishes (the risk factor is absolutely not taken into account by the legislator); the 4th of the II of Article 885-V bis restored by the E of Article 9 is therefore contrary to the Constitution as it does not take into account the real contributory capacities of the IFS debtors.
More generally, the legislator has instituted a cap not by reference to the total net income of professional fees, income tax exempted from income and proceeds subject to a liberating levy, as it has been used since there has been a cap of the solidarity tax on property, but in relation to that same total amount of property that had not been retained
This enumeration includes elements of income that the legislator has chosen to place as a deferral or a stay of taxation on the ground that the taxpayer does not have the disposition of it, increments of value of contracts that will only constitute income when the contract is terminated, but also, with the profits of companies, amounts on which the taxpayer concerned sometimes has no take and some of which will never add to its revenues.
In addition, the provisions in question are asymmetrical, in that they do not take into account the events affecting the decline of the taxpayer's heritage, such as the decline in the value of life insurance or capitalization contracts or the losses of the family-controlled companies. The gains and losses found in the same year do not compensate, even in a given category.
Thus, the 2nd of Article 885-V bis, re-established by the E of Article 9 of Article 9, incorporates in the calculation of the cap the change in the value of redemption of life insurance contracts. However, for contracts in units of account, the positive change of one year (incorporated to the revenues to calculate the cap) can be lost the following year and the negative change is not taken into account: there is therefore a breach of equality between taxpayers, as long as, on the duration of the contract, even though in the end there is no tax because there is no profit, for certain years, in SI the III of Article 885-V bis only neutralizes positive variations, it does not take into account negative variations.
Finally, the paradox of these provisions is that the amounts in question, taken into account when the taxpayer does not have it, are not taken into account the year in which it disposes of it. Thus, the profits of the companies described above are not taken into account when they are distributed, as if the collection of dividends does not increase the contributory capacity of their beneficiaries.
The amounts listed in the II of Article 885-V bis derived from the above-mentioned article are in fact elements of heritage and not elements of income. In this way, the legislator created a cap of taxation affecting wealth and income compared to an aggregate with income and wealth. Such construction is certainly not in conformity with constitutional requirements.
Your Commission, in its above-mentioned decision of 9 August 2012, referred to cap rules "which limit the sum of the solidarity tax on fortune and taxes due to revenues and revenues from the previous year to a total fraction of the net revenues of the previous year".
The alleged cap established by the deferred article is not a cap on income. It therefore does not allow to reach the objective that it is supposed to aim and avoid the characterized rupture of equality before the public charges that is denounced above.
Under these conditions, article 9 as a whole must be declared contrary to the Constitution, in that it bears, on the principle of equality before tax and in front of public expenses as well as on the right of property, breaches that the cap established by it does not allow to avoid.
Article 10:
Within the real estate surplus-value category, the legislator introduces a distinction between land to be built, subject to the income tax scale, and built buildings, which remain subject to a flat rate (majored by section 24 sexies of PLFR 2012-3).
The confiscatory nature of the overall tax on the real estate surplus-values of the land to be built at the income tax scale appears clearly, since the tax rate can reach a maximum of 90.5%:
45% under the marginal income tax bracket;
15.5 per cent for social sampling;
5% or 10% for the tax provided for inarticle 1605 CGI nonies ;
12.5 per cent or 25 per cent out of 80 per cent of the surplus value or 10 per cent under the optional taxes provided for in the articles 1609 nonies F and 1529 CGI.
The Government's intention is also clear, as it expects this fiscal confiscatory by 2015 to accelerate transfers over the next two years.
Conversely, for built buildings, the level of taxation cannot exceed, at most, 40.5 per cent (price of 19 per cent + 15.5 per cent of social levies + 6 per cent of the maximum surtax provided for in article 24 sexies of PLFR 2012-3).
Such a difference in the level of taxation with respect to property of a similar nature (since it is sufficient to build to no longer be a land to be built) creates a marked rupture of equality before public charges, without sufficient grounds for general interest (a "temporary supply shock") to justify it.
In addition, with respect to the land to be built, there is no provision for detainment, nor for inflation consideration: the surplus value is therefore calculated on an arbitrarily increased value that does not take into account the reality of the real estate market evolution, inflation having an effect on the nominal value of the property that is absolutely not taken into account; the real contributory capacities of taxpayers are therefore not taken into account.
In addition, this article 10 restores the exemption of real estate surplus-values when the assignment is made for the benefit of a social lessor to realize social housing. However, this exemption is not extended to private donors. There is a reason for a breach of equality before the tax.
Finally, it is odd to think that the owner of a land to build the land will die in 2013 or 2014 in the context of a considerable amount of taxation on the grounds that it would become almost confiscatory from 2015. The intelligibility of this device is all the less noticeable since, with respect to the built properties, the "proposal shock" is expected to be further reduced by 20% of the surplus value tax plate.
For these reasons, it is up to your Council to censor this article.
Article 36 bis:
This article amends the legal regime of the assignments of built real property located in a state forest. However, the appellants argue that the I of this article is without direct budgetary impact, unlike the II of the article referred to it in the balance article, since it is only procedural rules for the sale of State property.
It is therefore necessary to censor him.
Article 56:
By excluding certain tax benefits from the cap at EUR 18,000 + 4% of the taxable income (“Malraux”) and by creating two separate caps, one fixed at EUR 10,000 and the other at EUR 18,000 + 4% of the taxable income, there is a breach of the principle of equality between taxpayers and excessive complexity of the tax law preventing taxpayers from making rational choices.
These are grounds for censorship on the part of your Council, as evidenced by consideration 85 of your decision No. 2005-530 DC of 29 December 2005.
Article 64 bis:
This article, which provides for the financing of the work mandated under a technology risk prevention plan (TPP), is without impact on the state budget. Its tax impact is also too indirect. In fact, the general rapporteur of the budget in the National Assembly, in his report on a new reading on page 112, considers that "we can question the reality of his fiscal and fiscal impact." It is therefore necessary to censor him.
Wishing that these matters be decided in law, the members of the Constitutional Council, therefore, ask the Constitutional Council to take a decision on these matters and all those that it considers relevant in view of the constitutional control function of the law conferred on it by the Constitution.
