Philippe Juvin Proposes Major Tax and Salary Reform to Return €106 Billion to French Workers

Philippe Juvin, the French general budget rapporteur, has unveiled a comprehensive plan to significantly increase the purchasing power of French employees by returning €106 billion to workers through reforms that reduce labor taxation. According to a recent OECD study cited by Juvin, only €52.80 of every €100 spent by employers in France currently reaches employees, ranking France as the third highest OECD country taxing labor.

Juvin’s proposal centers on abolishing key salary contributions—including those related to health, retirement, and unemployment—while maintaining contributions such as the CSG (Generalized Social Contribution) and CRDS (Repayment of Social Debt Contribution). To offset lost revenues, he suggests raising the VAT by three percentage points and the CSG by one point, projected to generate approximately €40 billion for the government.

Furthermore, the plan calls for eliminating the activity bonus, which Juvin describes as a “trap for low wages.” He argues that higher direct salaries will reduce the need for such bonuses, potentially saving another €10 billion. The remaining €56 billion is expected to be recuperated through increased consumption driven by enhanced purchasing power, thereby stimulating higher tax revenues and job creation.

Juvin estimates that these changes could lead to the creation of 450,000 new jobs over five years and boost overall public finances.

This proposal responds to widespread public dissatisfaction, as indicated by a February Elabe poll showing 77% of French citizens feel that work no longer pays off financially, while only 23% believe it provides financial stability. By returning more money directly to workers and restructuring taxation, Juvin aims to reverse this sentiment and stimulate economic growth.

The reform focuses on rebalancing France’s complex taxation system where heavy salary contributions reduce take-home pay, aiming for a more transparent and rewarding wage structure for employees.