Covenant of Responsibility: slap wise in Holland – Echoes

Covenant of Responsibility: slap wise in Holland – Echoes

The Constitutional Council cancels relief payroll taxes on wages below 1.3 SMIC. The government was forced to revise its copy on a measure of purchasing power in favor of the low paid

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The Constitutional Council has imposed a further blow to the government (after already retoqué, among others, the initial version of the tax to 75%), and it is severe. The sages of the rue Montpensier canceled Wednesday decrease employee contributions that the Government would introduce 1 ^st January to restore the purchasing power of the poorest workers. The Council examined the Finance Act Amending Social Security, passed on July 23. He found that this provision was unconstitutional because it “violates the principle of equality.”

itemprop=”articleBody”> The bill provided for establish regressive taxes on low wages. The reductions were greatest for wages at the minimum wage. Smicard would have seen a net income increase of 520 euros per year by 2015 if the provision had been validated. The relief was subsequently decreasing until be zero at 1.3 SMIC and beyond (or 22,548 euros per year). In other words, the higher the income, the lower the gain in purchasing power was important. Some 7.4 million people have been affected, one step at 2.5 billion euros.

“Differential Treatment”

For François Hollande, and Manuel Valls, this was particularly important because it brought a consideration for employees to reduce charges (much larger) granted to employers. It was a way to respond to criticism in the PS on the pact of responsibility, considered too pro-business. The reverse is so serious and the government will now try to develop another measure “of the same magnitude to achieve the same goal,” says it within the executive. What promises to be particularly difficult.

itemprop=”articleBody”> According to the Council, the device designed by the government have created “differential treatment” between the different wage levels. For the same benefits (health insurance, retirement …), the insured does not have all contributed equally to Social Security. “Nearly a third of them” , said the decision would not have paid anything at all.

itemprop=”articleBody”> The executive was particularly surprised by this decision. As with all budget documents he consulted the Council of State, and it did not consider the introduction of regressive payroll taxes as unconstitutional. “This is all the more surprising that employer costs, they are regressive ‘, we pointed Wednesday to the government. Since the mid-1990s, employers benefit from reductions on low wages.

And itemprop=”articleBody”> pact introduces new liability exemptions for businesses. The Constitutional Council found nothing wrong on this point. Sages have validated the relief on employer contributions under 1.6 SMIC wages, exemptions from charges for self and the removal of C3S for small businesses. Those measures designed to strengthen the competitiveness of businesses are the heart of the covenant responsibility. The Council also gave the green light to freeze pensions above 1,200 euros, which is partially finance these reductions samples.