Wednesday, October 8, 2014

Capping or taxing child benefit: the return of an old … – The World

Capping or taxing child benefit: the return of an old … – The World

The World | • Updated | By

The left is planning to challenge the universality of child benefit.

Should we do away with the universal family benefits? The question comes up again on the mat after the statements of several Socialist heavyweights who propose to include modulation of allocations in the budget of Social Security. The thorny issue of the public debate for years.

What do we speak? For eighty years, France has implemented a population policy which requires specific support to parents. Landry Act of 11 March 1932 sets up bodies loaded to assist employees with two children. A new law in 1938, creates family allowances paid without means to all families, with a sliding scale that increases with the number of children, regardless of household income.

Fixed in the law by the orders on Social Security of 1945 and the Act of 22 August 1946, decoupling between income level and amount of benefits remains, as to constitute a pillar of family policy in France: that Whether rich or poor, allocations based on the number of children that we have is key. This is called the “political family”, an idea cherished by politicians of both right and left.

So, in 2014, in France, every family is entitled to 129.35 euros per month from two, 295.05 euros for three, 460.77 euros for four, plus 165.72 euros for each additional toddler.

2. Some cost, but the benefits down

This policy choice has a significant cost 30.7 billion euros in 2011 for single family benefits (allowances, care for young children, family credit …), according to Social Security, against 23.2 billion a decade earlier delivery. This is twice as much as housing assistance (€ 16.5 billion in 2011.)

About half of the 30 billion that France spent on family policy focuses to benefits paid without means.

Among these benefits, family allowances represent a significant part: 12000000000 euros in 2013

– 10.2% Bémol certain. <- - atom snippet!>: Family allowances are uprated decades, therefore they declined by 10.2% in volume between 2000 and 2010, according to a study by the Court of Auditors.

From 71% to 56 % Similarly, the share of “universal” benefits paid in total declining: according to the Court of Auditors, in 2000 there were 71% of the volume of family benefits that corresponded to universal benefits, against 56% in , 2010.

52% The income criteria and exclude 52% of households in the allocation of school year (in 2009).

3. Threshold effects and edge

This principle of equality, regardless of the income level of the family, has adverse effects: some benefits, such as Paje (provision of services for young children, itself divided into several benefits based on type of care) benefit far more for wealthy families.

According to a calculation by the Court of Auditors, the 10% from less affluent families received in 2010 120 million euros “supplement for free choice of childcare,” Paje allocation for children cared for at home or with a nurse, when 10% of the wealthiest families earned for the same allocation, € 1.05 billion, ten times more

Behind this injustice, a combination of edge effects. aids we touch more for a home nurse , which qualifies for tax cuts, for a nursery place

4. A politically explosive issue

Regularly, the question arises in the political debate to return to this calculation. Two options are on the table:

Means test The most common is that of the last-tested family allowance?. In practice, this means that incorporate the calculation of family benefits parental income. At present, according to the National Family Allowances Fund (CNAF), 4.92 million families, or 73% receive child benefit. Among these very wealthy families who would have done without this benefit.

837 million Mentioned very long time (Raymond Barre spoke in his rallies in 1987), the idea was put into practice once, as Rue89 reminds: inspired by Martine Aubry, Lionel Jospin had set a cap on family benefits. Set at 25,000 francs (3,800 euros) per month per household, it had led to eliminate aid for 351,000 homes, causing, according to CAF, 837 million euros in savings.

But the project, fought tooth and nail by both the family allowance and the right-wing opposition, quickly took on water, despite successive attempts development, which increased notably the ceiling to 32,000 francs (4200 euros). And Lionel Jospin finished after ten months abandoned the idea altogether, and replace it with a lower ceiling of the family quotient.

taxation The Another possibility is that of taxation of family benefits. It is this time to consider that family benefits are income and submit the tax scale, with any adjustments. Raymond Barre was already proposed in 1987, Alain Juppe, also brought up the track in 1995 as part of his plan. But the project came to the Assembly after the mass demonstrations against the pension reform of the civil service, had been postponed indefinitely

A third option deserves mention. One proposed by Bruno Le Maire when he was in charge of the program outline of the candidate Sarkozy in 2012 He also proposed taxing child benefit, but offered in return to pay from the first child. Again, the proposal as too inconoclaste and electorally dangerous, was soon abandoned, as every attempt to return to the French family policy

Read. When considering taxing right family benefits

The budgetary emergency she will make the different situation in 2014? This is doubtful. Francois Hollande, questioned by the National Union of Family Associations (UNAF) during the campaign, had found that “family allowances ha [d] not to be imposed.”

See also: Taxation of family allowances, the impact on your taxes


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