François Bayrou Confirms the Retention of the High-Income Tax in the 2025 Budget

Prime Minister François Bayrou has announced that the high-income tax will be included in the 2025 budget proposal, addressing a request from the Socialist Party to avoid a vote of no confidence.

In a letter to the presidents of the Socialist parliamentary groups, obtained by H24 NEWS, François Bayrou stated that “the government will propose, in the revenue section of the 2025 finance bill […] the retention of the differential contribution on high incomes (CDHR).” This tax, initially expected to generate €2 billion, was introduced by Michel Barnier. It is set to be replaced by a permanent mechanism aimed at combating what is perceived as unfair tax optimization by 2026.

A Reversal on the CDHR

Earlier this week, François Bayrou suggested that the CDHR might be removed due to concerns over the principle of tax non-retroactivity. However, in a letter sent on Thursday, he reversed this stance, confirming that the tax will indeed apply to 2025 incomes. Affected taxpayers will need to estimate their income and pay an advance this year, which can be adjusted in 2026.

The contribution imposes a minimum tax rate of 20% on individuals with a reference taxable income exceeding €500,000 for couples or €250,000 for single taxpayers. It primarily targets capital income, such as dividends and capital gains, which have been subject to a flat tax of 30% since 2018. Under the new measure, the tax on these forms of income for the wealthiest individuals will increase to 37.2%.

A Wealth Tax Under Consideration for 2026

For the 2026 budget, the government is considering replacing the CDHR with a new tax on wealth exceeding €100 million. This proposed measure, still under discussion, aims to establish a fairer and more consistent approach to taxing large fortunes.

This strategic shift comes at a critical moment, just hours before a vote of no confidence in the National Assembly. François Bayrou appears determined to reassure the Socialist Party and maintain political stability around the 2025 budget.