The differential contribution on high incomes, created in 2025, brought in only 400 million euros, nearly five times less than expected, according to the Ministry of Economy and Finance. This tax, aimed at ensuring a minimum 20% taxation for the wealthiest, was largely circumvented by targeted taxpayers. It highlights the challenges in effectively taxing very high incomes in France.
On Wednesday, January 21, 2026, the Ministry of Economy and Finance acknowledged the resounding failure of the 'differential contribution applicable to certain taxpayers with very high incomes' (CDHR). Introduced in the 2025 budget adopted in February under François Bayrou's government, this measure aimed to address the public deficit while responding to calls for fairer taxation.
Conceived under Michel Barnier's government, the CDHR targets taxpayers declaring over 250,000 euros annually for singles or 500,000 euros for childless couples. It ensures a minimum 20% tax rate on declared incomes, regardless of tax niches used. If this threshold is not met, an additional payment is required to reach it.
However, revenues only reached 400 million euros, far below expectations. Wealthy taxpayers evidently succeeded in circumventing the tax, demonstrating their ability to exploit fiscal system loopholes. This example highlights the limits of mechanisms specifically targeting the rich, amid tense 2026 budget discussions.
Meanwhile, debates on the 2026 budget reveal political tensions. LFI leader Mathilde Panot criticized the Socialist Party (PS) for accepting minimal compromises, far from its August 2025 counter-budget that proposed a Zucman tax on high patrimonies or the repeal of the retirement reform. Partial concessions were secured, such as freezing the retirement age at 62 years and 9 months until 2028, benefiting 3.5 million people, or maintaining the surtax on large companies' profits at 7.3 billion euros. However, flagship measures like reinstating the ISF or doubling the Gafam tax were dropped.
These developments fuel debate on public deficit management, which analysts like Raul Magni-Berton attribute less to government incompetence than to lax fiscal rules.
