Political feasibility of French income tax reforms

Pierre Boyer, Adel Takhedmit () and Paul Vanborre ()
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Adel Takhedmit: CREST, Ecole polytechnique, Institut polytechnique de Paris
Paul Vanborre: CREST, Ecole polytechnique, Institut polytechnique de Paris

No 2026-05, Working Papers from Center for Research in Economics and Statistics

Abstract: We study recent income tax reforms in France from a political economy perspective. Building on Bierbrauer et al. (2021), who establish that the median voter is decisive for reforms where the change in the tax burden is monotonic in income, we make three contributions. First, using administrative tax data and a microsimulation model, we show that major French tax reforms since 2002 have been monotonic. Second, median voter support consistently aligned with majority support across all major reforms. Third, we compute upper and lower Pareto bounds for a range of taxable income elasticities. Violations of these bounds indicate situations where self-financing tax cuts are possible. This characterization identifies the space of politically feasible reforms. For elasticities below 0.25, the French tax system lies below the upper Pareto bound, while the lower bound remains far from the current schedule for conventional elasticity values.

Keywords: Non-linear income taxation; tax reforms; political economy; optimal taxation; Pareto efficiency. (search for similar items in EconPapers)
JEL-codes: C72 D72 D82 H21 H24 (search for similar items in EconPapers)
Pages: 58 pages
Date: 2026-05-19
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