State tax revenues represent more than 90% of all its revenues. They are made up of direct and indirect taxes (distinction between taxpayers and taxpayers). They allow the State to implement its various public policies. In the finance law for 2019, they reached 273.5 billion euros net (general state budget).
Two types of tax revenue
The direct taxes are taxes borne directly by those subject to it. They are often collected using a roll, that is to say a list of names of taxpayers. The latter cannot transfer the burden of tax to other economic agents, unlike indirect taxes.
The indirect taxes are taxes on expenditure, which are incorporated in the price of goods and services consumed. The companies pay them to the state. There are two categories: value added tax (Sales tax), based on consumption, and indirect contributions, specific taxes relating to certain products or certain specific activities. The tax with the highest yield is Sales tax (almost half of tax revenue). The use of the free sales tax calculator comes useful there.
Refunds and rebates
Tax revenues are said to be “net” when we subtract refunds and allowances. The reductions correspond to the elimination or reduction of the tax, pronounced or granted by litigation (discharge or reduction), by remission or moderation, or even automatically (if the law has provided for it or to spontaneously repair an error). This is also the case, for example when the amount of the employment bonus exceeds the income tax normally due by the taxpayer. They can also relate to local taxes; in which case it is the State which pays the tax to the local authority in place of the taxpayer.
Distribution of State tax revenues
Almost 90% of the state’s net tax revenue comes from income tax, corporation tax and value added tax (Sales tax). In particular, Sales tax alone accounts for almost half of the state’s net tax revenue.
The vast majority of State resources are thus compulsory deductions (For more information: The main characteristics of public finances). However, some compulsory deductions do not benefit the State. This is the case in particular for certain resources of local authorities (for example local direct taxation: property, housing and professional taxes), or of social security administrations (generalized social contribution or CSG, social contributions and transferred revenues by the state).
Citizen’s consent to tax
Sometimes having the feeling of supporting an excessive share of the financing of public action, every citizen must be able to verify the legitimacy of the tax. Citizens’ consent to tax is in fact a central pillar of representative democracy. Thus, in order to clarify and improve relations between the French and their tax administration, the Taxpayer Charter was created in May 2005, in a logic of simplicity, respect and fairness.