Macron's 2018 tax cuts benefited the rich most: stats agency

Meeting of French mayors in Paris

PARIS (Reuters) - Wealthy French households benefited more from President Emmanuel Macron's tax cuts in his first year in office than others, the INSEE official statistics agency said on Tuesday.

The finding is likely to rekindle criticism of the former investment banker who detractors have accused of being a "president of the rich".

Macron's administration has argued the cuts will eventually benefit all French people, including the less well off, by steering investment into French companies.

Macron replaced France's wealth tax last year with a flat 30% tax on income and gains from financial investments.

He also cut a tax on households' residence and eased workers' payroll contributions to the welfare system by increasing a broader tax on all forms of income, which hit pensioners particularly hard.

The combined effect of the measures was an increase of 1.1% in households' income on average last year, INSEE said. Meanwhile, the 10% richest households saw a gain of 1.4% due to the end of the wealth tax and the flat tax.

The measures lifted wealthy households' income by 790 euros on average while gains for the rest of the population ranged from 130 to 230 euros, INSEE found.

Though designed to encourage investment, growth and getting people into jobs, Macron's tax reforms helped fuel a series of sometimes violent demonstrations against Macron's government by protestors clad in high-visibility yellow vests.

The protests sparked some of the worst street violence in decades, though the Yellow Vest movement has since lost some of its momentum.

INSEE's report comes at a politically delicate moment for Macron as unions prepare to strike next month over a planned pension reform.


(Reporting by Leigh Thomas; Editing by Christian Lowe)