French Socialists Propose 2027 Budget: Higher Minimum Wage and Wealth Taxes

Socialist Counter-Budget 2027 Proposes Progressive CSG Tax Overhaul

According to the Socialist parliamentary group’s financial modeling, the counter-budget aims to replace the flat-rate Generalized Social Contribution (CSG) with a progressive scale targeting 21 million workers earning up to 2,700 euros net per month. For minimum wage earners, the CSG rate would drop sharply from 9.2% to 0.55%, generating an estimated 130-euro monthly net gain for a single worker without children, as outlined by the group on September 16, 2026. For a household consisting of a couple with one child where each partner earns 2,000 euros net, the rate would fall to 1%, yielding an additional 235 euros net per month. Earnings exceeding the 2,700-euro monthly threshold would remain taxed at the standard 9.2% rate, according to the proposal.

The CSG functions as a primary funding source for France’s social security system, weighing heavily on payrolls because it applies from the first euro earned without tax brackets or deductions, though it exempts regulated savings accounts such as the Livret A and LEP. To offset the resulting 10-billion-euro revenue loss for social security, the Socialist blueprint introduces alternative funding mechanisms targeting high-net-worth individuals and corporate revenues, according to policy documents released in Paris.

Smic Raised to 1,700 Euros Net and Lifetime Inheritance Taxation

Alongside the payroll tax adjustments, the counter-budget calls for lifting the national monthly minimum wage, known as the Smic, from its current net level of 1,477.93 euros (1,867.02 euros gross) to 1,700 euros net, according to administrative figures cited in the text. The 222-euro monthly increase represents a 15% upward adjustment. Socialist lawmakers also requested a social conference on wages to renegotiate industry salary grids, which risk compression when the statutory minimum wage rises without corresponding adjustments to intermediate pay scales.

To finance these measures alongside public investments, the group proposes overhauling inheritance taxation by calculating duties on the cumulative total received by each beneficiary over a lifetime, rather than taxing transmissions separately every 15 years under the current system. Under existing French law, each child benefits from a 100,000-euro tax-free allowance per parent that resets every 15 years, enabling families to pass on substantial wealth free of duty through early, fragmented donations. The Socialist proposal targets the top 10% of inheritance recipients in France who receive more than 500,000 euros, according to Estelle Mercier.

Tax Revenues and Public Deficit Projections for 2027

The 39.5 billion euros in newly projected tax revenues rely heavily on three main pillars, according to the Socialist parliamentary documents:

• The Zucman Tax: A 2% minimum contribution on fortunes exceeding 100 million euros, projected to yield 15 billion euros in revenue, as detailed in the budget presentation.
• Inheritance Taxation: The reformed lifetime inheritance levy, expected to generate 10 billion euros.
• Digital Services Tax: A dedicated levy on major American technology companies, also targeted to bring in 10 billion euros.

On the expenditure side, the plan schedules 22 billion euros in new allocations, including 10 billion euros for climate adaptation and transition, 3 billion euros for legislation addressing sexist and sexual violence, and funding for healthcare, agriculture, and education. Lawmakers project these measures will cut the public deficit by 24 billion euros in 2027—reaching 4.9% of GDP and 0.3 points of growth.

These figures represent opposition estimates that have not been validated by independent fiscal institutions. The official government budget, anticipated in late September 2026 under Prime Minister Sébastien Lecornu, targets a deficit reduction to 4.8% of GDP through an estimated 54 billion euros in budgetary adjustments, which may include the taxation of employee savings schemes.

Political Context and Parliamentary Outlook

The release of the counter-budget arrives eight months ahead of the French presidential election and amid active left-wing primary discussions, altering the political dynamics seen during the previous year’s budget cycle. In the previous year, Socialist deputies permitted the adoption of the 2026 budget by abstaining from censure motions in exchange for the suspension of contentious pension reforms.

For the 2027 fiscal package, Socialist Party First Secretary Olivier Faure and parliamentary group leader Boris Vallaud have signaled that a government censure remains a distinct possibility, though budget negotiators Estelle Mercier and Sandrine Runel adopted a more conciliatory tone during the September 16 press conference, stating they remain open to discussions depending on how the government handles their proposals.