| "that would mean lower profits for employers (who contribute a higher percentage of their income)" No, for equivalent 'net money on your wallet after tax' a company pay more tax for employees than for company owner. Without detailling too much (and by choosing an 'arbitrary but realistic situation') the are two ways of getting money from your company to your personal bank account : - a specialy taxed "company owner" salary (you can make simulation here : https://mon-entreprise.urssaf.fr/simulateurs/eurl , yes I choose a specific company category, but it's a common one, you can compare with a the 'standard' employee tax numbers : https://entreprise.pole-emploi.fr/cout-salarie/ ) which give you benefit from the social security system and which cost a bit less (for a standard company owner range of pay) than an employee salary. - A 'company profit share' at the end of each year. You 'decide' how much you company profit was this year and that you want to give to owner, you pay a "less important tax than on salaries" give it to the owner, and then they pay their personnal income tax on it. The optimisation game is to ensure yourself a sufficient salary to have a good social protection (and other perk like being abble to rent/buy/loan money easily) but also benefit from company income share wich is less taxed. I dont even talk about legal trick to avoid parts of the company income tax, wich is way more complex to handle than a salary. |