What reform for the active solidarity income and the employment bonus?

Summary While there has long been talk of reforming employment subsidies for the lowest paid, the recent difficulty encountered by the government in lowering employee social security contributions on low wages (a measure censured by the Constitutional Council) has reopened the debate on reforms of existing schemes for the lowest incomes: the Employment Bonus and the Active Solidarity Income. As part of the LIEPP's reflections on the evaluation of the use of taxation for social policy purposes, we publish hereafter three texts defining three possible orientations for the reforms of the RSA and the PPE. These texts are from a study day organized on January 29, 2014, entitled "The taxpayer and the assisted. The RSA/PPE debate between principles and parameters". They focus on the challenges of using taxation to support the activity of low-income workers, but also on the profound limitations of the current system. Since 2000, France has developed a negative tax, first in the form of the employment premium (PPE) and then as part of the active solidarity income. This is indeed a tax expenditure aimed at employment and social policy. Several factors call into question the coherence and effectiveness of the choices made: the specific characteristics of the RSA, as well as the massive non-use of its activity component, have led to a reflection on this issue. For its part, the PPE, whose scale has been frozen, poses a distribution problem. Widely distributed, it suffers from "sprinkling" and poor responsiveness. Taking note of these structural weaknesses of the two schemes designed to support low-income workers, the report submitted by deputy Christophe Sirugue to the Prime Minister in the summer of 2013 proposed an "activity bonus" merging the PPE and the RSA activité.While the reduction of employee social contributions for salaries between 1 and 1.3 SMIC was favored to "make work pay" or at least more attractive, at the bottom of the wage scale, a decision of the Constitutional Council of 06/08/2014 , rejecting such a reduction on the grounds of disregard for the principle of equality before the law has put the issue of merging RSA / PPE back on the agenda? How to respond in the most effective way to a challenge created by low wages on the one hand, the inconsistency and failures of public policies on the other?.