Understand

Analysis · Taxation · Welfare State

Inactivity Traps

In France, the poorest people face the highest tax rates. When you earn €1,000 gross per month, the state sometimes takes more than 100% of each extra euro. This isn't a figure of speech. It's arithmetic.

~80% of each extra euro taken by the state at low income — contributions + withdrawn benefits
4,40€ real gain per hour for Camille, single parent on RSA, taking a full-time SMIC job — instead of the listed €11.65 gross
40 ans of uncoordinated stacking — RSA, APL, prime d'activité, CSS — nobody ever looked at what they do together
01

Of every €100 you earn, how much do you keep?

When you receive social benefits and start earning a salary, two things happen at once: the state deducts contributions from your salary — and reduces your benefits. Both accumulate. The result: depending on your income, you might keep 70 cents of each euro earned, or 5 cents, or even lose money.

Drag the slider. Watch the number. That's what you keep out of every extra €100 gross you earn.

You earn 1 200€ gross/month. You get a raise of €100 gross/month.
Of these €100, you keep:
10€
0€ 100€
0€ gross 2 500€ gross
Breakdown of these €100:
💡 The key takeaway The zone between €800 and €1,500 gross is the most confiscatory. That's exactly where minimum wage earners, single parents returning to work, and part-time workers are. Those the system is supposed to protect are those it penalises the most.
02

Camille's calculation

Camille, 34, single parent with one child. She's not working. RSA, APL, CSS: €1,045/month. An employer calls her back — first half-time at SMIC, then full time. Before calling back, she runs the numbers. Here's what she finds.

35h of work a week. €4.40/h of real gain. The rest — €7.25/h — goes to lost benefits. This isn't laziness. It's arithmetic.

Click each step to see what Camille earns — and what she loses.

→
→
1 / 3
💡 The key takeaway Camille is the typical case — not an extreme one. If the rate from section 01 seemed abstract, look at what it produces in practice: 35h of work a week, and a gain of €4.40/h. The system doesn't reward effort. It neutralises it.
03

The objections — turned around

This problem has been documented since the 1990s. Reports, experiments abroad, proposed reforms. The trap is still there. Here's why it persists — and how solid those reasons actually are.

Click an objection to turn it around.

01 🏗️

"It's too complex to reform — too many agencies, too many funds."

And the reality? →
01

The UK merged 6 benefits into Universal Credit in 2013. The US simplified into a single EITC in 1975. French complexity isn't inevitable — it's the result of 40 years of decisions added without ever removing any.

02 🤷

"People on RSA don't want to work anyway."

And the reality? →
02

Camille called the employer back. She accepted. Studies on the EITC show a significant rise in employment rates among single parents when incentives improve. People respond to the signals they're sent. The problem is when those signals are absurd.

03 ✅

"The prime d'activité already fixed this in 2016."

And the reality? →
03

In 2025, the implicit marginal rate at low income still reaches ~80%. The prime d'activité was added to the system — with its own withdrawal rules. It created an extra layer in the stack, not removed the problem. It's actually the perfect example of the problem.

04 💸

"Reforming would cost too much."

And the reality? →
04

Funding an inactivity trap means paying people to stay in a suboptimal situation. The US EITC raised employment rates among recipients while reducing their benefit dependency. Keeping the current system costs more than reforming it.

The problem isn't Camille. It's badly designed benefits.

When the system makes not working rational, not working is the rational decision. The solutions exist — uniform gradual withdrawal, single window, real-time calculation — they've worked elsewhere for decades. What's missing isn't the technique. It's the will to face what 40 years of stacking have produced.