French election: Hollande wants 75% tax on top earners

 
Francois Hollande washes a cow as he visits the Paris international agricultural fair, 28 February  Mr Hollande visited the Paris international agricultural fair on Tuesday

The Socialist favourite in France's presidential election, Francois Hollande, has said top earners should pay 75% of their income in tax.

"Above 1m euros [£847,000; $1.3m], the tax rate should be 75% because it's not possible to have that level of income," he said.

Speaking on prime time TV, he promised that if elected, he would undo tax breaks enacted by Nicolas Sarkozy.

The tax proposal was condemned by his political opponents.

Opinion polls suggest the gap between the Socialist candidate and Mr Sarkozy has narrowed.

The two are tipped to reach the run-off on 6 May, after eliminating other rivals on 22 April.

Taxation for the rich has become a hot campaign issue, with tax advisers in neighbouring Switzerland saying that higher taxes for the wealthy in France could spark an exodus, Reuters news agency reports.

Many of France's richest celebrities already live abroad.

'Patriotic' tax

The French right-of-centre newspaper Le Figaro reports that Mr Hollande's announcement on the TF1 channel appeared to take party colleagues by surprise.

Jerome Cahuzac, responsible for budgetary affairs on Mr Hollande's campaign team, was questioned about the 75% rate on another channel, France 2, just minutes afterwards.

Start Quote

[Francois Hollande] invents a new tax every week without ever proposing the smallest saving”

End Quote Valerie Pecresse Nicolas Sarkozy's budget minister

"You are asking me about a declaration which, for my part, I haven't heard," he said.

Mr Hollande himself renewed his call on Tuesday, saying the 75% rate on people earning more than one million euros a year was "a patriotic act".

"It's a signal that has been sent, a message of social cohesion, there is an effort to be made," he explained.

"It is patriotic to agree to pay a supplementary tax to get the country back on its feet."

Centrist presidential candidate Francois Bayrou dismissed the idea.

He told another TV channel, BFMTV: "I think it was [French film director Michel] Audiard who used the rather rough phrase: the rubbish-ometer [French: deconnometre] is working overtime."

Ministers from Mr Sarkozy's ruling UMP party also attacked the proposal.

Francois Hollande "invents a new tax every week without ever proposing the smallest saving", said Budget Minister Valerie Pecresse and Foreign Minister Alain Juppe denounced the plan as "fiscal confiscation".

When Mr Sarkozy came to power in 2007, he introduced a "tax shield" that capped tax at 50% of all income.

 

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  • rate this
    +4

    Comment number 240.

    Taxing the “Rich” has always been seen as a way to solve a nation’s spending problems, but this has never actually been successful. Any tax increase to 75% will have the affect of causing “Capital Income” to leave the Nation and go to where it will earn the highest rate of return at the lowest tax. There is an old saying that applies “50% of something is better than 100% of nothing”.

  • rate this
    -1

    Comment number 178.

    75% is too high a tax rate. A better rate would be about 40%, but that's unlikely to be the socialist policy. The French economy may be better served by another Sarkozy government.

  • rate this
    -1

    Comment number 172.

    We all seem to be playing the game, but throwing at different boards. Neither is right nor wrong. I would much rather see a system of tax incentives given to the 1% whereby the more investments they voluntarily make towards helping the needy, the less tax they have to pay. If a man makes $100 and only gets to keep $25, wouldn’t he prefer to give away 50% to the needy and keep $50 instead?

  • rate this
    -19

    Comment number 63.

    The only debate about this should be whether 75% is high enough! After all this doesn't come into effect until earnings go past the million euros mark - at that point it should be considered you have plenty and so 90% would be more appropriate. The practicalities of it are another matter but that shouldn't distract from the fact that this would be a step in the right direction.

  • rate this
    +30

    Comment number 58.

    isn't 75% over-the-top?
    If a person is smart enough to earn a million euros, he/she would be smart enough to live elsewhere too!

 

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