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
    -1

    Comment number 95.

    You have to know that in France there are also the CSG and ISF taxes. If Mr. Hollande would be President, 75% taxes and CSG, ISF, means 100% tax.

  • rate this
    +21

    Comment number 94.

    Any tax rate above 50% amounts to a punishment for being successful -- the exact opposite of what a free economy is all about. While it is fair to expect that the well-to-do contributes more to the society where they reap the benefits of their industry, it is not wise to give them the message that being successful will cost them dearly. This will result in reduction in innovation and investment.

  • rate this
    +4

    Comment number 93.

    No-one sane would happily pay 75% of their earnings in tax.

    I think they should go for it. France's top earners can then migrate over here and provide jobs for us. They should also introduce the Tobin tax. All good for us...

    I cannot see how taxing anyone more than 50% can be considered morally decent. As far as I'm concerned if you pay more than 50% tax you effectively work for the state.

  • rate this
    +4

    Comment number 92.

    Before we all get our socialist rocks off, remember Exile on Main Street. The Rolling Stones went to France (!) to escape Labour's punitive tax rates. All their earnings went to the French exchequer, not ours.

  • rate this
    +2

    Comment number 91.

    I have spent the last five years pursuing my dream.

    I work well over 30 hours per week and make less than most of my employees.

    If I were to be told I could not make a VERY healthy income one day without paying a very high level of tax I would have stayed as an employee and not continue to employee 5 others (all earning more than me at present).
    Let the rich make money - I hope to!

  • rate this
    +3

    Comment number 90.

    75%?
    What a splendid idea! Steam right in with that one François! Absolute genius!
    Only the French are competent to destroy the French economy! While you're at it, remember to NEVER make any spending cuts! Not EVER!!

    Oh, and btw, how about tripling the Financial Transaction Tax for good measure -- you know, the one that your prospective oppo has suggested?

    Forward through taxation!!

  • rate this
    +7

    Comment number 89.

    quite shocking that anyone should think that level is fair, after all, by the time you've earnt a million your tax bill is already huge by ordinary standards and you are less likely to be a cost to the state, even in France - long live fair taxation. why punish the rich just because you can?

  • rate this
    +7

    Comment number 88.

    They found out in other countries that this kind of take actually goes over the other side of the Laffer curve, in other words the actual tax receipts would go down, as it then be worth while to hire skilled accountants to squirrel the money away out of the chancellor's reach. The trick is to pitch the take at the point where it is not quite worthwhile.

  • rate this
    +1

    Comment number 87.

    It will work -- when every country has the same rate. Otherwise, the very high earners will simply live somewhere else. And who would blame them?

  • rate this
    +2

    Comment number 86.

    Maybe this populism will be seen as a cynical ploy for election. Frances needs tough medicine:
    + All pensionable age rising to 67, including those in the public sector
    + deregulation of all employment groups and ending the 35hr week
    + huge cuts in public spending
    Only in this way will France become great again.

  • rate this
    +3

    Comment number 85.

    Another example that proves Mr. Hollande is completely unfit to run our country! No wonder he was married to Segolene Royal for so long --- they have so much in common! This kind of nonsense makes me regret DSK... Oui, oui! :)

  • rate this
    +2

    Comment number 84.

    Let the rich eat their tax returns.

  • rate this
    +1

    Comment number 83.

    It will achieve nothing, the only effect will be for those who earn that much to change the way they pay themselves or to base themselves off shore and pay no tax.

  • rate this
    -1

    Comment number 82.

    What is needed is a simply the only wage that can go up is the minimum wage, have all wages linked to that and they all go up a certain percentage at the same time... The problem now is simply those on a million keep getting pay rises and those on minimum wages are told it will have to go down or be held because of the "economic situation" All people want is a chance to live comfortably....

  • rate this
    -3

    Comment number 81.

    It is much higher in Norway I believe ?? And so it should be a minimum of 75% and be scalled up to 98% for those from 1.5/2.5 and above. Obscene earnings are really unjustified

  • rate this
    0

    Comment number 80.

    Won't happen.

  • rate this
    -1

    Comment number 79.

    Hollande's proposal is tantamount to state theft against its most talented citizens. With a 75% tax rate, tax evasion (as well as legal tax avoidance) may be seen by many as ethically justifiable. This encourages lawlessness and impoverishes the state yet further. No good can come from the politics of envy. Remember "Sunny" Jim Callaghan and the UK brain drain of the 70s?

  • rate this
    +1

    Comment number 78.

    75% tax on top earners, brilliant idea. We need that here with a land tax to curb the excesses of Lord Snooty and his greed driven mates!

  • rate this
    +1

    Comment number 77.

    On the face of it, it looks a ludicrous suggestion. But then some of the salaries being paid are as stupid as well.

  • rate this
    -1

    Comment number 76.

    Any time the government feels entitled to 50% or more of your income it is time to move. At that point, you are not taxing people, you are punishing them! If everyone paid the same rate regardless of income level and no other deductions, loopholes, etc were allowed you would have a fair system and the rich would be paying far more than they will ever get out of the system.

 

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