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 155.

    With taxes so high, how are you supposed to create jobs? Inefficient government jobs? Lower taxes on the rich and you give people incentives to start small businesses, invest and hire workers. This supports the middle class. More government revenue can be generated this way then by heavily taxing the rich.

  • rate this
    -1

    Comment number 154.

    Somebody needs to point out to Mr Hollande that what the French pay in tax is decided by the Germans !

  • rate this
    +1

    Comment number 153.

    This is not a wealth tax! if we want greater fairness the challenge is re-distribute wealth, freeing up locked assets, rather than focus on income. High earners are either spending surplus money, which is in fact good for the rest of us, or they are stashing it away - which a wealth tax - an annual levy on property, savings and investments, would tackle.

  • rate this
    +1

    Comment number 152.

    Hey guys, I'm writing from the States but honestly I think 75% tax is absurd. You have to take that exodus theory into account. Anyone making 1,000,000 euros a year is more likely than not doing a good thing bringing business to France. You don't want those people leaving the country. Plus, it's pure political rhetoric for votes in troubled times. Cut unnecessary spending and don't attack anyone.

  • rate this
    -2

    Comment number 151.

    123.Duke

    To root out the Socialists, we should have each day at a set time a broadcast.
    It should be made compulsory that all employers must give time for all employees to watch.
    It should be called '' Ripping Yarns'' its should show the worst Socialist idea
    which will mean Ripping off the workers. I would start with 26 K benefit cap !
    I wonder if productivity would go up or down !

  • rate this
    -1

    Comment number 150.

    A very interesting measure of patriotism. Indeed as over 50% of the US population pays 0%, would Hollande say it is a nation consisting of mostly unpatriotic citizens?

  • rate this
    0

    Comment number 149.

    Funny how of all the news stories to pick this is the story the BBC is inviting comments on - maybe the cadres running the BBC thought they would see loads of support for the policy on the comments page - so they can say that the same thing would win huge support in the UK.

  • rate this
    +2

    Comment number 148.

    This article is VERY misleading.. I watched the programme and he never said they should pay 75% of their earnings in tax, he said there should be an additional band with a rate of 75% on earnings over 1m. That's a big difference ! In reality; with his new scheme, someone who earns 1m would still pay the same as now. The tax only kicks in after that..

  • rate this
    -3

    Comment number 147.

    140. QPR4Me

    It has indeed failed wherever its implementation was attempted. As has Capitalism. Which is why it deems it necessary to start wars, and impose dictators in lands far from you or me, where the real wealth producing opportunities lie.

  • rate this
    +2

    Comment number 146.

    It's a big economic gamble - but if that's what the French public choose, that's their choice. If it works, we can do the same without fear of losing our highest-earning taxpayers. If it backfires, we'll know not to make the same mistake.

    ... although given Hollande's reckless support for a unilateral French financial transactions tax, I suspect he's not thinking things through.

  • rate this
    +2

    Comment number 145.

    Yes, let's start a class war about taxes rather than debating why we have taxes in the first place. Our monetary policy is the root cause of this. We're all using a debt based currency and our taxes are little more than interest payments to banks. What we're witnessing here is the parasite destroying the host and most of you are arguing about the fair share of food to give the tapeworm?

  • rate this
    0

    Comment number 144.

    It would be much better to raise taxes on capital gains to those on income and eliminate loopholes. This will ensure everyone pays their share and the working rich are not faced with draconian tax increases while investors and bankers pay next to nothing. It's also important to limit the growth of healthcare and education costs to near inflation levels. Anything else is pretty much populism.

  • rate this
    -1

    Comment number 143.

    A 75% tax rate would amount to a government induced compulsory "philanthropy scheme".

    Many corporate earners avoid or evade tax in many inexplicable ways even within the civil service.

    The French should start by making their tax system more robust, with few or no loopholes, this would negate the need to stifle innovation and entrepreneurship by introducing a 75% tax rate. A balance is required.

  • rate this
    0

    Comment number 142.

    Salary envy is fabulous to watch....and I just love the way figures are pulled out of the air by all. Here's a few to wrestle with.... Pay tax based on your lifetime earnings, assets, property and kids. Pay tax based on intelligence level - the higher your IQ the lower your tax as you will contribute more to society/economy (would mean pretty high taxes for quite a few contributors here today..)

  • rate this
    -1

    Comment number 141.

    135 Duke: NO it does not follow that..
    All tax is not theft.

    I started a business with three other founders, borrowed a sackful from a prominent VC, paid the extortionate "management fees" and interest, signed away our houses on 100% Sh** or bust strategy.
    On exit we paid vast amounts in TAX - justifiably so!
    Also employing 100 people in four EU contries on average of 60K €

  • rate this
    0

    Comment number 140.

    Typical socialist twaddle. If Hollande gets in and enacts this policy, the real movers and shifters in the French economy will leave and take their ideas and money with them. Socialism is a proven failure everywhere it has operated. If this man gets in, France will fall and Germany will be left to bail out another lame duck, or will be forced to go it alone while the euro project dies.

  • rate this
    +1

    Comment number 139.

    A 75% tax on the highest earners will solve nothing. How about increasing the French work week, trimming a few of the benefits, and perhaps even creating incentives for companies who bring work back to the nation.

  • rate this
    +2

    Comment number 138.

    The rich and successful have usually got where they are by exploiting someone else so why is it so unjust to expoit them back?

  • rate this
    -1

    Comment number 137.

    I only pay 5% of income tax, so 75% is too fascinating with me.

  • rate this
    +1

    Comment number 136.

    I take it Mr Hollande isn't expecting to win the Presidential election then?Announcing idiotic policies like that is one sure way of him NOT winning thats for sure.The mind boggles as to where these idiots get their ideas from.As others have said,if enacted,stand by for an influx of rich french settling/spending here.It'll help us out with our deficit if nothing else.

 

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