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
    +2

    Comment number 175.

    Re 170 "Incidentally, why 3 Editor's Picks among the top ten least popular, pro-tax comments, and only one on the other, sensible, side? BBC bias rampant again!"

    Think about it.
    Editor makes picks. Then people rate them. Doh!

  • rate this
    +9

    Comment number 174.

    Hollande is one of the most misguided and dangerous French politicians to have emerged in a long time. Yesterday, he announced measures that would make it very difficult to close factories - thereby guaranteeing that no manufacturer will open a new factory in France but will go elsewhere instead. And now this? His election would mean the death of the French economy.

  • rate this
    +1

    Comment number 173.

    The truth is, France's Socialist party is so far to the left, it would make even Labour look like rabid right wingers

  • 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
    -6

    Comment number 171.

    That’s why it’s always been touchy. 75% seems like it could stifle innovation. investment. You don’t want that. If anything 60-65 is OK.

  • rate this
    +2

    Comment number 170.

    A nonsense proposal from a stupid leftie politician. The French will see through this for the electioneering that it is. But if it does ever become enacted, we'll welcome the rich and successful French high-earners to our brilliant capital.

    Incidentally, why 3 Editor's Picks among the top ten least popular, pro-tax comments, and only one on the other, sensible, side? BBC bias rampant again!

  • rate this
    +2

    Comment number 169.

    This guy is brilliant.

    What he really wants is for all the people smart and lucky enough to make that kind of money to move out of the country so that the lower and middle income classes will have to fully depend on government for survival.

    If the people making money leave, so will jobs. These people are the job creators and the spenders. He will collapse the French economy.

  • rate this
    +4

    Comment number 168.

    Madness. Sounds like a return to the bad old days of the 70's.

  • rate this
    +2

    Comment number 167.

    Our highest rate of tax was under the labour government of 1974, at 83% for direct income with a further 15% surcharge for investment income, a total of 98%. They still managed (or mismanaged) the economy badly enough that we were restricted to £50 spending money for any foreign holidays.

  • rate this
    +1

    Comment number 166.

    Even if richest people dont change citizenship,they lose their passion to earn money and run their business in France. And poor will not be stimulated to do their best because there are some boys who will pay for them. The tycoons pay much more taxes than you even if your tax rate is equal.

  • rate this
    -2

    Comment number 165.

    This the way forward - imagine we could cap footballer salaries by state directive. Perhaps they would go for share options instead?

  • rate this
    0

    Comment number 164.

    The gasp between rich and poor has been and is growing across Europe and while many on that level of salary do create jobs and make a difference to the economy that would warrant less taxes. There are many with big salaries because of the position or industry they are in that arguable do nothing to justify it.
    If the trend does not change we could once again be living in the 19th century!

  • rate this
    +3

    Comment number 163.

    As an American, 50% tax is inconceivable. 75% would cause all-out war.
    Actually, 50% would likely cause all-out war.
    The average American pays around 28% in taxes, and they scream all day over that. The rich pay closer to 15%, and sometimes less, and believe they should be paying even less, because they are "job-creators" a new catch-phrase, here.

  • rate this
    +2

    Comment number 162.

    How has this article not been corrected/updated yet? Hollande _never said_ the income of high earners would be taxed at 75%. The 75% rate would only kick in after the 1.000.000€ threshold, meaning you'd still be taxed with the same rate(s) as before for the first 1.000.000€ you make. Say you make 1.500.000€, you'd be taxed at the current rates for 1.000.000€ and at 75% for 500.000€.

  • rate this
    0

    Comment number 161.

    Looks like Brad and Angelina's house will be on the market if this guy gets elected.

  • rate this
    0

    Comment number 160.

    Disincentivise growth, cause the richest to leave, basic misunderstanding of the entire history of macroeconomic theory.

    Idealists... Wow.

  • rate this
    +1

    Comment number 159.

    A good one from the champagne socialists. And multi millionaire Strauss-Kahn was also going to be their leader. A millionaire socialist?
    What a thing to believe!

  • rate this
    +2

    Comment number 158.

    Its not the amount of money people earn we should be looking at, it should be to close all tax loopholes that allow the wealthy to avoid paying tax. The biggest problem here is wealthy people moving their money abroad to avoid tax.

  • rate this
    0

    Comment number 157.

    Socialism fails - always - because it rewards mediocrity and punishes success. If Hollande and his gang have their way, everyone loses. High-achievers, instead of expanding businesses that pay taxes and provide employment, will look to other options: Hire accountants to find tax loopholes; stop working/investing; move elsewhere. Leveling has never worked and it never will.

  • rate this
    0

    Comment number 156.

    Remember the 95% tax rate in the UK? We lost our most talented people, AND we lost ALL tax revenue from them. The Russians reduced their tax rate to a flat 13% a few years ago, and guess what, more people paid tax as it encouraged people to pay their tax and remove incentives to avoid payment. A 75% tax rate will result in less tax receipts for the French Revenue service.

 

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