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Article published the Sunday 06 January 2013 - Latest update : Sunday 06 January 2013

New French super-rich tax to be introduced by autumn

Jérôme Cahuzac, the French Junior Budget Minister.
Reuters/Philippe Wojazer


The French government will introduce, by autumn, a new tax for incomes over one million euros a year to replace an original law for a 75 percent tax rate that was struck down by the country’s highest court.

The declaration came as French actor Gérard Depardieu received his Russian passport as part of a row with the government.

Jérôme Cahuzac, the Junior Minister for the Budget in the French finance ministry, told French media on Sunday the new tax will be part of this year’s finance law, which presents the revenues and expenses of the French state.

If approved, the tax will be included in the government’s budget for 2014.

“We have, with [Finance Minister] Pierre Moscovici, received a mandate to suggest something that will be accepted by the government and be discussed by the parliament,” he said in a televised interview with media outlets Europe 1, i-télé and the newspaper Aujourd’hui en France.

“I can’t say today when the new finance law will go before parliament…[but] by next autumn at the latest,” he continued, adding the government would like to see any approved measure be applied as son as possible.

A 75 percent tax on incomes over one million euros was one of President François Hollande’s key election promises, and formed the centrepiece of France’s 2013 budget.

But the Constitutional Council ruled late last month the law was unconstitutional because it was calculated on individuals rather than households, thus creating inequality.

It is not clear whether the new law would maintain a tax rate of 75 percent, but the Prime Minister, Jean-Marc Ayrault, has said the government is committed to that figure.

Cahuzac also left opened the possibility of the tax being a permanent measure.

“I think it can be one of the factors to be considered: either it can stay temporary – two years – like the rejected measure, or it can be for the whole [of the government’s] term, or why not extended [it] and become an ongoing measure,” he said.

The tax on the super-rich has prompted high profile people such as Depardieu to threaten leaving France and avoid the tax.

There has also been a spike in the number of people applying for residency and citizenship in Belgium, where the tax rate is lower.

Cahuzac also repeated the message that 2013 will be a difficult year for the country’s finances.

“We are asking for a considerable effort in 2013. Fiscal reform has been voted on and I think we can’t ask any more from our taxpayers,” he said.

tags: Belgium - France - François Hollande - French politics - Gérard Depardieu - Jean-Marc Ayrault - Jérôme Cahuzac - Law - Parliament - Robin Hood tax - Russia - Tax
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Comments (4)

France's socialist measures

France's socialist measures are a joke and so detrimental to any hard working man or woman. Take my son, he is a hard working young man that has set himself up as 'Auto-Entrepreneur' which allows him to earn 32K€ per year at the lower rate tax of 23%. He has just been informed, that figure will be lowered to 19K€ per year, after that, he must pay the higher tax rate. Where is the incentive to work hard? For those who want to work hard, there is no incentive. The hard workers break there backs for lasy b****** that want to sit around and claim dole where they receive up to 80% of their salaries. This particular French government are a disgrace and I can only one way this country is heading, down, down, down. I think it's time for us hard workers to seek pastures greener!!!!

I live in France and I lament

I live in France and I lament these measures. They appear, as one of the contributors below has suggested, a populist measure. I believe they are also a measure of the parlous state of the French economy, which is in a state of steep decline.

My concern is that if the present state of affairs continues, public unrest will follow the implementation of increasingly severe austerity.

Sadly, I don't see any way out. France continues to define itself as a manufacturing country and it is difficult to see why anyone would invest in a country with irresponsible unions, low productivity and laughable work practices, all egged on by a desperate socialist government.

In my opinion Francois

In my opinion Francois Hollande proposed the new law to gain popularity, of the majority which would not seem to be affected by the new tax law. However, this new law will drive inversors away, and wealthy business men it will also drive away people with talent and potential, because it creates a negative environment for people with high business objectives and potential. Wealthy French citizens will leave the counrty, and the less fortunate are the ones that will suffer. With less business activity the French economy will suffer, there will be less jobs, less disposable income to spend and therefore a decrease in economic growth and the quality of life...eventually it backfires.

French socialists are the

French socialists are the most ideologues in Europe, they have not chosen the modernity that the British Labor Party and German SDP have embraced to make necessary reforms.

The three huge economic mistakes the French socialists have committed and have ruined France with the thirty year of unemployment of 10%.

Nationalization of big private enterprises.

Reduction of work time to 35 hour-week long in hope of sharing the work to the unemployment.

Tax-hikes will drive the wealthy to move to the neighboring countries. After all, they are supposed to become more Europeans and the European spirit is encouraged.

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