May 23, 2013
France Unveils ‘Combat’ Budget
Posted on Sep 29, 2012
French President Francois Hollande announced a $47 billion economic recovery plan Friday that will raise more than $25 billion from tax increases with the help of a 75 percent “supertax” on incomes of more than $1.3 million a year.
Hollande asked French households and large businesses to please not leave the country for lower taxes elsewhere and instead play their dutiful role in an “unprecedented effort” to restore the country’s economy. Jean-Paul Agon, CEO of cosmetics company L’Oreal, was one of many business leaders who complained the “supertax” would drive people who value their luxury over the well-being of their fellow citizens into tax exile.
Although it’s unlikely to impress much of the nation’s rich, almost $13 billion in cuts to pensions and state salaries will ensure the less well-off share some of the burden of recovery. That burden will be split 50-50 from 2014 onward, the government said.
The 75 percent tax rate is expected to hit only 2,000 taxpayers. Sometime in the future, a tax of 45 percent will be introduced for those earning more than $190,000 a year.
—Posted by Alexander Reed Kelly.
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