France plans to up tax on rich
Published September 12, 2012
French citizens, those whose income is over one million euros, or just over one and a quarter million dollars, will soon be taxed at a rate of 75 percent.
Many economists have said the rich tax will not do much to boost depressed state coffers because only 3,000 of France's 66 million citizens make over a million (euros), and that the move is just symbolic.
In fact, the tax hike was the campaign promise many believe won the election for President Francois Hollande who has said he doesn't like the rich.
The move seems to have garnered massive public support. At the Peugeot-Citroen plant just outside of Paris, workers said they favored the rich paying more. Union Leader Jean-Pierre Mercier told Fox News, “It’s not all, AT ALL, sufficient,” he said. “We should take more of their wealth.”
Even among residents around the posh Place Vendome area it is hard to find anyone against the tax.
"It's a good idea. If you have money, you can pay taxes," one woman said, echoing the sentiments of several others.
A comment on the new super tax from a member of the socialist policy was immediately available.
But Gilbert Cette, a professor of economy, said, “I think it’s a good thing. In France we have to do a lot of very strong and very huge fiscal efforts to be able to respect our commitments, our European commitments to a 3 percent of GDP deficit.”
Opposition lawmakers said the tax has sent a signal to the rich and the aspirational.
Former Budget Minister Valerie Pecresse told Fox News in a meeting at the Assemblee Nationale that the tax sends a bad signal to the youth of France.
"If you want to succeed, if you want to be an entrepreneur, and work very hard, then go away," Pecresse said.
She and others have said the move stigmatizes the rich, and that its almost more the attitude towards wealth that hurts than the extra tax itself.
At the height of the controversy surrounding the super tax on the rich, news broke out that Bernard Arnault, France's wealthiest man and founder of the luxury goods empire that includes Louis Vuitton, had applied for Belgian citizenship. Arnault has denied it's a tax dodge, nevertheless the move prompted some to accuse him of treachery.
Jerome Barre, who advises the wealthy on tax matters, called the new tax the end of democracy, and said half of his clients were thinking of fleeing France.
"It's an insult. They consider they are good taxpayers. They have companies, businesses and they are working hard. The context is difficult, but they are not the source of the crisis," Barre said.
The rich are already getting hit at over 50 percent when all the various levies in the system are folded in.
Hollande said the new rich tax should only be in place for a couple of years -- until France’s budget gets back on its feet.
While most French citizens' taxes are about to go up, those hit with the biggest increase want to know why the government doesn't spend less rather than tax its citizens more
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