France’s rich: tax us more

Wednesday, 24th August 2011, 5:21pm

Nicolas Sarkozy and Francois Fillon are delivering emergency economic measures today, in order to ward off the ravening credit rating agencies that are questioning France's AAA rating. As a prelude to this act of political drama, a group of France’s super-rich sent a letter to the government urging it to tax them more. In the spirit of solidarity, they said, they were willing to make a “special contribution” to ensure that France’s budget deficit was brought under control.

This Gallic gesture might surprise some Anglo-Saxons and it's rather touching. But it's is pre-emptive in many ways. The rich are likely to be asked to lie back and think of France and the letter has the air of an affirmation of consent. Up until now, the French government has resisted the temptation to introduce large tax increases to reduce the deficit, but strong headwinds have forced it to change tack. The indications are that the government will raise an extra 14 billion euros over the next two years. Much of that new revenue will come from the introduction of a special tax on those earning more than 1 million euros (£900,000) a year, although precise details remain unclear. Tax breaks and loopholes are also expected to be closed, which will further disadvantage the wealthy.

The markets eyes, however, are likely to be on growth. France’s plan has relied on growth forecasts of 2 per cent this year, which has proved elusive. Some observers expect Fillon to downgrade his forecasts ahead of the official 2012 budget, which will be unveiled next month.

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sym

August 24th, 2011 5:39pm Report this comment

They might find out that taxing more will lead to no growth and no extra revenue. What will they do then?

The Western economies are already immensely taxed. This tax-and-spend model isn't working.

Paul Danon

August 24th, 2011 6:14pm Report this comment

Craziness. The best thing the rich could do for France (or for any country) would be to spend some money. This should give employment and hopefully generate real wealth. They could also invest their money, also helping enterprise. The last people to get their hands on the money should be the government, who will shovel it into civil servants' salaries and pensions, and into unprofitable parts of the economy.

Yow Min Lye

August 24th, 2011 7:34pm Report this comment

Les Grandes Riches have no more intention of paying the higher taxes they are calling for than the French state has of obeying the deluge of burdensome EU directives it usually trumpets as being necessary.

It's something to do with the purpose of language being to obscure thought (as one of their forebears once noted).

In2minds

August 24th, 2011 7:49pm Report this comment

France's super rich, I've a better idea. They pay twice as much for the proposed aircraft carriers and leave us out. Perhaps even leave us alone?

TrevorsDen

August 24th, 2011 10:09pm Report this comment

The French super rich ? Wot all of them? Even the ones living in Monaco??

AliC

August 24th, 2011 11:41pm Report this comment

hahahaha champagne socialists always say they'd pay more tax. But they don't have to... it's us working wage slave mugs who pay more.

They should give their money to charities setting people up to start small businesses, or mentor small businesses, or just shut the * up and spend more to help the little people.

reduce tax rates: get more tax revenue as it stimulates economic activity.