France’s rich keen to pay more tax as PM Fillon announces ‘rigour package’

Sixteen wealthy French citizens have signed a petition As a group of France’s wealthiest citizens, including L’Oréal heiress Liliane Bettencourt , take up the call for a tax on the rich, François Fillon, the French prime minister, announced on Wednesday a “rigour package” to cut the country’s deficit and save €11bn (£9.7bn). The 16 business executives and wealthy individuals signed a petition calling for an “exceptional contribution” by the country’s richest citizens as a measure to help France drag itself out of the economic crisis that his hit the eurozone countries. The idea follows a similar suggestion from the American billionaire Warren Buffett, which has been picked up and supported by Maurice Lévy, the influential head of the advertising and marketing group Publicis, and Pierre Bergé, founder of the fashion house Yves Saint Laurent. Buffett had criticised the fact that he was paying less tax than many of his employees. The letter on the website of the French news magazine Le Nouvel Observateur was signed by some of France’s leading businessmen, including Christophe de Margerie, of the oil group Total, Frédéric Oudea, head of France’s second biggest bank Societé Générale, and Jean-Cyril Spinetta, president of Air France-KLM. Bettencourt, 88, France’s richest woman, with a fortune estimated at €17bn (£15bn), also put her name to the petition. The measures in the rigour package, dubbed by some the “financial turn of the screw”, include: • an “exceptional contribution” of 3% on taxable earnings for those earning above €500,000 to remain in place until France’s deficit had been reduced to 3% of GDP. • an increase in tax on tobacco and alcohol • a modification of capital gains tax on property Fillon also spoke of a “harmonisation” of taxes on businesses and companies between France and Germany. He said growth predictions for 2011 were down to 1.75% (from 2%) and 1.75% for 2012 (0.5% less than originally forecast). In the letter to Le Nouvel Observateur, the 16 signatories said: “We, presidents or company leaders, businessmen and women, bankers, professionals and wealthy citizens, would like an ‘exceptional contribution’ imposed on the most fortunate French taxpayers. “We are aware that we have fully benefited from the French model and European environment to which we are attached and that we want to help preserve them. This contribution is not a solution in itself: it should be part of a more global effort of reforms affecting [public] spending as well as [tax] revenues. “At a time when the public finances deficit and the prospect of a worsening state debt threaten the future of France and Europe, and when the government is asking everyone to show their solidarity, it seems necessary for us to contribute to this.” Any tax on the country’s wealthiest citizens would be imposed for a limited period, probably about two years, said analysts, and would target those considered the richest personally and not the companies for whom they work. France has promised to rein in its public deficit in previous years but without success. The eurozone sovereign debt crisis has prompted it to announce plans to trim its public deficit to 5.7 % this year, 4.6 % next year and 3% in 2013. Among other measures, Nicolas Sarkozy, the French president, is reported to be considering the abandonment of tax-free overtime for workers. This was one of the financial measures that under the slogan “work harder to earn more”, was a pillar of his election campaign in 2005, but has cost the government an estimated €4.5bn in lost revenues. The government is also looking at ending tax breaks for companies. Having recently abolished the “financial shield”, which set a limit on the total amount of tax the rich were expected to pay, a new tax on the wealthy would avoid accusations his austerity measures would hit those lower down the income scale and small businesses hardest, in the run up to next year’s presidential elections. France and Germany are also discussing proposals for a tax on financial transactions, a measure that is vehemently opposed by Britain. France Europe Europe Tax and spending Nicolas Sarkozy Warren Buffett Euro European monetary union Financial crisis Tobin tax Kim Willsher guardian.co.uk

Posted by on August 24, 2011. Filed under News, Politics, World News. You can follow any responses to this entry through the RSS 2.0. You can skip to the end and leave a response. Pinging is currently not allowed.