Leading French presidential candidate promises 75 per cent income tax

01 March 2012

Francois Hollande, the Socialist candidate for France's coming presidential election, has announced plans to raise the top rate of income tax to 75 per cent on annual incomes above Euro1 million.

The threat confirms the worst fears of the country's wealthy, who according to some sources are queueing up at the Swiss border at the thought of France's first Socialist president since Mitterand in 1981. According to Reuters, there has been a sudden rise in the number of French residents asking their wealth advisers about tax exile.

Current opinion polls put Hollande well in the lead, and suggest the final stand-off for the presidency on 6 May will be between him and Nicolas Sarkozy. A third candidate, the centrist politician Francois Bayrou, is expected to be eliminated in the earlier round on 22 April.

Hollande's campaign had previously only promised to impose a 45 per cent tax on income above Euro150,000. His new platform suddenly emerged only this week, after he decided that paying income tax at 75 per cent would be a patriotic gesture appropriate for those earning indecent incomes. The Sarkozy government has used similar language to describe the ISF wealth "solidarity" tax.

Hollande also said he would remove the ceilings on tax rates introduced by the Sarkozy government in 2008. Sarkozy has already dismantled the tax shield (bouclier fiscal) scheme that he himself introduced in 2007 and that until last year limited a French taxpayer's liability to half of his annual income.

A further move in a Socialist presidency will be to raise capital gains tax rates to match income tax rates.

Hollande also supports the idea of a Europe-wide 0.5 per cent financial transactions tax (FTT). But in that he is little different from other French politicians, who collectively recognise that FTT levies will weigh much more heavily on London than they do on Paris or even Frankfurt.

 

Sources

 

Tax-News

BBC

Swissinfo (via Armees.com)

Reuters

 


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