French govt to re­view tax on high-earn­ers

Global Times - - WORLD - Page Ed­i­tor: wang­[email protected]­al­times.com.cn

The French gov­ern­ment will con­sider bring­ing back a tax on high earn­ers which Pres­i­dent Em­manuel Macron abol­ished early in his pres­i­dency, a key de­mand of “yel­low vest” pro­test­ers who have been block­ing roads and fuel de­pots for weeks, of­fi­cials said Wed­nes­day.

“If some­thing isn’t work­ing, we’re not dumb, we’ll change it,” gov­ern­ment spokesper­son Ben­jamin Griveaux said on RTL ra­dio, though “the is­sue is not on the ta­ble for now.”

End­ing the ISF “wealth tax” on high earn­ers was a key part of Macron’s pro-busi­ness pres­i­den­tial cam­paign, seen as a way of en­cour­ag­ing peo­ple to in­vest and hire in France.

The goal was also to stem an ex­o­dus of mil­lion­aires and bil­lion­aires to­ward coun­tries with lower tax bur­dens such as Bel­gium or Lux­em­bourg.

The levy ap­plied to around 350,000 French house­holds whose com­bined as­sets ex­ceeded 1.3 mil­lion eu­ros ($1.5 mil­lion).

In cut­ting the tax Macron was bring­ing France in line with most other wealthy na­tions, which be­gan end­ing such taxes in the 1990s.

But abol­ish­ing it cost the gov­ern­ment an es­ti­mated 3.2 bil­lion eu­ros in an­nual tax rev­enue.

The ISF was re­placed with a less oner­ous tax on prop­erty hold­ings with a com­bined value of more than 1.3 mil­lion eu­ros – though it ex­cluded in­vest­ments in prop­erty shares.

Left-wing crit­ics and la­bor unions have said the tax cut for the rich was par­tic­u­larly galling since Macron’s gov­ern­ment has raised taxes or cut ben­e­fits for pen­sion­ers and oth­ers at the lower end of the so­cial lad­der.

The “yel­low vest” move­ment, which orig­i­nally erupted over anger at fuel tax in­creases, has bal­looned into a wider protest over ris­ing costs of liv­ing and a per­ceived dis­re­gard by Macron for the prob­lems fac­ing ru­ral and small-town France.

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