French govt to review tax on high-earners

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.