Economy Lab

Please tax us, French super-rich tell government

PARIS — The Globe and Mail

French President Nicolas Sarkozy is already planning to axe some tax exemptions that benefit the wealthy as he tries to squeeze some €5-€10 billion in extra revenues in the 2012 budget. (Michel Euler/Michel Euler/Associated Press)

Some of France’s richest people, including the billionaire heiress of L’Oreal SA and the head of oil major Total SA, urged the government to tax them more to help solve the country’s financial problems.



In a petition published on the website of weekly magazine Le Nouvel Observateur on Tuesday, 16 company executives, business leaders and super-rich individuals called for the creation of a “special contribution” that would target wealth without forcing the rich to quit France for overseas tax havens.

Story continues below ad


The petition, whose signatories included L’Oreal heiress Liliane Bettencourt and Total chief Christophe de Margerie, follows a call by U.S. billionaire Warren Buffett for U.S. authorities to raise taxes on himself and other ultra-high earners to contribute to austerity efforts.



In France, President Nicolas Sarkozy is already planning to axe some tax exemptions that benefit the wealthy as he seeks some €5-billion ($7.2-billion) to €10-billion in extra revenue in the 2012 budget following a market rout that has highlighted concern over French public finances.



Budget Minister Valerie Pecresse said this month the government was working on a new contribution from taxpayers earning more than €1-million a year.



“We are conscious of having benefited from a French system and a European environment that we are attached to and which we hope to help maintain,” said the petition, signed by chief executives including Maurice Levy of advertising company Publicis Group SA, Frederic Oudea of bank Société Générale and Jean-Cyril Spinetta, president of Air France KLM SA.



Gilles Carrez, a member of the parliamentary budget committee for the ruling UMP party, has said that a levy of 2 per cent on those with annual revenue of more than €1-million would affect some 30,000 people and would bring in about €300-million for state coffers.



Mr. Sarkozy, who faces a battle for re-election in April, initially planned to raise an extra €3-billion next year by clamping down on tax breaks as he seeks to trim the 2012 deficit to 4.6 per cent of gross domestic product from a forecast 5.7 per cent this year.



But weak second-quarter economic growth, together with Standard & Poor’s downgrade this month of its credit rating for the United States, have convinced Paris it needs to act more urgently to shore up its AAA rating, crucial for the stability of the euro zone as it wrestles with its debt crisis.



“When the public finances’ deficit and the prospects of a worsening state debt threaten the future of France and Europe and when the government is asking everybody for solidarity, it seems necessary for us to contribute,” the petition said.

Follow us on Twitter: @GlobeBusiness