Super-rich French face tax hike if Hollande wins power

Socialist front-runner in presidential race seeks to seize political agenda on eve of visit to London

John Lichfield
Wednesday 29 February 2012 01:00 GMT
Hollande said the super-tax would be an act of 'social justice' and 'patriotism'
Hollande said the super-tax would be an act of 'social justice' and 'patriotism'

The French presidential front-runner, François Hollande, has threatened a 75 per cent tax on the income of the super-rich, setting off a political storm on the eve of a one-day London visit today.

In a spectacular gesture towards left-wing voters, the moderate Socialist candidate said that he would impose the tax hike on marginal earnings over €1m if he is elected President on 6 May.

The proposal, which took even some of Mr Hollande's senior supporters by surprise, was intended to wrest momentum from President Nicolas Sarkozy, who has been throwing out new initiatives daily since he entered the race two weeks ago.

The Socialist candidate, still the clear favourite in fresh polls published yesterday, said that a super-tax on those earning "100 times the minimum wage" would be an act of "social justice" and "patriotism".

Opponents condemned the 75 per cent tax band as an "absurd" idea, dreamt up "on the hoof" for electoral gain, which would raise little extra revenue and drive wealth creators out of France. President Sarkozy accused Mr Hollande of "improvisation" and "amateurism". "Not a single other politician in the world, not one, thinks this is a good idea," he said.

The "75 per cent" super-tax would make France the least comfortable place to be rich in the European Union. At most, 30,000 people, and maybe as few as 6,000, would be affected.

The high tax rate would apply only to those earning above €1m (€2m for married couples). Earnings up to those ceilings would be taxed on a sliding scale of up to 41 per cent.

It was not entirely coincidental that Mr Hollande, 57, made the proposal on the eve of today's visit to London. In his first big campaign rally in January, the Socialist candidate delighted hard-left voters by saying that his "real opponent" was the "world of finance". In a conversation with British and American journalists two weeks ago, Mr Hollande moderated his language.

He said that he planned to curb the "excesses" of the financial markets – in much the same way that President Barack Obama did – but that the City of London need have no exaggerated fears of a Hollande presidency.

The Socialist candidate will attempt to reconcile the two sides of "Hollandisme" – the "enemy" of big finance and the pragmatic and moderate politician – when he gives a speech at King's College London this afternoon. Earlier, he will have talks, and lunch, at the Palace of Westminster with the Labour leader, Ed Milliband, and members of the Shadow Cabinet. In the evening, he will address members of the 300,000-strong French community in London.

Mr Hollande had also requested a meeting with David Cameron, who endorsed President Sarkozy's re-election attempt when he visited Paris 10 days ago. Downing Street said that the Prime Minister would "not be available".

Three new opinion polls published yesterday went some of the way towards clearing the confusion caused by divergent first-round polls last week. Both showed that President Sarkozy had narrowed Mr Hollande's lead for the first round of the election on 22 April but that the Socialist challenger was still on course to win the second round by a landslide.

In one poll yesterday, by Ifop, Mr Hollande's first-round lead was cut to 1.5 percentage points (28.5 per cent to Mr Sarkozy's 27 per cent, with other candidates trailing far behind). Two other polls, by Sofres and Ipsos, gave Mr Hollande a 4.5-point and two-point first-round lead.

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