Bloomberg News

Hollande Won’t Raise French Taxes Further, Budget Minister Says

January 06, 2013

Hollande Won’t Raise French Taxes Further, Budget Minister Says

French President Francois Hollande, left, listens to Budget Minister Jerome Cahuzac after a meeting with French government's ministers, focused on France's economic situation and employment at the Elysee presidential Palace in Paris on on Jan. 4, 2013. Photographer: Miguel Medina/AFP/Getty Images

France won’t introduce any further tax increases for the rest of President Francois Hollande’s five-year term because companies and individuals need “predictability” on their fiscal obligations, Budget Minister Jerome Cahuzac said today in a radio interview on Europe 1.

The government will present revisions to its plan on taxing the very rich by this autumn, after the Constitutional Council struck down the 75 percent tax on incomes over 1 million euros ($1.3 million) on Dec. 29, Cahuzac said.

The court “didn’t condemn the idea but the way it was being implemented,” he said. The government wants “to incite a bit more prudence and decency in a few very rare executives” to encourage companies to reduce the pay gap between management and workers.

Cahuzac didn’t specify whether the new tax on the rich will be limited to two years as the previous one was, saying that it “could” last for Hollande’s full term. Hollande took office in May last year.

Cahuzac maintained the 0.8 percent growth forecast for the French economy this year, saying the government’s discipline in sticking to its budget means the goal is “feasible.” He reiterated Hollande’s statements yesterday that while the state will help find a buyer for a Petroplus Holdings AG oil refinery, nationalization isn’t an option.

Cahuzac also refuted a French press report that he has a Swiss bank account, saying “I deny it in whole and in detail.”

To contact the reporter on this story: Heather Smith in Paris at hsmith26@bloomberg.net

To contact the editor responsible for this story: Vidya Root at vroot@bloomberg.net


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