New Extra Tax on France’s Highest Earners

August 19, 2011 Taxation in France

tax on MillionaresThe government of France is investigating means to raise tax revenues in order to put a reign on the national budget deficit, with a new tax on the highest income earners being seen as a viable option.

In a press interview to the local media made on August 19th in Paris the Minister of the Budget of France Valérie Pécresse said that new tax measures will be implemented for individual taxpayers, with a raised rate for the country’s highest earners.

The Minister revealed that a working group has already been created to study the potential effects and to estimate realizable revenues from an extra tax to be instated on individuals’ earning in excess of EUR 1 million. It is currently being decided whether the new tax will be charged directly on the individuals’ earnings, or as a levy on the company that is paying their salary. Valérie Pécresse added that there are approximately 30 000 taxpayers in France who would be affected the proposed tax.

Alongside the extra tax obligations for the highest income earners, the government is also planning to roll back a number of currently available tax exemptions, primarily affecting middle and high income earners.

The combined tax changes are aimed at complementing the country’s current deficit reduction efforts, which also include government spending cuts. France has already vowed to slash its budget deficit to 5.7 percent of GDP in 2011. The deficit is projected to be cut to 4.6 percent of GDP in 2012.

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