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Macron fights 'president of the rich' tag after ending wealth tax
October 3, 2017 / 6:41 PM / 18 days ago

Macron fights 'president of the rich' tag after ending wealth tax

PARIS (Reuters) - President Emmanuel Macron fought off accusations of favouring the rich on Tuesday after making good on a campaign pledge to scrap France’s wealth tax - a symbol of social justice that has scared off thousands of millionaires from French shores.

FILE PHOTO - France's President Emmanuel Macron attends the European Union Tallinn Digital Summit in Tallinn, Estonia, September 29, 2017. REUTERS/Ints Kalnins

Macron’s move to replace the tax with a levy targeting only real estate in last week’s 2018 budget was used by political opponents to brand him the “president of the rich”, a label the ex-Rothschild banker has been struggling to shake off since taking office in May.

In a visit to a Whirlpool factory in his native town of Amiens, scene of a showdown six months ago with his then far-right challenger Marine Le Pen in the presidential election contest, Macron defended the policy.

“It’s all well and good to want to spread wealth, but you first need to produce, to create wealth before redistributing, that’s how it works,” he told journalists.

After many European countries abolished their own, France was left as the only EU member with a wealth tax, a charge introduced by the Socialists in the 1980s which was levied on individuals with assets above 1.3 million euros (1.13 million pounds).

That led to thousands of rich French families to move to countries such as Belgium to avoid paying the tax, including most famously ‘Green Card’ actor Gerard Depardieu and members of the Mulliez family, owners of the Auchan supermarket chain.

Prime Minister Edouard Philippe has estimated some 10,000 people with 35 billion euros worth of assets left in the past 15 years.

But coming after the government’s decision to cut a housing allowance enjoyed by millions of poorer French people, the move on the wealth tax - which will cost the treasury 3.2 billion euros in lost revenue - has sparked outrage in opposition ranks.

“The better-off will be those who get richer while they sleep,” former Socialist finance minister Michel Sapin said, quoting late president Francois Mitterrand, who introduced the wealth tax.

More worryingly for Macron, the move has also caused unease within his own centrist majority, which will start discussing the budget bill in parliament later this month.

“Yachts, private jets, race horses, races cars or gold ingots are no longer included in the new wealth tax. That can’t be,” Joel Giraud, an allied lawmaker charged with steering the budget through parliamentary committees told Le Parisien daily.

“These kinds of symbols must be taxed much more. A yacht is bling-bling. It isn’t productive for the economy,” he said.

While leaving the door open to raising specific levies on yachts or cars, Finance Minister Bruno Le Maire warned lawmakers not to hit a luxury sector in which France is a leader:

“And why not tax jewellery, furs and wine cellars?” he asked.

Reporting by Michel Rose; Editing by Richard Balmforth

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