French 75% tax rate will be temporary: budget minister
19th July 2012, 0 comments
The new 75-percent tax rate France will impose on top incomes will be temporary and could be reconsidered when the country balances its budget, Budget Minister Jerome Cahuzac said Thursday.
"It seems necessary to me during a time of debt reduction," Cahuzac told Europe 1 radio when asked about the tax.
"Once the country has been put back on track... then the question can arise" of dropping the tax, he said.
But Cahuzac said the tax was also meant as a signal to the wealthy.
"We can hope that thanks to this the intolerable salary gaps that we see today will be a thing of the past," he said.
President Francois Hollande's Socialist government plans to impose the tax rate on annual salaries in excess of one million euros ($1.2 million), possibly starting from next year, and to balance France's budget by 2017.
The tax rate has come under fire from the right, who say it will lead to an exodus of top earners from France while doing little to address the country's fiscal problems.
© 2012 AFP