France Introduces 75 Percent Temporary Tax On Super Rich

France’s government introduced a temporary 75 percent tax on the super rich in a 2013 budget that is aimed at showing that France has the ability to stay at the core of the euro zone.

The sharp tax hikes on businesses and the rich ill recoup 30 billion euros for the public purse in the country’s goal to narrow its deficit to 3.0 percent of national output next year, down from 4.5 percent for 2012, reports NBC News.

The budget represents the country’s toughest cuts and tax hikes in the last 30 years. With record unemployment and a mass of data pointing to France’s stagnant economy, there are fears that the country’s deficit will continue to slip as the country calls short of a healthy 0.8 percent economic growth rate for 2013.

The Huffington Post notes that the budget came as a disappointment for pro-reform lobbyists, because they were hoping for more than simply a freeze of France’s high public spending. Prime Minister Jean-Marc Ayrault was optimistic about the 2013 budget, stating, “This is a fighting budget to get the country back on the rails.”

The government also added a temporary 75 percent tax increase to anyone who earns over one million euros. There is also a new 45 percent band for revenues over 150,000 euros. Those two measures alone are expected to bring in about half a billion euros.

L’Oreal CEO Jean-Paul Agon cautioned in the run-up to the budget that the 75 percent tax could make it harder to attract top executives. Bernard Arnault, who is France’s richest man, and also the CEO of luxury group LVMH, declared earlier this month that he had applied for Belgian nationality, though he assured he would still pay taxes in France.

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