French Target Rich And Business In New Budget
The French government is targeting big business and the wealthy as it aims to reduce its budget deficit and kick start growth.
The ruling socialists are reducing the threshold for a wealth tax, bringing in a 45% marginal tax rate for high earners, while those earning over 1m euro (£820,000) a year will have to pay 75% of their taxable income to the treasury.
Industry is also in the firing line - tax breaks for business brought in by former president Sarkozy will be shelved, and large companies will be paying more capital gains tax.
"This is a serious budget, it's a leftist budget and it's fighting budget," French finance minister Pierre Moscovici said.
In all, these measures will contribute 20bn euro (£16bn) to the coffers, while spending cuts will account for another 10bn euro.
The 2013 budget is designed to reduce France's budget deficit from 4.5% to 3%.
France is the second largest economy in the eurozone, but has been struggling with stagnant growth for three successive years, and unemployment has just passed the psychologically and politically damaging barrier of three million.
Critics have rounded on the government over the budget, saying it sends a message that France targets the rich and dislikes for business.
"France is sick from a model that isn't viable," Guillaume Carou, CEO of Didaxis and president of the Club of Entrepreneurs, which represents 15,000 small businesses said.
"But (the government has) chosen to keep it, that's what the 2013 budget reveals."
President Hollande was elected four month ago on a tide of anti-austerity fervor, but has seen his popularity fall from 63% to 43%, as he has been forced to alter or abandon key electoral pledges.