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France mulls wealth tax changes as protests intensify France mulls wealth tax changes as protests intensify
(35 minutes later)
A day after President Emmanuel Macron’s administration backed down in the face of nationwide protests and suspended a fuel tax, the government has suggested it could also amend a wealth tax that critics say goes too easy on the rich. The French government will consider reintroducing taxes on the most wealthy in what is seen as a further measure to appease the gilets jaunes protesters threatening to destabilise Emmanuel Macron’s presidency.
Speaking on RTL radio, government spokesman Benjamin Griveaux, a close ally of Macron’s, said all policies involving taxation needed to be re-evaluated from time to time and, if deemed not to be working, should be changed. Lifting part of the ISF or solidarity tax was a pillar of Macron’s election campaign and one of the first fiscal measures he took on taking power in May 2017, leading to his nickname “president of the rich”.
“If a measure that we have taken, which is costing the public money, turns out not to be working, if it’s not going well, we’re not stupid – we would change it,” he said. On Wednesday, as gilets jaunes (yellow vests) vowed to continue protests that have seen parts of Paris in flames and violent clashes with police, the government’s spokesman Benjamin Griveaux admitted ISF could be reimposed.
He defended Macron’s decision on coming into office last year to amend the wealth tax – known in France as ‘ISF’ – by narrowing it to a tax on real estate assets, rather than covering all worldwide assets, from jewellery to yachts to investments, over the value of €1.3m (£1.2m). “If the measure we have taken doesn’t work, we’re not idiots, we’ll change it. But first we will have to evaluate it,” Griveaux told RTL radio. Griveaux added that the evaluation would happen next year.
Those changes earned Macron the label “president of the rich” because they were seen by his critics as accommodating the wealthy. Reintroducing the wealth tax has been one of the demands of parts of the gilets jaunes movement that grew out of anger at rising taxes on petrol and diesel.
Asked whether the government would be willing to go back on that decision, Griveaux suggested it was possible. The government has been forced into a change of direction after last Saturday’s scenes of running clashes with police, torched cars and buildings and smashed shop fronts in one of Paris’s most exclusive areas, as well as damage to the Arc de Triomphe in a third week of protests.
“We did not cancel the ISF, we transformed it. I want to remind you that we maintained the tax on real estate ... The tax that was removed was to encourage investments in the real economy. It was not a gift to the rich,” he said, before adding: “We are evaluating it, we are controlling it. This money was to be invested in our small and medium-sized enterprises for them to develop, innovate and hire. If that is not the case, if the evaluation is not good, then we can reopen it for discussion.” On Tuesday, the French prime minister, Édouard Philippe, tried to calm the civil unrest by announcing a freeze on the fuel price rises and on the cost of electricity and gas.
Over the past three weeks, Macron has come under immense pressure in the face of nationwide protests against a fuel tax increase that was set to begin in January. The so-called “yellow vest” movement, named for the high-visibility jackets motorists in France must have in their cars, led to violent clashes with police in Paris at the weekend, and on Tuesday prompted the government to change course.
Who are the gilets jaunes and what do they want?Who are the gilets jaunes and what do they want?
Prime minister Édouard Philippe said the carbon-tax increase would be suspended for six months and the time used to examine other steps to ease the burden on blue-collar workers and the squeezed middle-class. Thomas Mirallès, an unofficial spokesman for the gilets jaunes movement in Perpignan, said it was too little, too late.
It marked the first major U-turn by Macron in his 18 months in office and comes at a time when he is far down in the polls, with his popularity at barely more than 20%. “This looks very much like a kind of winter truce, a way of getting through Christmas peacefully,” Miralles said. “Who’s to say the government will not come back in force with these taxes in the spring?”
If the government were to look at reimposing some of the dropped elements of the ISF tax, it would mark a fundamental change of direction for Macron, who came to power promising to be “neither of the left nor the right” politically. Various gilets jaunes organisers have called for wider social reforms, including a rise in the minimum wage and higher taxes on international giants such as Google and Amazon.
Easing the Impôt de solidarité sur la fortune (ISF) for the wealthy was described by one political commentator as Macron’s “original sin” and has been seen as socially divisive coming at a time when ordinary French workers have felt increasingly squeezed.
The ISF was imposed on those worth more than €1.3m including their main residence. It has been replaced by the Impôt sur la fortune immobilière (ISI), which in effect lifted or reduced the tax on certain property, share portfolios and life assurances.
Last year, prime minister Édouard Philippe said the move would make the country more attractive to investors and stop the wealthy leaving France. Those with more obvious signs of wealth such as yachts and luxury cars have seen their taxation raised.
The ISI was introduced in December 2017 and came into effect January 2018. Griveaux has said it will take between 18 and 24 months to see if the new tax has the desired effect of bringing in even more revenue.
The gilets jaunes, as their movement gathers pace, have been calling for another day of action on Saturday while trying to organise some kind of popular leadership. Previous attempts have led to threats against protestors putting themselves forward to give media interviews or meet elected representatives.
André Lannée, in a Facebook video, suggested organising referenda to elect two gilets jaunes representatives for every region. He said: “I invite everyone to spread this message and sign up to the group for each region. These are groups solely for referenda.”
He suggested potential candidates should post a short message putting themselves forward but avoiding politics because “people have had enough of politicians”. Facebook followers would be invited to “like” the candidates. “One like equals one vote … the two delegates will be those who have the most likes,” Lannée said.
He said once elected and with the help of volunteer lawyers the group could then propose new legislation.
“We will arrive at the Elysée with a demand. It will be an official delegation, legitimate as it has been elected by popular referenda. We are not going to smash anything up, there is no interest in smashing up our country.” He added: “We let nothing go; we continue.”
An IFOP poll showed Macron’s popularity had dropped to a new low of 23%. Various opinion polls showed up to 80% of French people supported the gilets jaunes but an even higher number disapproved of the violence carried out by a fringe of protestors.
FranceFrance
Emmanuel MacronEmmanuel Macron
Protest
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