Hollande's news tax plan hits snags

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Hollande's news tax plan hits snags

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French Presidents plan for a swathe of new taxes was Monday branded a recipe for disaster.

10 September,2012 06:19 pm

Socialist Hollande outlined a fiscal programme that includes a top tax rate of 75 percent in a televised interview on Sunday evening, promising that the cocktail of higher taxes and cuts in public spending would lead to economic recovery within two years.That was dismissed as unfeasible by the right-wing UMP party, whose former leader Nicolas Sarkozy was trounced by Hollande in presidential elections in May.I am very worried for France, said Jean-Francois Cope, one of the candidates to succeed Sarkozy at the head of the main opposition party.He wants the French to believe that through massive tax increases he will resolve the economic problems of our country, Cope said.I was the budget minister for three years and I have retained one lesson -- that is, to reduce the deficit, one starts with cutting public spending and not by raising taxes.Hollande, whose popularity ratings have nose-dived since he took office amid mounting discontent over the flagging economy and job cuts, insisted the 75-percent tax pledge on incomes over one million euros ($1.28 million) would not be diluted.The president -- who has famously said he does not like the rich -- said 10 billion dollars would come from additional taxes on households, especially the well-heeled, 10 billion more from businesses and 10 billion from savings in government spending.Cope said the new top rate of tax would result in business leaders abandoning France. Although he was all for progressive taxation, there is no country in the world with a 75-percent tax, he said.Frances richest man, LVMH boss Bernard Arnault has sought Belgian nationality but