France Plans Wealth Tax Increase

By Staff, Agencies

French Prime Minister Francois Bayrou announced a new tax on the wealthiest as part of a broad austerity plan to reduce public debt and the budget deficit.

The measures include a “solidarity contribution” aimed at high earners to help bridge a €43.8 billion [$47.5 billion] budget shortfall. A levy already in place targeting individuals making over €250,000 [$270,000] will now likely be expanded.

“The effort of the nation must be equitable. We must ask little of those who have little, and more of those who can do more,” Bayrou said on Tuesday.

France’s budget deficit hit 5.8% of gross domestic product [GDP] last year, nearly double the official EU limit of 3% of GDP.

Among Bayrou’s more contentious proposals is scrapping two national public holidays — Easter Monday and Victory Day on May 8 — to boost productivity. Right-wing leader Jordan Bardella condemned the proposal as “a direct attack on our history and roots.”

Other cost-cutting measures in Bayrou’s plan include capping healthcare expenditures and freezing pensions and social benefits at their 2025 levels. However, defense spending will increase.

France’s military budget will rise to €64 billion by 2027, doubling 2017 levels. President Macron announced an extra €6.5 billion in defense funding over two years due to increased European security threats.

A new defense review warns of a potential “major war” in Europe by 2030, citing Moscow as a key threat. The Kremlin denies plans to attack the West and accuses NATO of using Russia to justify military expansion.

France’s public debt stands at €3.3 trillion [114% of GDP]. Left-wing parties accuse the government of favoring military spending over social welfare. Jean-Luc Mélenchon called for Bayrou’s resignation, condemning the growing injustices.

Bayrou must secure parliamentary backing for his proposals before presenting the full budget plan in October.