One of the most noteworthy efforts to jumpstart France’s financial state by government officials was to impose a 75 percent tax hike on the nation’s wealthiest citizens. Despite a judicial ruling against the measure and widespread outcry from the French investment community, the Hollande administration appears bent on enacting this controversial policy.
While the provision’s supporters say it will enable the government to be proactive in its resuscitation of the French economy, critics – including business leaders and international film star Gerard Depardieu – say it will drive money away from a nation beleaguered by years of financial crises. Reports from various news sources, including U.K.-based The Telegraph, suggest that investors and money funds seem to be pulling the plug on their French risk portfolios and assets.
According to the French central bank, 54 billion euros were withdrawn from capital funds in October and November, during the height of the public debate over the tax boosts.
Members of France’s corporate community are purportedly voicing their concerns in the public forum, including an interest group of private firms that described a “shunning” of the French economy. Additionally, these critics argue that punitive tax increases risk driving away the very money both the nation and the wider European economy sorely need to successfully improve. A lawsuit successfully challenged the 75 percent tax provision in late December 2012, but members of the Hollande administration have announced publicly that they plan on re-writing and submitting the proposal in the next few months.
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