France: Increased tax for the "One Percent"

President Francois Hollande 4 July 2012

As he promised throughout his presidential campaign, Francois Hollande on Wednesday introduced a new 2012 corrective budget that calls for, among other measures, a one-off tax levy on the nation's wealthiest individuals and large corporations to help address the nation's current financial woes.

“We face an extremely difficult financial and economic situation,” Finance Minister Pierre Moscovici said at a press conference in Paris. “The wealthiest households, the big companies, will be asked to contribute. In 2012 and 2013, the effort will be particularly large.”

Taxes on individuals will target those with net wealth of more than 1.3 million euros (or $1.63 million) and aim to raise nearly 2.3 billion euros ($2.90 billion) in this budget cycle alone. The levy focused on large banks and oil-related energy firms is designed to bring an additional 1.1 billion euros.

Both increases are part of a scheme to close what the nation's state auditor says is a 6-10 billion euro budget gap in 2012. Other measures include the lifting of a payroll tax holiday and a levy on dividends and stock options.

Hollande said the 2013 budget will restore the pre-Sarkozy wealth tax rates on people with assets of more than 1.3 million euros. That will return the rate to 75% for those making over $1 million.