He wants it, he gets it: After his first proposal for a 75% mega tax for income-millionaires was rejected by the Constitutional Court, France’s president Francois Hollande announced in a TV interview to shift the burden of payment from individuals to businesses paying salaries above the magical one-million-euro-line.
That means that companies paying wages higher than €1m p.a. are required to pay an extra levy to meet the tax burden of 75% above €1m. The measure should be restricted to two years and is subject of approval by the Parliament in autumn.
Hollande’s proposal is a masterpiece of political symbolism, but could easily turn out to be a lead balloon. Even though the Socialists expect an extra revenue of €210m p.a., many high-earners feel pilloried and think about leaving the country. Next to the bizarre case of Gerard Depardieu’s fiscal flight to Russia, where he should (but eventually failed to) obtain Russian citizenship from Putin himself, there is one branch who is most uneasy about Hollande’s far-left adventure: the Football industry. While France has around 1,500 income-millionaires, a considerable portion of these big earners make their money with running and shooting.
Many well-off consider leaving the country, making the proposal a lead balloon for Hollande
In the next two years, club bosses in France will need good arguments to pursue current players to stay and potential high-profile players to come. French league president Frederic Thiriez already evokes ‘the death of French football’ and announces: “This new tax will cost first division teams €182 million. With these crazy labour costs, France will lose its best players, our clubs will see their competitiveness in Europe decline, and the government will lose its best taxpayers.”
The polls, however, showed approval to Hollande’s tax-plan, which was a gist in his last election campaign. In the end, it is a matter of perception: Are such symbolic measures helpful to overcome the economic crisis or are they counter-productive? Socialists point to the extra revenues and the ‘patriotism’ of their fellow citizens to stand together in times of general hardship, while others simply shake their head.
Whether or not the elegies of Monsieur Thiriez will be justified, remains to be seen. What is true is that France will need more than a few extra-millions from their football idols to return to old Gallic potency. Zlatan Ibrahimovic, this epitome of footballing extravagance, must be rather amused by this whole discussion: the star player from Paris St. Germain has a guaranteed annual net income of €14m, which means that the super-tax increases his gross salary to a hefty €56m – per annum.