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France Leftists’ Plans Include 90% Top Marginal Income Tax Rate

Alan Katz

23 June 2024 at 6:38 am·2-min read

(Bloomberg) -- France’s leftist alliance would raise the top marginal income tax rate to 90% if it were to take over the government following legislative elections that run through July 7.

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Eric Coquerel provided the figure in an interview in Cnews television, saying that the New Popular Front’s proposal would pass muster with French courts and wouldn’t be considered confiscatory because it would only have an impact on the highest portion of a taxpayer’s income.

While Coquerel, who presided over the finance committee at the National Assembly before its dissolution on June 9, didn’t specify the level at which the 90% rate would apply, the plan was previously in the program of his far-left France Unbowed party. In a budget amendment proposed in 2019, the top rate would apply on taxable income over €411,683 ($440,213).

The income tax rate in France currently tops out at 45% on income over €177,106.

The New Popular Front is running in second place in polls on voting intentions for the first round of the parliamentary election on June 30, behind the far-right National Rally and ahead of French President Emmanuel Macron’s party and its allies.

The last time a government tried to introduce a top income tax rate anywhere close to the level proposed by Coquerel — a plan for a 75% rate on incomes of more than €1 million — it was thrown out by France’s constitutional court. That forced then-President Francois Hollande to transform it into a levy paid by companies on salaries of more than €1 million.

The tax put in place by Hollande, who is running for a parliamentary seat in the current legislative election as a member of the New Popular Front, expired at the end of 2014.

On Friday, the leftist alliance unveiled its plans to address the country’s economic challenges with a vast increase in taxation and public spending. The French business community has criticized the economic programs of the group, raising concerns about its plans to hike the minimum wage, reinstate taxes on the wealthy and capital, and reverse Macron’s pension reform.

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