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France's economy minister Macron suggests ending wealth tax

Farouk Batiche / AFP | Economy Minister Emmanuel Macron (left) with Prime Minister Manuel Valls on April 1à, 2016. 2016.
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French Economy Minister Emmanuel Macron has suggested that France should scrap its wealth tax and raise inheritance taxes instead, breaking a longstanding Socialist taboo and drawing the ire of Prime Minister Manuel Valls.

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The “Solidarity Tax on Wealth” (ISF) dates back to 1981 when it was created under Socialist president François Mitterrand (it was originally called the “Tax on Large Fortunes”).

It was abolished briefly under conservative prime minister Jacques Chirac in 1986, and then resurrected as the ISF in 1989 after Mitterrand’s re-election.

Under the current rules, the ISF taxes fortunes above 1.3 million euros at 0.5 percent.

Speaking to insurance industry publication “Risques” this week, Macron said: “I believe that taxing wealth is not efficient... and it would be preferable to increase inheritance taxes instead.”

Macron also told “Risques” that he wanted to reverse France’s 2011 “Exit Tax”, designed to prevent businesses from relocating outside France, believing that it “encourages young people to establish business abroad from the beginning”.

Ambitious former banker Macron, who is not a member of France’s ruling Socialist Party recently launched his own political movement En Marche! (which translates roughly as “Forward!”). His comments drew immediate condemnation from Prime Minister Manuel Valls.

Valls told France Info radio that while the government was doing everything possible to relieve pressure on France’s poorest citizens, “cancelling this tax, which could be greatly improved, would be a mistake”.

“I would ask every minister, given that we have one more year of our mandate, to focus on their current missions,” he added. “There is still much we can do to make the French economy more competitive and to support French businesses based both here and abroad.”

(FRANCE 24 with AFP)

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