French Socialist's big idea: tax the rich

April 3, 2012 RSS Feed Print

In all the discussion about how much the rich make and how much they should pay, Sarkozy has also been put on the spot — again — about a lavish party to celebrate his presidential victory at Fouquet's and a vacation on a friend's yacht he took shortly after. These moves quickly earned him the moniker "President Bling Bling," and he has struggled ever since to shed the image of a man too comfortable with money.

Five years after the victory party and the yacht trip, Sarkozy is still fielding questions about them. He most recently defended the vacation in an interview not long after Hollande's proposal when he called it a last-ditch attempt to save his marriage to Cecilia, whom he divorced not long after taking office.

But Hollande has struggled to harness this momentum.

Hollande bungled the announcement of his new tax, initially saying it would apply to those bringing in more than €1 million — about $1.33 million — a month, before clarifying he meant a year.

He has also failed to provide a coherent narrative for why the tax is needed. He started out by saying that, in tough times, the rich had to pay their fair share, before later conceding it would only bring in about €100 million to €300 million each year. France's public debt is €1.7 trillion ($2.3 trillion).

Then he said it would put pressure on companies to lower ballooning salaries, noting that that executive pay for France's 40 largest public companies — the ones that make up its CAC-40 stock index — rose 34 percent in 2010, while most of Europe was fighting for its very existence.

In the end, Hollande has settled on casting the tax as simply the right thing to do.

"It's not a question of return," he told RTL radio station. "It's a question of morality."