French Economy Minister Emmanuel Macron courted controversy in a recent interview by suggesting that France should abolish its wealth tax.
Macron told insurance industry magazine “Risque” that taxing wealth is “not efficient” and that it would be “preferable” to raise inheritance tax.
Under current rules, the wealth tax, or ISF, is applied to income over EUR800,000 (USD900,000) in cases where an individual’s net assets exceed EUR1.3m. The ISF rate varies from 0.5 percent to 1.5 percent, and total accumulated wealth and income tax is capped at 75 percent of the individual’s net global income.
Macron also told the publication that France’s exit tax, designed to discourage taxpayers from relocating abroad, is counterproductive as it encourages entrepreneurs to launch their business ventures in other countries.
Under the exit tax, taxpayers subject to the wealth tax who transfer their fiscal residence abroad are subject to a tax on capital gains realized before their departure, if they cede the securities that they hold within eight years following their expatriation.
Macron’s comments earned a rebuke from Prime Minister Manuel Valls, who told local radio that while the wealth tax could be improved, abolishing it entirely would be a “mistake.”
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