Sarkozy set to raise French taxes

On Sunday, French President Nicholas Sarkozy announced that he would raise consumer taxes. The announcement came as France prepares for a presidential election in April.

The President’s decision was made to “make French companies more competitive” in the European economy and to “reduce the national budget deficit” according to the New York Times. Sarkozy also unveiled policies to “increase the number of apprenticeships for young people, to increase construction of low-income housing, and to create an “industry bank” to make cheaper loans to small and medium companies.” According to Bloomberg’s Businessweek, “Sarkozy’s measures would raise the rate of tax on most goods and services by 1.6 percentage points to 21.2 percent.” The move to a higher consumption tax is a response to the president’s plan to cut payroll taxes on French businesses. Any measures designed to make the French economy more competitive “must be rushed through Parliament” however, which is set to close its doors just prior to the presidential vote according to Seattlepi. Sarkozy was careful not to formally declare his candidacy to run for his second term as President, stating that a run for office is “perhaps in my interest, but it is not my duty.” He made the pledge to raise taxes during an interview that was broadcast on multiple French channels. According to Bloomberg, “63% of French adults saw at least part of Nicholas Sarkozy’s televised interview on January 29th.” Sarkozy’s socialist opponent in the upcoming presidential race, Francois Hollande, is in favour of France’s 35-hour working - something Sarkozy described as a “catastrophe” according to the Guardian. “There is a link between productivity and the 35-hour week, that’s obvious.” The president stated that France “needs to lighten the cost of work” and added “I’m not talking about reducing salaries, I’m talking about employment charges that penalise employment.” Sarkozy currently trails Hollande in polling three months prior to the presidential election.