PARIS: France's richest citizens should pay higher taxes for a 3-year period as part of a broad effort to reduce deficits, but the government must tread carefully to avoid an exodus of the business elite, Publicis CEO Maurice Levy told Reuters on Wednesday.
Levy, who heads the world's No. 3 advertising agency in revenue terms, is among 16 prominent executives who have called on the super-wealthy to contribute more to alleviate the national debt. The 16 include the billionaire heiress of L'Oreal and the head of oil major Total SA
Such measures are expected to figure in a government package of deficit-cutting measures to be announced on Wednesday, aimed at squeezing out as much as 10 billion euros in extra revenues next year to compensate for a sluggish economy.
Levy and the other CEOs are pushing for a short period of higher taxes, rather than a fundamental overhaul of the tax system, to ease the current squeeze on public finances.
"I think it will take three years to straighten out the country's debt problems provided that we take consistent and vigorous action," Levy said in an interview.
"For these three years, the rich should contribute more. Afterwards we can take stock and if we realise it would be better to reform the tax system, then we will do so."
Critics say any move to tax the rich more would be largely symbolic and motivated by a desire to make a clampdown on tax breaks for the broader public more palatable to voters eight months before presidential elections.
Levy, whose push follows a similar call in the United States by billionaire investor Warren Buffett, said it was important for the wealthy to do their bit during difficult times.
"I don't want it to be only symbolic, I think it should be a real contribution," he said.
He said the challenge would be to find a way to structure the contribution by the rich, so it would be significant enough to help but not enough to cause the elite to leave France.
Levy said any fiscal measures needed to be accompanied by broader reforms of everything from labour rules to social welfare programs to boost growth. "We must also focus on ways to make France competitive again," he said.
France cannot continue on its current course in part because the escalation of Europe's debt crisis and downgrade of the US credit rating had been a wake up call for the broader public.
"People understand today that even if France is a rich country, it cannot continue to live beyond its means relying on credit," he said. "They understand that it's very important to resolve the issue of deficits and begin to generate growth again."
As the head of Publicis, Levy's business is directly linked to economic growth. He also heads lobbying group AFEP, which counts French blue-chip companies as members.
Copyright Reuters, 2011
Comments
Comments are closed for this article.