The French government and lawmakers have struck a deal to hit the wealthy with a special surtax as part of efforts to keep France's deficit-reduction targets on course, a top deputy said on Tuesday. Under a savings package unveiled in August, the government aims to raise an extra 10 billion euros ($13.6 billion) in 2012 and cut 1 billion euros from spending as it tries to reduce the public deficit gradually to meet an EU target of 3 percent in 2013.
With an April 2012 presidential election looming, the government is eager to cast the rich as bearing the biggest burden under the belt-tightening drive and included plans for the special two-year surtax on them. President Nicolas Sarkozy's government and his conservative UMP party, which has a majority in the lower house of parliament, agreed a 3 percent surtax should apply to people earning 250,000-500,000 euros annually and 4 percent for incomes greater than 500,000 euros, the UMP's head in parliament, Christian Jacob, said.
Jacob said that the idea of the surtax lasting two years had also been dropped. "Instead of two years as was originally foreseen, we're going to keep it over time, which is to say, until we reach a deficit of 3 percent," he said. Jacob's comment appeared to be aimed at confirming that the tax would apply as long as needed rather than suggesting that the government might not hit its deficit goal of 3 percent in 2013.