WASHINGTON — France continues to enact incorrect economic policies to salvage their flagging economy, going contrary to what the European Common Bank (ECB) issued last week. Reuters reports that France, led by Socialist government and their president Francois Hollande, will raise taxes on one million rich French families.
To reduce the huge cost of the very generous French family benefits system, the Socialist government is reducing the income tax exemptions that rich parents use depending on how many children they have. It may look like there may be another exodus of France’s wealthy class.
It does not address the spending problem that the ECB emphasized in a public statement last week. According to the Reuters article, although the government could save $2.59 billion with limited these tax exemptions, it does not add up. It only saves a net of $2.2 billion, when the country still needs to cut spending and generous benefits and welfare programs.
France was doing so poorly that it was given an extra 2 years to meet a budget deficit goal of 3% of its output, and this cutting down of tax exemptions could be a simple token gesture to France’s EU partners.
What is a big issue with this new proposal? Apparently, it cuts at the definition of a traditional family model because it makes family allowances dependent on household income.
Conservative lawmaker Gilles Carrez said that this move cuts at French families. He quipped, “It’s yet another hard blow for families, but we already knew that the Socialists don’t like families,” he said.