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French Executives Call for Special Tax on Rich to Ease Deficit

L'Oreal heiress Liliane Bettencourt (file photo)
L'Oreal heiress Liliane Bettencourt (file photo)

Some of France's wealthiest people are urging the French government to impose a special tax on the rich to help bring the country's huge debt and deficit under control.

A group of 16 executives and wealthy investors have signed an open letter saying they believe it is "necessary to contribute" at a time when the prospect of worsening government debt "threatens the future" of France and Europe. The letter appeared Wednesday on the website of the weekly news magazine Nouvel Observateur.

The authors called for France's richest taxpayers to make an "exceptional contribution" to reducing the budget deficit. But they did not say how large the tax should be -- or whether it should be a one-time action or a permanent tax increase.

The letter's signatories include France's richest woman, L'Oreal heiress Liliane Bettencourt, and the chief executives of oil company Total and French dairy-products maker Danone.

The letter echoes an appeal by U.S. billionaire investor Warren Buffett, who urged the U.S. government last week to collect more taxes from the country's "super-rich" as one way to cut the budget deficit and debt.

European news agencies say French Prime Minister Francois Fillon is likely to propose a special tax on the wealthy later Wednesday, as part of an austerity package aimed at keeping France on target to reduce its budget deficit. The reports say Fillon also is expected to call for the scrapping of tax breaks for big businesses as another way to raise more revenue.

The French government had set a target of reducing its deficit from 7.1 percent of gross domestic product last year to 5.7 percent this year, and then to 4.6 percent next year. But a recent slowdown in French economic growth is making it harder to meet those goals because slower growth leads to lower tax revenues.

The French economy recorded zero growth in the second quarter of this year compared to the previous three months, down from 0.9 percent growth in the first quarter. The French government had forecast two percent growth for this year, but Budget Minister Valerie Pecresse said Wednesday Fillon will revise that figure.