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Billionaire's exile boosts Hollande tax shake-up

THE decision by France's richest man, Bernard Arnault, to seek Belgian citizenship has created a media frenzy over tax exiles, giving the increasingly unpopular Socialist President Francois Hollande a chance to grandstand.

Mr Arnault, the chief executive officer of LVMH Moet Hennessy Louis Vuitton, the world's biggest luxury-goods company, said his "personal action" is not aimed at sending a political message or escaping Mr Hollande's 75pc tax on earnings of more than €1m.

Still, 'Liberation' newspaper ran a front-page headline yesterday saying: "Get lost, rich bastard," and Mr Hollande said it's patriotic to pay taxes.

The uproar largely eclipsed Mr Hollande's announcement in the same interview of €30bn in spending cuts and tax increases and his call to his union supporters to accept greater job flexibility and a shake-up of the tax system by the end of the year.

"The incident has huge benefits for Francois Hollande," said Nicolas Tenzer, director of the CERAP think-tank in Paris. "It's a very powerful symbol and it allows Hollande to bridge dissent among his own supporters."

With the economy stagnating, unemployment at a 13-year high and his approval rating sliding, the controversy allows Mr Hollande to burnish his Socialist credentials by pushing through the so-called millionaire tax in the 2013 budget, pledging no exceptions.

He slammed Mr Arnault in the TF1 Television interview.

"He should have reflected on what it means to ask for another nationality because we are proud to be French," Mr Hollande said.

"Everyone must take part, and I note Arnault said himself he will contribute," he said, calling it "the right correction".

Violence

Mr Arnault helped extend the debate further by announcing yesterday that he was suing 'Liberation' for its "vulgarity" and "violence" and noting the jobs he had created in France since the 1980s, when he took control of LVMH.

Mr Arnault has a fortune of €20bn according to Bloomberg's Billionaires Index.

The announcement of his lawsuit gave Prime Minister Jean-Marc Ayrault the opportunity to say that the rich will have to pay their share.

Mr Ayrault said yesterday that he told Mr Arnault when they met recently that "everyone has to make a contribution in proportion to his means. The tax reform we're planning will put the taxation of capital and labour on the same level."

The ruckus comes after Mr Hollande's popularity fell seven points over the summer break as unemployment rose, a Viavoice poll showed on September 3.

Mr Hollande's approval rating fell to 55pc from 62pc at the beginning of June, Viavoice's survey for 'Liberation' said, in line with other recent polls.

Irish Independent