L'Oreal Chairman and Chief Executive yesterday criticised the French government's plans to introduce a 75 percent marginal income tax rate, arguing that it would make it difficult if not impossible for France to attract top talent should the plan go ahead.
Jean-Paul Agon, the chief executive of the world's biggest cosmetics company L'Oreal, told the Financial Times yesterday that French President Francois Hollande's plan for a 75 percent tax on earnings over 1 million euros will hurt France's competitiveness.
Speaking to the Financial Times, he said:
If there is such a new tax rule, it's going to be very, very difficult to attract talent to work in France, almost impossible; at a certain level, of course.
Agon was referring to Hollande's popular campaign pledge to strive for "more fiscal justice" and higher taxes for the super-rich in France. In February, Hollande had lamented the "considerable increase" in French corporate executives' pay and declared that it was "not possible to have this level of remuneration."
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The French government is preparing to unveil an austerity budget for 2013 on Friday, which will include tax hikes and budget cuts to save 30 billion euros and bring France's public deficit down to 3 percent of gross domestic product - one of his other campaign pledges.
However, that has brought a wave of criticism from business leaders who fear that France will become so "business-unfriendly that it becomes unbearable", as well as provoke a rush of wealthy taxpayers leaving the country.
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According to the FT, Agon was one of 16 executives and wealthy investors to sign a petition last year calling for a tax on the rich in a gesture of national solidarity.
Other signatories included Liliane Bettencourt, France's richest woman, whose family owns 30 percent of L'Oreal.
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The FT quoted Agon:
I thought that, in difficult times, people with high salaries should contribute.
Agon was one of France's highest-paid executives last year with a total remuneration of 3.96 million euros.