France's "millionaire tax" would last years: Hollande aide

PARIS Tue Apr 10, 2012 3:00pm EDT

Francois Hollande (L), Socialist Party candidate for the 2012 French presidential election, signs autographs during a campaign visit in Besancon, eastern France, April 10, 2012. REUTERS/Robert Pratta

Francois Hollande (L), Socialist Party candidate for the 2012 French presidential election, signs autographs during a campaign visit in Besancon, eastern France, April 10, 2012.

Credit: Reuters/Robert Pratta

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PARIS (Reuters) - The 75 percent tax rate that French presidential frontrunner Francois Hollande wants to slap on income over 1 million euros ($1.31 million) would be kept in place for many years, a top adviser to the Socialist candidate said on Tuesday.

In an interview with Reuters, Hollande adviser Michel Sapin said the 75 percent tax was more a symbolic measure than a big money-spinner for the state but should stay in place for as long as the rest of Hollande's national debt-reduction effort.

Slashing France's public debt from the current 89 percent of gross domestic product to the EU target level of 60 percent would take "many years", said Sapin, a former finance minister who is in charge of Hollande's election manifesto.

"So our endeavor is going to last a long time. This measure (75 percent rate) will last as long as the exceptional (broader) sacrifice France has to make," he said. Asked if this meant it would be kept for several years, he said, "Yes, naturally."

Hollande is tipped to win the two-round presidential election on April 22 and May 6, which will be followed by parliamentary elections in late May and early June, as voters punish conservative President Nicolas Sarkozy for three years of economic gloom.

Hollande says the 75 percent tax he plans to impose would hit about 3,000-3,500 people and raise around 200-300 million euros a year.

Members of his Socialist Party have said the tax could be a temporary measure, raising questions about how long it would stay in place.

Sapin, a longtime friend of Hollande and possible finance minister or prime minister in a future Hollande government, also said that the Socialists were not the spend-happy left-wingers of decades past and that financial markets were not as fearful of them as the left's political adversaries would like to think.

He also said it was wrongly assumed that the Socialists were asking for a public spending blitz when Hollande said that he would seek pro-growth amendments to a European treaty on debt and deficit containment.

"It's important to understand here that what we talk about growth we are not talking of (demand-driven) economic stimulus," he said.

"The markets are more intelligent than the right," said Sapin. "They hate uncertainty. They need visibility, and want to understand the underlying will."

Balancing the books in France's generous public healthcare system is a top priority for the Socialists, but cutting costs does not mean cutting quality, he said.

Sapin also said he hoped that the trade unions would be able to play a constructive role in France's future during a period where the battle to reduce bloated debts would make life difficult for people and governments across Europe.

Looking to Germany, he said a long tradition of partnership rather than conflict with trade unions was one of the main advantages of France's neighbor.

"And it's our biggest weakness," he said.

(Additional reporting by Jean-Baptiste Vey and Mattias Blamont; Editing by Hugh Lawson)

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