PARIS President Nicolas Sarkozy vowed on Monday to tax citizens who seek refuge abroad from France's high rates, seeking to outdo his Socialist challenger in a presidential election next month.
Struggling to catch up with Socialist Francois Hollande in opinion polls, Sarkozy said he wanted a link between French nationality and taxes, calling it a "moral issue" for citizens to pay their share.
"Is it normal that someone has French nationality and is exonerated from French taxes? It's deeply shocking," Sarkozy said during a two-and-a-half hour televised debate with members of the public and journalists.
Six weeks from the April 22 first round of a presidential election, Sarkozy is battling to shake off the image that he is a friend of the rich, which has dogged him since he cut inheritance and other taxes on the wealthy early in his presidency.
Hollande is meanwhile casting himself as the friend of the middle and lower classes, in part with a proposal to hit millionaires with an new upper income tax rate of 75 percent.
Not to be outdone, Sarkozy said he would require French citizens living abroad to declare what they pay in taxes abroad and that French authorities would levy a tax on the difference between that and what they would have paid on investment income in France.
"If you move abroad as a tax exile to escape taxes and you want to remain French, then pay the difference," he said, stressing that the measure would not target expatriates working abroad.
"It's a moral question especially after four years of crisis."
<Graphic of polls, click on: r.reuters.com/was36s
<Election online: tinyurl.com/7hpt4vy
With both Sarkozy and Hollande promising to bring down the public deficit, taxation has emerged as a major theme of the election, with the two main candidates looking for extra revenues while wary of cutting back on high state spending.
There is no shortage of wealthy French who have opted for lower taxes abroad. Rocker Johnny Hallyday, model Laetitia Casta and restaurateur Alain Ducasse are high-profile cases.
The French government is already introducing a so-called exit tax on the capital gains of wealthy people who take up residence abroad.
Sarkozy said his new measure, which risks running up against EU rules on the free movement of capital and people, would be additional.
Senior Hollande adviser Michel Sapin agreed on the need to tax the wealthy but said Sarkozy was too late.
"He had years to put (the reform) in place and the day that he becomes a candidate he discovers that there is something unacceptable going on. He's had five years to fix it," Sapin, a former finance minister, said on Public Senat TV channel.
Sarkozy on Sunday threatened to erect barriers to trade and immigration unless the European Union takes tougher stands.
He raised eyebrows among some EU partners by vowing to pull France out of the EU's Schengen open-borders zone unless progress is made over the year on controlling immigration flows.
Asked if he had forewarned German Chancellor Angela Merkel, Sarkozy said on Monday: "Of course, Mrs. Merkel and I work hand in hand," adding that he saw no reason why Berlin would not support such a measure since they suffer the same problems.
(Reporting by Leigh Thomas; editing by Andrew Roche)