French government seeks to quash new fiscal row over art tax

Thu Oct 11, 2012 12:59pm EDT
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PARIS (Reuters) - President Francois Hollande's Socialist government moved on Thursday to halt a push to extend a wealth tax to artworks, eager to head off a new tax row during a belt-tightening drive.

Culture Minister Aurelie Filippetti said that Hollande and Prime Minister Ayrault shared her opposition to targeting art with the wealth tax, as sought by a fellow Socialist lawmaker.

Following a proposal from MP Christian Eckert, the lower house of parliament's finance committee backed an amendment to the 2013 budget on Wednesday that would apply the tax to art, even though the measure is divisive for both the left and right.

With a long tradition of public support for the arts, France has spared artworks from the wealth tax since former Socialist president Francois Mitterrand introduced the levy in 1982.

People with assets worth more than 1.3 million euros ($1.68 million) are liable for the wealth tax of 0.25 percent on top of their income tax. The rate doubles to 0.5 percent for assets over 3 million euros.

Hollande's cash-strapped government has already come under fire for adding new taxes on the rich, especially for a new 75 percent tax rate on incomes over 1 million euros which is prompting some wealthy French to consider moving abroad.

Eckert said earlier this week that the measure was more about fiscal justice than raising new revenues, which he acknowledged were unlikely to be significant.

Under the amendment, artworks worth more than 50,000 euros would be included in the assets used to calculate a person's fortune. Eckert had originally sought the threshold to be 5,000 euros.

Filippetti said it would be a "grave error" to take away special tax treatment for art at a time of growing competition between the world's major art markets.   Continued...

France's President Francois Hollande (R), his companion Valerie Trierweiler (2ndL) and Louvre museum's president Henri Loyrette visit the new Department of Islamic Arts galleries during its official opening ceremony at the Louvre museum in Paris September 18, 2012. REUTERS/Gonzalo Fuentes