France Imposes Taxes to Raise $3.55 Billion
France, facing a social security deficit of $4 billion, announced a series of temporary taxes on salaries, capital and real estate investments that the government said would raise $3.55 billion.
Premier Jacques Chirac released a statement Friday night detailing the government’s plans after the evening television news programs and at mid-point of a holiday weekend.
The announcement was timed to attract minimal media attention and released after the stock exchange had closed.
The statement stressed that the new measures were exceptional in nature and not permanent.
Chirac’s plan avoids any reduction in social security payments for the system which covers 99.2% of the population with medical and old age insurance.
The daily newspaper Liberation said Saturday the new taxes are expected to raise only $1.25 billion by the end of 1987, leaving the social security system with a $2.5 billion deficit for this year--just the amount the government is allowed by law to borrow from the treasury.
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