Echoing a call by Warren E. Buffett, members of the European wealthy elite are urging their governments to raise their taxes or enact special levies to help reduce growing budget deficits.
Maurice Levy, chairman and chief executive of the French advertising firm Publicis, on Tuesday became the latest European business leader to ask for higher taxes on top earners, writing in The Financial Times that it was “only fair that the most privileged members of our society should take up a heavier share of this national burden.”
“I am not a masochist; I do not love taxes,” wrote Mr. Levy, who is also president of a French association of private enterprises. “But right now this is important and just.”
The moves come after a similar proposition by Mr. Buffett, the billionaire investor and founder of Berkshire Hathaway. Mr. Buffett wrote in an Op-Ed article in The New York Times on August 14 that the United States should stop “coddling” the rich and raise the top income tax rate in an effort to reduce the deficit.
Mr. Buffett's comments started a debate among some of Europe's elite as to whether austerity measures in some countries were too punishing for the poor while sparing the rich.
The multimillionaire chairman of Ferrari, Luca di Montezemolo, backed Mr. Buffett's idea in an interview with the Rome daily La Repubblica . “I am rich and I am ready to pay more taxes, for reasons of fairness and solidarity,” Mr. Montezemolo told the newspaper.
This month, 16 of France's wealthiest people, including the chief executive of the energy giant Total and the L'Oreal heiress Liliane Bettencourt, signed a petition published in the magazine Le Nouvel Observateur urging the French government to tax them more. Other signatories were the chief executives of Societe Generale, Airbus and PSA Peugeot-Citroen.
A group of about 50 wealthy individuals in Germany, who have been campaigning for a higher top tax rate since 2009, said last week that it welcomed the French petition. “Austerity programs, which affect mainly the poor, are ill-suited to solve the crisis,” said the group, whose name in German means the Initiative of the Wealthy for a Wealth Tax.
On the Continent, government attitudes toward taxing the wealthy have so far been mixed. The French President, Nicolas Sarkozy, last week announced a three-per-cent increase of the tax on the wealthiest individuals, which is expected to generate about $288 million a year.
In Italy, however, there were signs as recently as Monday that Prime Minister Silvio Berlusconi could be backpedalling on similar measures. The government on Monday dropped plans for a bonus tax on Italians earning more than €90,000 ($130,000) a year even though it would still apply to members of Parliament.
Some analysts said the calls for greater sacrifice from Europe's wealthy might have sprung from growing concern that austerity measures in Europe were leading to social unrest, after protests in Greece and Spain and images of burning police cars and shops in the streets of London.
Jean-Philippe Delsol, of the Institute for Research in Economic and Fiscal Issues in France, said he found “surprising” the recent eagerness of top earners to volunteer to pay higher taxes. “Maybe some are ashamed by what they earn,” he said. “But they can just ask to be paid less.”
Mr. Delsol said his research showed that higher top tax rates did not necessarily lead to larger tax revenue for governments because, for example, they could act as a disincentive to earn.
In Britain, where no top executive has yet joined the call for raising tax rates, the government is investigating whether the current rate of 50 per cent on those making at least £150,000 (about $245,000) has actually improved public finances. — New York Times News Service
