France Raises Taxes on Companies and Wealthy to Protect Rating

Spooked by S&P’s downgrade of American debt, France has raised corporate taxes as well as the wealthy in an attempt to close France’s budget gap. The move follows earlier government action to cut spending as the country prepares for a general election.

“There is a crisis of public debt in industrialized nations and the U.S. economic slowdown is slowing our own economy,” Prime Minister Francois Fillon said late yesterday on TF1 television. “Eighty-three percent of the measures in this plan are aimed at big companies, owners of capital and wealthy households. We aimed for measures that were not going to break growth.”

Source: Bloomberg Businessweek