FRANCE: Capital Tax

To the Consultative Assembly France’s suave Finance Minister René Pleven offered a proposal as deceptively harmless as a Teller mine: a capital tax to be levied on all fortunes exceeding 100,000 francs. Minister Pleven called it a “tax of national solidarity . . . consecrated to financing reconstruction.” The rate would be 3% to 20%. Householders would be allowed 200,000 francs exemption. Payments would be made in four years, but immediate payment would earn a 4% discount.

The Pleven proposal was, in effect, a supplementary income tax. But if it became law, which seemed likely, it would establish a principle* which might well ring the tocsin for French capitalism.

Minister Pleven also asked for a 3% to 20% tax on increment of wealth during the war (a “moral” necessity aimed at collaborationist profits). He calculated his two measures would yield revenues of 130 billion francs. He based his figures on a Government census of fortunes, in itself a radical departure from French financial tradition. Hitherto a passionate anonymity has shrouded the wealth of individual Frenchmen. The Government, said Minister Pleven, had discovered that France had 1,300 billion francs of national wealth in liquid form. His levies on wealth would siphon off 10% of this liquidity.

To French right-wingers the percentage seemed excessive. Cried conservative assemblymen: the proposed taxes would kill private enterprise and the incentive to save. Sneered Socialist Jules Moch: the proposed taxes were “too timid and too late.” Growled Communist boss Jacques JDuclos: Minister Pleven was “toadying to the money interests.”

*Leftists have long regarded a capital tax in kind (i.e., in corporate shares, factories, etc.) as a handy device for socialization. “