French President Francois Hollande’s 75 percent supertax on the mega-rich is at the center of another row after French soccer clubs said they would cancel all matches scheduled for the final weekend next month to protest at the levy.
The symbolic tax — a 75 percent tax on income exceeding 1 million euros (US$1.38 million) a year — has caused a headache for the Socialist government since it was thrown out as unconstitutional by France’s top court. To avoid the embarrassment of a major policy U-turn, ministers redrafted the tax earlier this year to shift the burden from individuals to employers — a legislative shimmy that has spooked soccer clubs, which famously pay vast salaries even to bit-part players.
Clubs say they are already under financial pressures and that the tax would spark an exodus of top players to rival leagues abroad, killing the domestic game. In spite of a poll showing that 85 percent of French people are in favor of the tax being applied to soccer clubs, the clubs decided to step up their protests.
Union of Professional Football Clubs (UCPF) president Jean-Pierre Louvel announced on Thursday that the round of matches scheduled from Nov. 29 to Dec. 2 would not be played.
“It’s a historic moment for French football. We’re talking about the death of French football,” he said.
Soccer bosses estimate the tax would cost League 1 clubs 44 million euros in the two years it would be in place.
“How can you tax businesses that have been in difficulty over the last three or four years?” Louvel asked. “And why have they been [in difficulty]? Because the taxes we’ve been paying are too high. And people ask why we’re not competitive with other leagues.”
The defending French champions, Paris Saint-Germain — Qatari-owned and one of the biggest-spending clubs in Europe — would be the biggest hit, with 21 salaries over 1 million euro, including the Swedish striker Zlatan Ibrahimovic, currently the highest-paid player in French soccer. However, France’s other big clubs, such as Olympique Lyonnais and Olympique de Marseille, also said they would struggle to stay afloat.
The UCPF argued that payroll taxes paid by French clubs were already the highest in Europe and that players’ wages cost a third more than in Germany, England, Spain or Italy.
“Most of the clubs don’t make money, they lose money, so how is it possible for the clubs to pay taxes when they don’t have money left?” AS Saint-Etienne president Bernard Caizzo said.
Ligue 1 clubs combined registered a loss of 108 million euro at the end of the previous season. Last year, French clubs paid about 700 million euro in social charges and image rights, which was more than they received in TV rights, the UCPF said.
The 75 percent supertax — a temporary measure aimed at forcing the wealthy to help drag France out of its economic crisis — remains popular with voters.