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France bracing for more protests despite retreat on taxes

09 Décembre 2018

A demonstrator holds a French flag during a protest of Yellow vests.

Trade unions and farmers have pledged to join nationwide protests against President Emmanuel Macron, as concessions by the government failed to stem the momentum of the most violent demonstrations France has seen in decades.

Across social media, the Yellow Vests are calling for an "Act IV", a reference to what would be a fourth weekend of disorder.

"We need taxes, but they are not properly redistributed", protester Thomas Tricottet told BFM television.

Official statistics support that claim.

The unrest over the squeeze on household budgets comes as OECD data showed that France has become the most highly taxed country in the developed world, surpassing even high-tax Denmark.

The national Federation of French markets said that Christmas markets have been "strongly impacted" and that its members registered "an average fall of their estimated figures between 30 and 40 percent since the beginning of the yellow vest movement".

"Prime Minister, is the suspension of Macron's fuel taxes, then you still haven't realized the gravity of the situation", Abad said. "But American taxpayers - and American workers - shouldn't pay to clean up others countries' pollution". As a result, France's poverty rate is also lower than in most European countries.

Griveaux defended Macron's decision a year ago to narrow the wealth tax - known in France as "ISF" - to a tax on real estate assets, rather than all of an individual's worldwide assets, from jewelry to yachts to investments, over the value of 1.3 million euros ($1.5 million).

The protests began on November 17 to oppose rising fuel taxes, but have ballooned into a broad challenge to French President Emmanuel Macron's perceived pro-business agenda and complaints that he is out of touch with the struggles of ordinary people. Taxes represent about 60 percent of the price of fuel in France. But, yet another tax increase was too hard to swallow for these working- and middle-class citizens who both feel-and objectively are-written off.

Citing unnamed sources, Les Echos business daily said the government was considering delaying corporate tax easing planned next year or putting off an increase in the minimum wage.

The movement has grown to reflect a range of grievances, including the marginalisation of rural areas, high living costs, and general anger at President Macron's economic policies.

One of the main measures implemented by the French government to boost business and investment after Macron's election past year was to set a flat tax of 30 percent on all capital income and remove the top marginal band of payroll tax. Scores of people were hurt and hundreds arrested in battles with police, Reuters reported.

The government has already acknowledged some of the concerns, suggesting it may review the "wealth tax" it abolished after taking power.

While most employees benefit from the tax cuts, nearly all retirees are worse off. Macron has said pensioners must make "a small effort" to help workers.

She said each of the disparate protesting groups will decide what to do next, but many will probably keep demonstrating. But since 2014 it has been growing again, according to statistics agency Insee.

Macron, the central target of the protests, has been largely invisible all week.

Government spokesman Benjamin Griveaux lamented that the wealthy often made a decision to invest outside France because of taxes.

"And we will continue to take a tough stance, we will fight the hatred and violence which is being expressed in such an incredible level of violence".

France bracing for more protests despite retreat on taxes