French President François Hollande's plans for a 75% super-tax on the mega-rich, is causing major controversy after French football clubs said they would cancel all matches scheduled for the final weekend in November to protest at the levy.
The symbolic tax will last for only 2 years, aiming to claim 75% on income exceeding €1m (£850,000) a year. This has caused a headache for the Socialist government since it has been ruled un-constitutional by the French courts. In an attempt to avoid further embarrassment of a major policy U-turn, ministers redrafted the tax earlier this year to shift the burden from individuals to employers – this change in emphasis has spooked football clubs, which famously pay vast salaries even to bit-part players.
The clubs have argued that they are under intense financial pressures and are already losing money. It is believed the tax would results in a massive exodus of top players to rival leagues, effectively killing the domestic game. However, despite of the likely effect on the top French football leagues, 85% of the population are in favour of the tax and it being applied to football clubs.
Jean-Pierre Louvel, president of the Union of Professional Football Clubs (UCPF), announced on Thursday that the round of matches scheduled from 29 November to 2 December would not be played. He said: "It's a historic moment for French football. We're talking about the death of French football."
Football bosses estimate the tax would cost League 1 clubs €44m 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."
Defending champions Paris Saint-Germain - the biggest spending club owned by Qatari Billionaires - would be the worst hit with 21 salaries over 1 Million Euros, including the highest paid player in French football Zlatan Ibrahimovic. The other big clubs would also struggle including Lyon and Marseille.
French clubs have argued that the payroll taxes they pay 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?" Saint-Etienne president Bernard Caizzo told the Associated Press.
Ligue 1 clubs combined registered a loss of €108m at the end of the 2011-12 season. Last year, French clubs paid about €700m in social charges and image rights, which was more than they received in television rights, the UCPF said.
Despite all this the 75% super-tax – a temporary measure aimed at forcing the wealthy to help drag France out of its economic crisis – remains popular with voters. Talks are due to continue with the clubs and the French government, the clubs hope to come to an arrangement before they lose all their top talent if they cannot afford to pay them.
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