Tax banks, hire teachers: France's new agenda

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France poised to 'tax & spend' as Socialist Party wins big

EU Parliament member Daniel Hannan reacts

PARIS – France is now officially a land of the left, and the next parliament is set to prove it with a raft of new taxes on the powerful and increased spending on youth.

President Francois Hollande's plans for France appear headed for smooth sailing after fellow Socialists unseated a 10-year-old conservative majority in weekend parliamentary elections. That means Socialists now run the presidency, both houses of Parliament and most of France's regional and local governments.

Hollande mapped out a leftist agenda for what he wants the new parliament to do within the next six weeks — much of it rolling back changes Sarkozy made to try to boost France's competiveness that Socialists saw as too friendly to the executive classes and hard on the rest of the population.

Here are some highlights:

TARGET CORPORATE TITANS

Sweeping changes to the 2012 budget would bring immediate new tax revenue. The Socialists want to end tax breaks and raise tax rates on profits by banks and oil companies, who bear the brunt of public anger over the financial crises that have hit Europe and the global economy in recent years. The Socialists would lower taxes for small businesses, making them progressively higher as the size of the business grows. They also want banks to separate their retail activities from their speculative activities.

HIRE NEW TEACHERS

After 14,000 job cuts in education last year alone, the Socialists want to turn the tide and invest new government money in schools. They propose a long-term program to include 60,000 new jobs in public and private schools — with 1,000 teachers hired by the time school starts in September. Defending the cost at a time when France is trying to control its debts, Hollande says every job created would be balanced by an eventual job cut elsewhere in France's large public sector. Sarkozy's government had argued that the education system was bloated and inefficient and stifled innovation. The Socialists say the Sarkozy-era cuts hit the neediest children and poor, rural families particularly hard.

TAX THE RICH

The most eye-catching pledge of Hollande's presidential campaign was one to hike income taxes to 75 percent for those earning more than €1 million a year. He would also create a 45-percent tax bracket for those making between €150,000 and €1 million a year. The pledges have prompted fears of an exodus of wealthy footballers and pop stars to lands beyond the French border. Most voters see the tax as a powerful message that the rich aren't exempt from the belt-tightening called for in strained economic times. Other proposed measures would tax capital gains at the same level as income, and abolish tax breaks for large inheritances.

DELAY BALANCING THE BUDGET

This one is likely to send chills up German Chancellor Angela Merkel's spine: The first thing Hollande wants Parliament to do is pass a new law delaying the target for a balanced budget to 2017. Merkel and Sarkozy had pushed for balanced budgets across the eurozone as part of their effort to stem the region's debt crisis, and Sarkozy had aimed for 2016. But the budget squeeze led to cuts in pay, pensions and other spending that hurt many voters. France's Socialists say the government needs to spend money to ensure economic recovery first before it can promise a balanced budget.

AND THEN?

Hollande wants to lay the groundwork in July for the thornier issues of changing labor laws, creating jobs for young people and reducing France's overwhelming dependence on nuclear energy. He's already lowered the retirement age to 60 for some workers but acknowledges changes are needed to the indebted pension system. Sometime over the next year, he's pledged to push laws to legalize gay marriage and assisted suicide, neither of which would have ever passed in the outgoing conservative-led parliament.