Sarkozy to raise consumer taxes in France

President Nicolas Sarkozy, insisting that he was acting as a head of state — not a presidential candidate — announced Sunday that he would raise consumer taxes to make French companies more competitive and reduce the national budget deficit, the New York Times reports.

He said he would increase the basic consumption tax by 1.6 percent, to 21.2 percent, while imposing a 0.1 percent tax on financial transactions and raising by 2 percentage points the taxes paid on financial profits. Mr. Sarkozy also announced measures to increase the number of apprenticeships for young people, to increase construction of low-income housing and to create an “industry bank” to make cheaper loans to small and medium companies, reports the source.

The new tax revenues would let the state take over payment of some worker benefits now paid for by employers, helping to lower high labor costs for companies and make products made in France more competitive, the Washington Post reports.