The measure, which the newspaper said would raise close to €1.4 billion ($2.06 billion), is expected to come into force by the middle of 2009. The investment tax would affect rental property revenues as well as dividends, life insurance and other investment income and would come on top of existing levies to make up the bulk of the extra funding required.

Budget Minister Eric Woerth declined to provide details ahead of an expected announcement by Sarkozy on Thursday but broadly confirmed the report. “To be able to finance it completely obviously requires additional funding and the avenue indicated is clearly a serious one,” he told France Info radio.

The so-called RSA, or Active Solidarity Revenue, aims to help people who would risk losing money by going back to work that paid less than the unemployment benefits they received. The cost of the measure, which is expected to concern 3-4 million people, is estimated at around €8.5 billion, of which 7 billion has already been set aside. (Reuters)