France's constitutional council has struck down a top income tax rate of 75% introduced by Socialist President Francois Hollande. Raising taxes for those earning more than 1m euros (£817,400) has been a flagship policy for Mr Hollande. The policy angered France's business community and prompted some wealthy citizens to say they would emigrate.
Mr Hollande's government said it would rework the tax, due to take effect in 2013, to meet the council's complaints. In its ruling on Saturday, the Constitutional Council said the new tax rate "failed to recognise equality before public burdens" because, unlike other forms of income tax, it was to be applied to individuals rather than households. For example, that meant a household in which one person earned more than 1m euros would pay the tax, but a household in which two people earned 900,000 euros each would not have to pay. The council also rejected new methods for calculating the tax.
But Prime Minister Jean-Marc Ayrault said the government would press ahead with the new tax rate. "The government will propose a new system that conforms with the principles laid down by the decision of the Constitutional Council," he said. The new rate was seen as largely symbolic since it would have only applied to some 1,500 people for a temporary period of two years. But along with other tax rises, it has still been the subject of fierce debate in France.
French actor Gerard Depardieu recently announced he was moving to Belgium to avoid taxes, sparking a furious reaction from some on the left. There was also speculation that people employed in high-income jobs like banking and finance would move elsewhere, including to London.
Mr Hollande campaigned against the austerity policies used in many European countries affected by economic crisis, favouring higher taxes rather than spending cuts to bring down the deficit. The 75% rate for high earners was included in the government's 2013 budget, approved by parliament in September.
Source: BBC
Mr Hollande's government said it would rework the tax, due to take effect in 2013, to meet the council's complaints. In its ruling on Saturday, the Constitutional Council said the new tax rate "failed to recognise equality before public burdens" because, unlike other forms of income tax, it was to be applied to individuals rather than households. For example, that meant a household in which one person earned more than 1m euros would pay the tax, but a household in which two people earned 900,000 euros each would not have to pay. The council also rejected new methods for calculating the tax.
But Prime Minister Jean-Marc Ayrault said the government would press ahead with the new tax rate. "The government will propose a new system that conforms with the principles laid down by the decision of the Constitutional Council," he said. The new rate was seen as largely symbolic since it would have only applied to some 1,500 people for a temporary period of two years. But along with other tax rises, it has still been the subject of fierce debate in France.
French actor Gerard Depardieu recently announced he was moving to Belgium to avoid taxes, sparking a furious reaction from some on the left. There was also speculation that people employed in high-income jobs like banking and finance would move elsewhere, including to London.
Mr Hollande campaigned against the austerity policies used in many European countries affected by economic crisis, favouring higher taxes rather than spending cuts to bring down the deficit. The 75% rate for high earners was included in the government's 2013 budget, approved by parliament in September.
Source: BBC
Which is why in the 1950s, when the USA's top tax bracket was taxed at 92%, there was no economic growth.
Seriously though, I'd be fine to pay that much in tax if it meant the upkeep of much needed public services like healthcare, welfare, schools, libraries, etc. Of course, I've needed these services myself, so I suppose I have the skewed view of one that relies primarily on public services and Government aid, because without it, I'd probably be dead.
Taxing the rich the most makes sense because they make more. Flat tax policies are bullshit.
it's not even a tax on wealth, just income
_p you disappoint me
(Edited to correct date)
Edited at 2013-01-03 05:06 pm (UTC)
also, according to the first site google gave me £817,400=$1,317,320 US dollars. I'm sure the poor dears will survive
I don't think it would have worked all that well, though, just led to an exode of the rich, which is the opposite of what we need rn. Maybe something not quite as dire as 75% coupled with a stronger exit tax? something like that.
Can we weep for that instead of French multimillionaires? This is where we should be crying for people, not the stinking rich!
Edited at 2013-01-02 11:01 pm (UTC)