Millionaire Tax

French Socialists struggle with millionaire tax

by  |  published on January 9, 2013

France’s ruling Socialist government was struggling to rebound a week after the Constitutional Council struck down its law to tax the country’s highest earners at a 75% rate, with government ministers publicly disagreeing on how to rescue one of President François Hollande’s flagship measures.

On Sunday, Finance Minister Pierre Moscovici told France Inter radio that the bill was being re-written and that it would be an “exceptional, temporary” law that should not outlive France’s current economic slump.

Moscovici’s words appeared to contradict comments made earlier in the day by Budget Minister Jérôme Cahuzac, who spoke of a “permanent” tax that would be on the books no later than the autumn of 2013.

In late December, France’s top court ruled against a law that would have taxed individual revenues above 1 million euros per year at 75%, claiming that the move was “excessive” and would unfairly target certain households because it singled out individuals instead of couples who file taxes jointly.

Following the decision, Hollande said a new bill would be rewritten “in the same spirit” as the law scrapped by the top court.

“Clearly it was a slap in the face for Hollande, who was personally attached to the measure,” said Céline Bracq, deputy director of BVA Opinion, a French polling agency. “We learned after the May elections that the 75% tax was Hollande’s own idea, not one of his advisors’ proposals. This was his big symbolic measure.”

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