Mon Dieu! Perhaps French actor Gerard Depardieu can come home from his exile in Belgium now that, as Mark noted below, he has been proven right in calling French president François Hollande’s new 75 percent top tax rate confiscatory. Depardieu had said he was leaving France “because you consider success, creativity, talent, anything different are grounds for sanction.”
If Hollande is savvy, he will view the court decision overturning the tax as a godsend. It prevents him from implementing a policy sop to his party’s left wing that was already driving the rich out of the country and further damaging France’s reputation as a place to do business. Gallic television station France 24 reports:
French President François Hollande was dealt an embarassing blow on Saturday when the country’s highest legal body scrapped his controversial 75 percent upper income tax rate.
The Constitutional Council announced it was overturning the 75 percent bracket on income over 1 million euros ($1.32million) because it was “excessive” and represented a “breach of equality of taxes.”
The French government responded to the decisions by insisting it would push on with plans to impose the reform and would be submitting a revised proposal for the 75 percent upper rate in its 2013 budget.
“The government will propose a new system that conforms with the principles laid down by the decision of the Constitutional Council. It will be presented in the framework of the next Finance Act,” Prime Minister Jean-Marc Ayrault said in a statement.
The council’s decision to ditch Hollande’s flagship tax reform came after members of the opposition UMP party had asked it to review whether the levy was legal under the constitution.
The Council members, known as “the sages” decided that the way the upper tax rate was set to be imposed was unfair in the way it would affect different households.
The Council is concerned the tax would hit a married couple where one partner earned above a million euros but it would not affect a couple where each earned just under a million euros. . . .
The measure, which Hollande insisted would only be a temporary move to help reduce public deficit, would only have to be paid by an estimated 1,500 people.
The tax reform was viewed as a symbolic move with Hollande keen for the rich to help the country during hard times. It is estimated the levy would have provided the government with an extra 210 million euros per year.