Sanity in France: French court tosses 75% “millionaires’ tax”

Posted by: ST on December 29, 2012 at 11:09 am

France doesn’t often get it right, but a French court did in this case:

France’s Constitutional Council on Saturday rejected a 75 percent upper income tax rate to be introduced in 2013 in a setback to Socialist President Francois Hollande’s push to make the rich contribute more to cutting the public deficit.

The Council ruled that the planned 75 percent tax on annual income above 1 million euros ($1.32 million) – a flagship measure of Hollande’s election campaign – was unfair in the way it would be applied to different households.

Prime Minister Jean-Marc Ayrault said the government would redraft the upper tax rate proposal to answer the Council’s concerns and resubmit it in a new budget law, meaning Saturday’s decision could only amount to a temporary political blow.

While the tax plan was largely symbolic and would only have affected a few thousand people, it has infuriated high earners in France, prompting some such as actor Gerard Depardieu to flee abroad. The message it sent also shocked entrepreneurs and foreign investors, who accuse Hollande of being anti-business.

Finance Minister Pierre Moscovici said the rejection of the 75 percent tax and other minor measures could cut up to 500 million euros in forecast tax revenues but would not hurt efforts to slash the public deficit to below a European Union ceiling of 3 percent of economic output next year.

“The rejected measures represent 300 to 500 million euros. Our deficit-cutting path will not be affected,” Moscovici told BFM television. He too said the government would resubmit a proposal to raise taxes on high incomes in 2013 and 2014.

The Council, made up of nine judges and three former presidents, 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.

UMP member Gilles Carrez, chairman of the National Assembly’s finance commission, told BFM television, however, that the Council’s so-called wise men also felt the 75 percent tax was excessive and too much based on ideology.

Note the unmistakable “what’s the big deal about it?” bias from Reuters with this sentence: “While the tax plan was largely symbolic and would only have affected a few thousand people…”, and the Associated Press couldn’t help itself either here with a similar dig:

The largely symbolic measure would have only hit a tiny number of taxpayers and brought in an estimated €100 million to €300 million – an insignificant amount in the context of France’s roughtly €85 billion deficit.

Our left wing media simply can’t help themselves when it comes to wanting to punish “the rich”, can they?

Anyway, three cheers for the French court, but I can’t help but wonder: How soon before the United Socialists of America aka the Democratic Party proposes something similar here in the US?  Since the leader of their their party – our celebrity President –  believes “at a certain point you’ve made enough money” and all …

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9 Responses to “Sanity in France: French court tosses 75% “millionaires’ tax””

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  1. Phineas says:

    Call it “one small step for France….”

    They’ll never fix their economy and generate real wealth until they deal with their sclerotic labor laws that make it far too hard for businesses to adapt to changing circumstances and give unions far too much power.

  2. Dana says:

    As long as the Republicans control the House of Representatives, it won’t happen, but who knows if that’ll last beyond the 2014 elections?

  3. Fausta says:

    Well, then, if it’s “largely symbolic”, doesn’t that mean it’ll solve none of the national budget’s problems, then?

  4. Jay Stevens says:

    If “it’s not a big deal”, why institute it ?

  5. Tex says:

    Those French Socialists are brilliant! Nothing could possibly bring more money and investment into France like the state confiscating it from those who have it! I mean just look at the huge economic success Hugo Chavez has turned Venezuela into using the same techniques in the past 13 years. And let’s not forget those other economic powerhouses like Cuba and North Korea where they’ve practiced this same technique much longer.

  6. redneek24 says:

    How can we those judges over here?

  7. And all this time we thought we would be the next Greece. It would be nice to revert to being the good old US of A.

  8. Carlos says:

    France’s problem, just like in all of socialist Europe, isn’t an income problem, it’s a spending problem. focusing on just the income while ignoring the real problem makes as much sense as, say, what has been proposed by the smartest man alive for his country, the good ol’ U.S. of A.

    It’s time to kick the butts of every jerk in government who has for decades kicked the can down the road hoping the next Congress would “fix” the spending problem because they weren’t willing to stop trying to buy votes with their own spending.

    To borrow a famous phrase from the early 90s, “It’s the spending, Stupid!”