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