Millionaire Tax Called Off in France

December 31, 2012 Taxation in France

François Hollande et Stéphane Hessel aux Journées de NantesPARIS – Nearly 1 500 of the richest people in France are breathing a sigh of relief this New Year’s day, as the government’s plan to hike taxes on the ultra-rich is ruled to be unconstitutional.

With only days left in 2012 the government of France has suffered a setback to its plan of raising tax rate on the incomes of individuals earning above EUR 1 million per year to 75 percent, after the Constitutional Council of France announced on December 29th that the proposed hikes were unfair and could not be implemented.

The measure was found to be unconstitutional as it was calculated on individuals’ incomes and not households’ incomes, as is normal in France.

The Prime Minister of France Jean-Marc Ayrault has already vowed that the government will reconsider the details of the proposed measure, and rework the legislation in line with the Council’s suggestions.

Jean-Marc Ayrault did not comment on when the new proposal will be revealed, but insisted that the government will continue to strive to enact a 75 percent tax rate on the incomes of the country’s richest citizens.

If the tax is implemented in the future with the same earnings thresholds, the measure is expected to affect approximately 1 500 people in the country.

Photo by jmayrault