Can we
switch our Supreme Court with the French Court?
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.
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