French 75% Income Tax Rejected On Legal Technicality, Take 2 In the Making
The 75% tax rate proposed for France’s top tax bracket, introduced by Communist President Francois Hollande, has been rejected by France’s constitutional council. Raising taxes for many in France (those making 1m euros and more) has been a central policy objective of Mr Hollande.
Mr Hollande’s government will now reshape the proposed taxes for 2013 so as to meet council requirements. The constitutional council said that the new tax “failed to recognize equality before public burdens” since it was applied to individuals rather than households. So, you see, scantily a moral qualm, the bill has not passed on a technicality of language. Likely it is, then, that a very similar bill will be passed.
In fact, the court did not say that the 75 percent tax rate was too high. The income tax must simply be reshaped. Bureaucratic incompetence is the reason for the delay in passage.
“The government will propose a new system that conforms with the principles laid down by the decision of the Constitutional Council,” Prime Minister Jean Marc Ayrault said.
The new rate, practically speaking, will do nothing to raise sufficient revenues to aid the French economy, for the tax will only be levied upon 1,500 people for a temporary period of two years. But, it is merely one bill of many aiming to recraft the French tax system.
The French economy is doing what any state-commanded economy would do: turn to regulation. Official figures posit output increased by a mere .1 percent in the third quarter of 2012 – less than the 0.2 percent previously reported and below the .9 percent meager growth in Britain. French unemployment has increased to 3.13 million, near the record of 3.2 million.