French government imposes a 75% tax on people earning above €1 million by making companies pay the levy, The Financial Times says citing French president François Holland. The president’s original proposal to impose the tax was blocked by France’s constitutional council and by the state council, the government’s legal watchdog.
François Holland said the measure would last for two years. He also admitted he would reduce capital gains taxes on investors selling businesses, which the government has raised to as high as 60%, prompting a furious outcry from start-ups and venture capitalists who formed an online protest group called Les Pigeons which can be translated as “the Suckers”.
In late January it was announced citing some anonymous sources, François Holland had decided to abolish the 75% tax on revenues above one million euros.
A month before France’s constitutional council rejected the supertax as it contradicted the constitution. The council laid down that it could not exceed 66%, or in other words the government could not confiscate more than two-thirds of a citizen’s revenue. Moreover, the tax should be applied to a restricted number of citizens which contradicts to the constitution.
The implementation of the 75% tax was in a bid to fulfil an election promise that was in the heart of Holland’s campaign last year. Opinion polls suggest the supertax is supported by 61% of French, however 21% consider the rate should be 75% and above. Amid the tax imposition some wealthy citizens moved from the country. The actor Gerard Depardieu and Bernard Arnault, the French richest man, left for Belgium.
