France’s Constitutional Council on Sunday upheld President François Hollande’s “millionaires' tax”, a 75-percent levy to be paid in 2013 and 2014 by companies on their portion of wages exceeding 1 million euros.
The so-called “millionaires' tax” has become a symbol of Hollande’s campaign promise to make France fairer for the middle class by forcing the mega-rich to do more to pull the country out of crisis.
The government’s initial plan consisting of a 75-percent tax to be paid by high earners on the part of their incomes exceeding 1 million euros was struck down in December 2012 by members of the Constitutional Council, who argued that 66 percent was the legal maximum for individuals.
The Socialist government has since reworked the tax to levy it on companies instead, infuriating business leaders and football clubs.
Under its new design, which the Council found constitutional, the tax will be an exceptional 50 percent levy on the portion of wages exceeding 1 million euros paid in 2013 and 2014.
Including social contributions, its rate will effectively remain roughly 75 percent. The tax will, however, be capped at 5 percent of the company’s turnover.
The Council, a court made up of judges and former French presidents, has the power to annul laws if they are deemed to violate the constitution.
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