A tax on the rich proposed by President François Hollande when he campaigned for the presidency may not be quite as draconian as initially feared, according to a new report.

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As a candidate, the Socialist party leader promised in February to slap a 75 percent tax on all French residents earning more than one million euros a year.

But Le Figaro says the measure will be softened after heavy lobbying from business executives and tax experts who warned that such measures would threaten France’s competitiveness.

Over the summer, rumours multiplied about large French corporate groups moving entire management teams out of the country.

The tax now will be less onerous, says Le Figaro online, noting that it had obtained information indicating the tax will only apply on salaries from work.

Revenue from capital — gains from share sales, real estate, dividends and interest — will be exonerated, the right-of-centre journal says, without citing sources.

That would mean that an entrepreneur selling a company would escape the famous 75 percent tax on gains realized from the sale.

Not everything has been finalised in the tax changes to be included in the Socialist government’s budget plan for 2013, Le Figaro says.

But according to its information, while the 75 percent levy will apply to singles who earn over a million euros, it will only be levied on household income above two million euros in the case of married couples or families with children.

Le Figaro notes that the tax will also integrate existing taxes such that its real effect would be closer to 67 percent.

Its impact will principally be on the heads of France’s biggest companies, the newspaper concludes, adding that it still poses a dangerous risk that could lead top managers to flee the country.

When he first announced the 75 percent tax, Hollande said he backed the step after learning of the “considerable progression of pay for the bosses of the CAC 40 (France’s biggest companies listed on the stock exchange), two million euros a year on average”.

Meanwhile, on a related issue, Le Figaro reports that the Socialists will not be cutting taxes for small and medium sized businesses as promised, at least not next year.

While campaigning Hollande said he wanted to change the current 33 percent company tax so that large firms would pay 35 percent, with 30 percent for small and medium-sized companies and 15 percent for the smallest companies.

Officials from Bercy, the treasury headquarters, have decided to delay implementation of this formula until after the 2013 budget, according to the report.