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French government coy on new super tax

Published: 04 Feb 2013 16:50 GMT+01:00
Updated: 04 Feb 2013 18:18 GMT+01:00

President François Hollande’s much publicised 75% tax on those earning more than €1 m was thrown out by France’s highest legal ,the Constitutional Council, in December on the grounds it was unconstitutional.

The council, known as "Les Sages", ruled the law was unconstitutional, partly because it applied to individual rather than household income, so was not consistent with France's usual method of taxation.

Last week Prime Minister Jean-Marc Ayrault was forced to deny reports that the government had decided to scrap the tax and on Monday Moscovici said details of the redesigned levy would be revealed by the "end of February".

However he refused to be drawn on whether it would remain at 75 percent, saying only it would be in the "same spirit" as the previous proposal.

According to a report by Europe 1 radio, Moscovici has been working with the PM to devise a tax plan that will avoid a second rejection from the constitutional council.

“I don’t want to risk censure again, and I’d like to stay close to the principles defined by the Constitutional Council,” said Moscovici.

If the tax is adjusted to affect households rather than individuals it would effectively increase the number of people affected by the new tax from 2,000 to 15,000, which have an impact on the popularity of what was Hollande's flagship pre-election pledge.

A source close to the president told Europe 1 on Monday that he would consider it "politically impossible" to abandon the hike on wealthy tax-payers.

A recent BVA poll for France’s i-TELE found that 61 percent of French people supported in principle the idea of a separate tax on earnings over €1 million, but only 21 percent thought the rate should be at 75 percent or above.

Dan MacGuill (dan.macguill@thelocal.com)

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