Irony abounds in this decision by the French Supreme Court. The reason the 75% French tax rate on incomes above a million euros is unconstitutional is because it fails to guarantee “taxpayer equality.”
In short, it’s a fairness issue.
President Obama should love this decision, then, right?
President Francois Hollande’s 75 percent millionaire-tax is unconstitutional because it fails to guarantee taxpayer equality, France’s top court ruled today.
The tax, one of Hollande’s campaign promises, had become a focal point of discontent among entrepreneurs and other wealth creators, some of whom have quit French shores as a result. The ruling comes as the president seeks to cut France’s public deficit to 3 percent of gross domestic product next year from a projected 4.5 percent this year.
“Politically, this has an impact because it was a symbol for French public opinion, and was considered abroad as the emblem of French tax excess, of French tax hell,” said Dominique Barbet, senior economist at BNP Paribas SA in Paris. “In deficit terms, it’s truly negligible.”
The court said Hollande’s plan would have added extra levies of 18 percent on individuals’ incomes of more than 1 million euros ($1.32 million), while regular income taxes and a 4 percent exceptional contribution for high earners would have been based on household income, an e-mailed statement shows.
As a result, two households with the same total revenue could end up paying different rates depending on how earnings are divided among members of those households. That runs counter to a rule of equal tax treatment, the Paris-based court said.
[…
The constitutional court lowered a series of other tax increases, calling them excessive or saying they also violated equality of treatment for taxpayers. The tax rate on stock options and free shares was lowered to a maximum of 64.5 percent from a rate of as much as 77 percent. The marginal tax rate on a type of private retirement benefit, known as “retraites chapeau,” was cut to a maximum of 68.34 percent from a planned rate in 2013 of 75.34 percent.
Looking at France’s wealth tax, the court said that unrealized gains couldn’t be included in assessing the tax because it ignores the requirement to take into account a payer’s ability to meet his obligations.
Hollande called on the “patriotism” of the country’s rich to do their part during Europe’s more than three-year-old financial crisis.
A new tax proposal will be presented next year and will apply to earnings for 2013 and 2014, Finance Minister Pierre Moscovici said on BFM television.
The government “will present a new proposal in line with the principles laid down by the Constitutional Court…” so chances are that some kind of tax on the rich will be implemented. But along with President Hollande’s other soak the rich schemes, it will probably realize far less in actual revenue than has been planned by the government. Those who earn just over or under a million euros will try their best not to reach that number in order to avoid the tax. And there will almost certainly be continued flight from France by wealthy and successful Frenchmen who don’t feel like handing over such a large segment of their income to a profligate, socialist government.
Will they ever learn?
“Looking at France’s wealth tax, the court said that unrealized gains couldn’t be included in assessing the tax because it ignores the requirement to take into account a payer’s ability to meet his obligations.”
Sounds like that could be used to rein in the Death Tax in the US. Obama wants to increase the rate and lower the floor from $5million to $1million. With that reasoning, the tax bill would have to be limited to what the inheritors could afford to pay WITHOUT selling the asset such as a farm or business.
Never happen though.
Yes.
I’m sure Uncle Warren Buffett is simply slobbering over all those “distressed” businesses he can pick up on the cheap.
That is his business, after all: the government beats you up and holds you down, and Warren picks all your pockets,then fires you.
But Mittens was a bad guy.
I am working on some things that should benefit both society and myself. I am financially sacrificing now, as well as sacrificing quality of life. What I am doing is not anything I overly love, but it does show the strong potential to be beneficial to society, and perhaps renumerative, though there is no absolute guarantee. There is a very real chance my income could from minimal to substantial, to be in the range being discussed here. I incidentally did a hitch or two in the Armed Forces. The odds I’ll ever be able to do what I truly have always wanted to do are slim–that what I am doing is not my dream, but good for society nonetheless.
If I do become successful, I don’t think I’m going to appreciate Herr Barack telling me I haven’t pulled my weight in society unless I bend to his knees so he doesn’t have to lose support among his base. I find it offensive, especially given the sacrifice always entailed in bringing any new enterprise into being. I have other things I intend to do after this first venture gets off the ground, but given the sacrifice involved, and the amount of time it took, I’d really like to perhaps just retire and enjoy my life for a while. Perhaps if Barack Obama could show some republican frugality with his jet-setting and flying the missus to whatever vacation spot she wishes this week, but he can’t.
So…after the first venture, subsequent ventures will depend upon reception by this society that thinks sitting on its ass watching American Idol and having children out of wedlock–mere existence, in other words–entitles it to be supported by others, whom it will demonize if they don’t support in a level sufficient for a lifestyle others would like to become accustomed to. And given that the Bible tells us to always understand “who knowest the “hour”, I have decided, that since society has an issue with who should get the real rewards for labor, that any ideas left unstarted at my death will never see the light of day, since my family is currently taken care of.