Sunday

3rd Dec 2023

Hollande's millionaire tax struck down

  • The 75% tax proposal was important for Hollande's credibility (Photo: Francois Hollande)

French president Francois Hollande suffered a major political blow over the weekend when his flagship policy to heavily tax the very rich was struck down.

The Constitutional Council on Saturday (29 December) ruled that the tax - 75 percent for those earning over one million euros a year - was unconstitutional because it taxed individuals rather than households.

Read and decide

Join EUobserver today

Become an expert on Europe

Get instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe as a group

The loss of the tax, which would only have applied to around 1,500 individuals, is more politically than fiscally important.

The tax featured during Hollande's presidential campaign in spring and was one of the first pieces of legislation to be worked on when he came to office.

But although the predicted revenue from the levy was small, the outfall was loud.

Several rich French citizens - among them actor Gerard Depardieu - said they would move abroad, most notably to neighbouring Belgium.

Hollande's government has played down the council's ruling and said it would look at ways to re-table the tax in 2013. "We're not giving up," finance minister Pierre Moscovici told Journal du Dimanche.

But the Council's ruling that the levy should apply to households would considerably extend the number of people affected.

The centre-right opposition - until now riven by infighting over its leadership contest - has seized on the ruling with politicians lining up to denounce the "incompetency" of the government or the premise of the law.

The law formed part of Hollande's plan to bring the country's budget deficit below three percent of GDP in 2013, required by EU rules and important for its overall relations with fiscally austere Germany.

Despite the fact that the council did not strike down other parts of the government's tax policy, such as a rise in capital gains tax, next year is unlikely to be much easier for Hollande.

Unemployment remains high at over 10 percent and while the government is hoping for a return to economic growth this year - critics have denounced the estimates as too optimistic. Meanwhile Hollande's own popularity is flagging.

The president is due to give a televised address on Monday evening in which he outlines his hopes for the coming year. But according to Le Figaro newspaper "there is nothing good to announce for 2013."

Hollande: '€30 billion must be found'

French Socialist President Francois Hollande has outlined a two-year plan to overhaul the country's stagnating economy and to boost employment.

Opinion

The promise and challenge of Francois Hollande

The election of Francois Hollande as President of France could be an important turning point for Europe, but only if he broadens his agenda beyond the rhetoric of his campaign, writes Daniel C. Thomas.

France in turmoil over tax-dodging minister

The scandal over France's tax-evading budget minister is threatening to engulf Hollande's government, which had promised an "irreproachable republic."

Brussels denies having no 'concern' on Spain's amnesty law

The Spanish government remains secretive about its negotiations with pro-independence Catalans, but claims the EU Commission has "zero concerns" about their proposed amnesty law for Catalan separatists. The EU executive denies that.

Interview

Why populism appeals to less brainy EU voters

People who voted for Brexit tended to be less clever, research shows, in findings that also shed light on the appeal of EU populists, such as Dutch politician Geert Wilders, who won elections this week.

Opinion

'Pay or okay?' — Facebook & Instagram vs the EU

Since last week, Mark Zuckerberg's Meta corporation is forcing its European users to either accept their intrusive privacy practices — or pay €156 per year to access Facebook and Instagram without tracking advertising.

Latest News

  1. Israel's EU ambassador: 'No clean way to do this operation'
  2. Brussels denies having no 'concern' on Spain's amnesty law
  3. Dubai's COP28 — a view from the ground
  4. Germany moves to criminalise NGO search-and-rescue missions
  5. Israel recalls ambassador to Spain in new diplomatic spat
  6. Migrant return bill 'obstructed' as EU states mull new position
  7. Paris and Berlin key to including rape in gender-violence directive
  8. What are the big money debates at COP28 UN climate summit?

Stakeholders' Highlights

  1. Nordic Council of MinistersArtist Jessie Kleemann at Nordic pavilion during UN climate summit COP28
  2. Nordic Council of MinistersCOP28: Gathering Nordic and global experts to put food and health on the agenda
  3. Friedrich Naumann FoundationPoems of Liberty – Call for Submission “Human Rights in Inhume War”: 250€ honorary fee for selected poems
  4. World BankWorld Bank report: How to create a future where the rewards of technology benefit all levels of society?
  5. Georgia Ministry of Foreign AffairsThis autumn Europalia arts festival is all about GEORGIA!
  6. UNOPSFostering health system resilience in fragile and conflict-affected countries

Join EUobserver

Support quality EU news

Join us