Wednesday

24th Jan 2018

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.

Thank you for reading EUobserver!

Subscribe now for a 30 day free trial.

  1. €150 per year
  2. or €15 per month
  3. Cancel anytime

EUobserver is an independent, not-for-profit news organization that publishes daily news reports, analysis, and investigations from Brussels and the EU member states. We are an indispensable news source for anyone who wants to know what is going on in the EU.

We are mainly funded by advertising and subscription revenues. As advertising revenues are falling fast, we depend on subscription revenues to support our journalism.

For group, corporate or student subscriptions, please contact us. See also our full Terms of Use.

If you already have an account click here to login.

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."

Visual Data

Europe's social democrats are having a hard time

All across Europe, social democratic parties are struggling to stay relevant, leading to a crisis in one of the continent's oldest political ideologies. An overview of the data behind the current situation.

Catalonia prepares for rule by Skype

The two biggest parties in Catalonia have vowed to put Puigdemont back in office despite Madrid's threat to maintain direct rule.

Catalonia prepares for rule by Skype

The two biggest parties in Catalonia have vowed to put Puigdemont back in office despite Madrid's threat to maintain direct rule.

News in Brief

  1. Japan-EU trade deal to start life by 2019
  2. Auditors criticise EU economic governance implementation
  3. Dutch environment group appeals air quality ruling
  4. Commission opens case into Polish railways state aid
  5. EU remove eight places from tax havens blacklist
  6. UK to keep forces in Germany over Russia fears
  7. Finnish presidential vote could go to second round
  8. Report: EU might pay Brexit residency fees for EU citizens

Stakeholders' Highlights

  1. European Free AlllianceNo Justice From the Spanish Supreme Court Ruling
  2. Nordic Council of MinistersNordic Solutions for Sustainable Cities: New Grants Awarded for Branding Projects
  3. Mission of China to the EUTrade Between China, Belt and Road Countries up 15%
  4. Nordic Council of MinistersOresund Inspires Other EU Border Regions to Work Together to Generate Growth
  5. Mission of China to the EUTrade Between China, Belt and Road Countries up 15%
  6. AJC Transatlantic InstituteAJC Calls on EU to Sanction Iran’s Revolutionary Guards, Expel Ambassadors
  7. Dialogue PlatformRoundtable on "Political Islam, Civil Islam and The West" 31 January
  8. ILGA EuropeFreedom of Movement and Same-Sex Couples in Romania – Case Update!
  9. EU2017EEEstonia Completes First EU Presidency, Introduced New Topics to the Agenda
  10. Bio-Based IndustriesLeading the Transition Towards a Post-Petroleum Society
  11. ACCAWelcomes the Start of the New Bulgarian Presidency
  12. Mission of China to the EUPremier Li and President Tusk Stress Importance of Ties at ASEM Summit

Latest News

  1. Berlusconi in Brussels on pre-election charm offensive
  2. ECJ should rule against Austrian online censorship lawsuit
  3. EU states loosen grip on tax havens
  4. Facebook promises privacy reboot ahead of new EU rules
  5. Europe is lacking tech leadership
  6. Spitzenkandidat system here to stay, MEPs warn capitals
  7. MEPs to keep 27 UK seats after Brexit
  8. Norway defends new Arctic oil drilling