Mar 24, 2013 4:21 AM GMT
France Drops 75% Tax on Rich
The notion of slapping a 75% marginal tax rate on those earning over €1 million ($1.3 million) a year has been on shaky ground ever since the country's top constitutional authority shot it down in late December on the grounds that applying it to individuals and not households was illegal. The ruling came as a political blow to Mr. Hollande, who had vowed to make the tax a key plank of his platform that called for greater fiscal justice.
Dropping the tax plan is the latest challenge for the Socialist president, who is struggling to revive France's stalled economy, with unemployment above 10% and rising. Mr. Hollande acknowledged earlier this month that he would not lower France's budget deficit to 3% of annual output this year, another key economic pledge, instead projecting a wider shortfall of around 3.7%.
This week, Budget Minister Jerôme Cahuzac stepped down after prosecutors launched a formal investigation into allegations of money laundering and tax evasion against him, dealing another blow to the president, who vowed during his campaign to run an "exemplary republic."