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France may drop reference to 75-pct in supertax - govt source
January 2, 2013 / 6:21 PM / 5 years ago

France may drop reference to 75-pct in supertax - govt source

PARIS, Jan 2 (Reuters) - France is studying how to amend a proposed supertax on the rich after it was thrown out by a top court, and could abandon its reference to a special 75-percent tranche, a government source said on Wednesday.

On Dec. 29, the Constitutional Council ruled that the exceptional tax rate for those earning more than 1 million euros ($1.3 million) per year was unfair, rejecting what had been a flagship measure of President Francois Hollande’s election campaign.

The government is working to redraft the law taking into account the Council’s objections, notably that a 75-percent rate would weigh too heavily on high-earning individuals while sparing wealthy couples.

But it has yet to determine whether the reference to a 75 percent rate can be retained and has not established a precise timetable for introducing an amended law, the source said.

“At this stage, we’re still studying it,” the source said when asked about the 75-percent rate. An amended tax will be introduced “at the latest in the 2014 budget”, the source added.

Hollande’s Socialist government had touted the supertax as a way of making the wealthy contribute more to shoring up public finances. Critics said it would be counterproductive, bringing in relatively little money while driving away investors.

In a statement, Finance Minister Pierre Moscovici said the rejection of the wealth tax would cost the government 210 million euros in lost revenue in 2013. Other tax changes rejected by the Council include a rise in property tax, adding up to a total of around 500 million euros in lost revenue.

France’s total tax take for in 2011 was 44.2 percent of gross domestic product, or more than a trillion euros, according to the Organisation for Economic Cooperation and Development. ($1 = 0.7553 euros) (Reporting By Nicholas Vinocur; editing by Ron Askew)

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