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FRANCE’S TOP CONSTITUTIONAL body has struck down a 75 per cent upper income tax rate, dealing a major blow to Socialist President Francois Hollande, who had made it his centrepiece tax measure.
The government vowed to push ahead with the tax rate, which would apply to incomes over €1 million a year, and propose a new measure that would conform with the constitution.
The tax rate had angered business leaders and prompted some wealthy French citizens to seek tax exile abroad, including actor Gerard Depardieu who recently took up residency in Belgium.
The Constitutional Council said in its ruling that the temporary two-year tax rate, due to take effect next year, was unconstitutional because unlike other forms of income tax it applied to individuals instead of whole households.
As a result, the council said, the tax rate “failed to recognise equality before public burdens”.
Though largely symbolic – it would have applied to only about 1,500 individuals – the Socialists said the tax rate was aimed at making the ultra-rich contribute more to tackling France’s budget deficit.
It was a flagship promise of the election campaign that saw Hollande defeat right-winger Nicolas Sarkozy in May.
“The government will propose a new system that conforms with the principles laid down by the decision of the Constitutional Council. It will be presented in the framework of the next Finance Act,” Prime Minister Jean-Marc Ayrault said in a statement after the ruling.
The Constitutional Council also rejected new methods for calculating a separate wealth tax, striking down a provision that would have increased the amount of taxable revenues and capital gains.
Other new measures in the budget were approved, however, including an increase in some upper tax rates to 45 per cent and the addition of capital gains to taxable income.
Finance Minister Pierre Moscovici told AFP the ruling “does not compromise” budget efforts and said the council had approved “the essential” of the government’s economic policies.
Criticisms
But government critics hailed the ruling as proof the Socialists are pursuing unfair tax policies.
“While the whole world watched us in dismay, Francois Hollande deceived the French into believing that ‘taxing the rich’ would be enough to solve our country’s problems,” said the head of the right-wing opposition UMP, Jean-Francois Cope.
“In reality, discouraging entrepreneurs and punishing the most wealthy until they leave our country inevitably puts the tax burden on the middle class. This moral error was sanctioned today.”
France is struggling to plug a €37 billion in its public finances to meet its target of reducing the budget deficit to the EU ceiling of three percent in 2013.
The 2013 budget included €12.5 billion in spending cuts and €20 billion in new taxes on individuals and businesses.
Critics have said the new tax measures will stifle economic growth, with the French economy already expected to contract by 0.2 per cent in the final quarter of this year.
The 2013 budget is based on a government forecast of 0.8 percent economic growth next year — a figure many economists consider too optimistic.
Hollande has seen his popularity plummet in recent months as the economy stagnates and unemployment mounts.
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Vita cortex worker hold a protest today between 12.30 to 1.30pm at Vita Cortex, Kensale rd, Cork. And can be followed on twitter at @vcortexworkers and on facebook. Best of luck to them
The government were right to stop companies like vita cortex shafting the tax payers of Ireland. SIPTU need to stand up and be a union instead of sleeping with companies and government, these workers need assistance and need it now. SIPTU want to knock liberty hall and rebuild on the back of membership it’s time they put people first and get the fat cats out of siptu.
SIPTU are SCUM, They shafted us when the company was profitable and still is. There is only a very small group left out of hundreds still paying dues to them.
Peter murphy we the people of this country need more people like you in running this shit hole that they have turned it into and i mean the politicians
A national disgrace that these people can be treated like this, losing their livelihood is hard enough without their entitlements being attacked, where the hell is the Govt support,hand billions to foreign gamblers and allow our own to be treated so wrongly, every worker in the country should be supporting them-beware precedence.
Couldn’t agree more rodger.
How right u are Roger if this kind of unfair treatment of people is allowed to happen in this case then it will continue to happen & then it will become the norm
Surely siptu can help these people out in the mean time financially. The guys at the top of these unions are making a small fortune and are out of touch with reality. How well they appear on the tv all the time shaking hands to be noticed. And why the he’ll do they love facial hair so much?
The very best of luck to you all and stick with it
As the daughter of one of the workers I’d like to thank everyone for their kind words and support.my father worked forty years for cortex and gave his every waking hour to these people when he wasn’t home taking care of us.that was my dad work and family and he was happy as Larry,so to see him older now,not as physically healthy as he was in younger years ,having to worry and fight for what he’s owed sickening.so again thank you all and positive comments and support is what these workers can benefit from right now as they continue the fight that will make all of our future employers think twice before robbing us.cheers to the vita cortex workers for taking a stand for all of us.
Leah, I used to work with your dad at cortex. He’s a lovely man and I saw how much he gave to the company – he doesn’t deserve to be in this position. I hope they get this sorted out soon.
SIPTU my bollox !
Maybe SIPTU will campaign against Labour/Fine Gaels austerity measures that target the needy, the unemployed and the most vulnerable of ! Social leaders…… What social leaders leaders !!!!!!
Social Democracy doesn’t change society equitably ! it tweeks it so as to appear to care !!!
that is “vulnerable of society” sorry !
Not sure whether to call Jack O Connor a puppet or a muppet because he does both so brilliantly. I too cancelled my subs about 4yrs ago. Emancipation!!
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