Government proposal to tax those earning more than €1m at 75% has divided public opinion and led some to leave France
The French constitutional council has rejected a government proposal to levy a 75% tax on high earners.
The tax on incomes over €1m has divided opinion in France and encouraged some to set up homes outside France.
The actor Gérard Depardieu bought a house in Belgium, prompting the French prime minister, Jean Marc Ayrault, to say: "It's pathetic really. Paying taxes is an act of patriotism and we're asking the rich to make a special effort here for the country."
In response Depardieu offered to give up his passport.
The government will redraft the tax proposal and resubmit it, Ayrault's office said on Saturday. The council's ruling would not obstruct the government's determination to reduce the public deficit, it added.
The high tax rate was the centre piece of President François Hollande's election campaign earlier this year but it has infuriated France's high earners, many of who have already moved to cities such as London.
The constitutional council is a politically independent body that rules on whether laws, elections and referendums are constitutional. It is made up of nine judges and three former presidents, and is concerned the tax would hit a married couple where one partner earned above €1m but it would not affect a couple where each earned just under €1m.
Ayrault's comments to Depardieu prompted him to write an open letter to the prime minister: "I am leaving because you consider success, creativity and talent grounds for sanction," he wrote.
Depardieu said he had paid more than €170m in taxes over the last four decades. He said he no longer recognised his country and offered to surrender his passport if he was, indeed, so pathetic.
Earlier this month, Edouard Leclerc, the founder of one of France's biggest supermarkets, said that the government's attitude to the rich recalled the rhetoric of the French Revolution.
"Whether you like Depardieu or not is not the point," he said. "It's this government's fiscal campaign against those who make money in this country. Maybe it's not 1789, but there will be plenty of rich leaving France. And there is a frightening populism on the rise."
Source: http://www.guardian.co.uk/world/2012/dec/29/france-constitutional-court-rejects-tax-rate
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