France 'Millionaire Tax' Approved: High Income Earners to be Taxed 75 Percent
Actor Gerard Depardieu will not be pleased: A top French court approved President Francois Hollande’s "millionaire tax" Sunday, ruling that companies with salaries of $1.55 million must now pay a 75 percent tax. Hollande had announced plans for the controversial tax during his presidential campaign back in February of 2012, but a previous version had been rejected by the court last year for violating the constitution. The new, record-high tax brings Hollande’s vision of a more middle-class France one step closer to reality, even as the country continues to struggle with its economy.
According to the new legislation, companies will now be taxed 50 percent on wages that go over $1 million, which, combined with other taxes already in place, will essentially come to 75 percent of salaries. The tax is likely to affect roughly 470 companies, as well as about 12 soccer clubs, but will, according to estimates, raise roughly $325 million a year — the hope being to lower the public deficit from 4.1 percent of the GDP to 3.6 percent. Still, the tax will be capped at only 5 percent of the company's revenue.
“The companies that pay out remuneration above 1 million euros will, as expected, be called upon for an effort of solidarity on remuneration paid in 2013 and 2014,” said the Economy Ministry.
In December 2012, the French Constitutional Council, which is made up of judges and ex-French presidents, rejected a previous version of the tax which was focused on individuals instead of companies, on the grounds that it violated the constitution, ruling that the legal limit for individuals was 66 percent. At the time, many of France's wealthier citizens had publicly criticized the proposal, with actor Gerard Depardieu even leaving the country in protest.
"I am leaving because you consider that success, creation, talent, anything different, must be punished," Depardieu said at the time, in response to Hollande, adding that he had given over 85 percent of his revenues in taxes in 2012.
In America, a surprising amount of people support higher taxes on the rich, including the rich themselves. A December 2012 poll by American Express Publishing and The Harrison Group found that an astounding 67 percent of America's wealthiest approve of higher income taxes, up from 62 percent that summer. In New York, where the city's wealthy are already among the highest taxed in the U.S., a recent Quinnipiac poll found that 63 percent of New York state voters support Mayor-elect Bill de Blasio’s plan to tax the rich to pay for pre-K, with 59 percent of people who make over $100,000 also backing it.
"I think it's time that that they give us a little more so we can make the kind of investments we need for our future," De Blasio told reporters in October.
Then again, the wealthy probably wouldn't be too pleased if they lived in France right now.