French 75% 'millionaire's tax' gets constitutional go-ahead | Reuters

The French President Francois Hollande has won against the constitutional council's challenge to the 75% tax on individuals. The tax will be levied against individuals (not families) that make over 1 million Euros. It is currently being applied to businesses.

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According to Reuters:

Under its new design, which the Council found constitutional, the tax will be an exceptional 50 percent levy on the portion of wages exceeding 1 million euros paid in 2013 and 2014.

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Including social contributions, its rate will effectively remain roughly 75 percent. The tax will, however, be capped at 5 percent of the company’s turnover.

The Socialist Party’s campaign to raise taxes was announced during the presidential elections after the Front de gauche candidate Jean-Luc Mélenchon announced he would bring in a 100% tax on earnings over €360,000. At the time, Front de gauche support was eating into the support for Hollande and forced more agressive and left from the Socialist Party policy.

Since then, the policy has been watered down and challenged at every step resulting in an embarrassment for the President. However, this latest victory for Hollande looks to be the final hurdle before implementing the tax.

The questions remains if the tax windfall will be spent on stabilizing the welfare system in France, or be given back to businesses through state supports.