France's Highest Court Tosses 75% Marginal Tax Rate

Looks like Monsieur Hollande experienced a bit of a setback. France's highest court tossed the 75 percent top bracket tax rate, ruling that it was unfair and "unconstitutional." Good riddance! The French economy is in very serious trouble. Cramming through politically motivated, ineffective, and ridiculously over-the-top wealth confiscation schemes, while doing nothing to pare back the metastasizing welfare state and fix the economy's fundamental problems, certainly wouldn't help matters.

Here's the story:

PARIS (AP) — Embattled French President Francois Hollande suffered a fresh setback Saturday when France's highest court threw out a plan to tax the ultrawealthy at a 75 percent rate, saying it was unfair.

In a stinging rebuke to one of Socialist Hollande's flagship campaign promises, the constitutional council ruled Saturday that the way the highly contentious tax was designed was unconstitutional. It was intended to hit incomes over €1 million ($1.32 million).

The largely symbolic measure would have only hit a tiny number of taxpayers and brought in an estimated €100 million to €300 million - an insignificant amount in the context of France's roughtly €85 billion deficit.

Prime Minister Jean-Marc Ayrault was quick to respond, saying in a statement following the decision the government would resubmit the measure to take the court's concerns into account. The court's ruling took issue not with the size of the tax, but with the way it discriminated between households depending on how incomes were distributed among its members. A household with two earners each making under €1 million would be exempt from the tax, while one with one earner making €1.2 million would have to pay.

The French government approved the tax in its most recent budget, amid criticism by some that it would do little to stem the country's mounting fiscal problems and would drive away the wealthiest citizens. Hollande's popularity, meanwhile, has been tanking as the country's unemployment continued its rise for the 19th straight month.

In recent weeks, Gerard Depardieu — France's most famous actor — announced his intention to turn in his French passport and move to a village in a tax-friendly Belgium.

http://www.nytimes.com/aponline/2012...e-rich.html?hp

I think Gerard can go home now...as a hero!

Here's the story:

. The court's ruling took issue not with the size of the tax, but with the way it discriminated between households depending on how incomes were distributed among its members. A household with two earners each making under €1 million would be exempt from the tax, while one with one earner making €1.2 million would have to pay.



http://www.nytimes.com/aponline/2012...e-rich.html?hp Originally Posted by CaptainMidnight

This was all the court was looking at.

A bit different than what the headline suggested.

This was all the court was looking at.

A bit different than what the headline suggested. Originally Posted by WTF

You're focusing on the sort of statement typically served up merely for public consumption.

If the panel's members were only concerned with the income distribution within a household, and not with the rate, they could simply have found that the Parliament should issue guidelines addressing bracket thresholds for single and dual-income households -- sort of like what we do with classifications of single, married filing separately, and married filing jointly.

But they didn't do that, did they?

In fact, all across the income distribution, the French tax code has a bracket structure that accounts for the number of people in a household. If it had wished to do so, the Constitutional Council could easily have recommended one designed to address the concerns you referenced, or directed the National Assembly and Senate to do so. Instead, it simply jettisoned the entire 75% bracket.

Also note that the National Assembly's finance commission chairman said the panel felt that the 75% rate was "excessive" and primarily based on ideology. (No kidding!)

Read more @ http://www.reuters.com/article/2012/...8NT0VC20121229

It seems to me that the court's decision offers policymakers a face-saving way to back down from an obviously bad move in one of the least politically disadvantageous ways possible.

It seems to me that the court's decision offers policymakers a face-saving way to back down from an obviously bad move in one of the least politically disadvantageous ways possible. Originally Posted by CaptainMidnight

Yes, agreed.

Hell i think it is excessive!

President Hollande used the tried, and often true, practice of using a cheap political stunt to appease France's version of what we call "those that vote for a living".

How do you say "pander" in French?

How do you say "pander" in French? Originally Posted by Jackie S

Mitt

Mitt


Originally Posted by WTF

Mitt


Originally Posted by WTF

Roger that, but you didn't mention that Barack is an equally appropriate translation! (And after all, he's the one we're stuck with.)

What a panderfest we saw last fall. Two real heavyweights from the wide world of pandering went at it with gusto. Shades of the great Ali-Frazier battles of four decades ago!

Of course, this is nothing new. We've been at it for quite a few years, but obviously we're just digging a deeper fiscal hole and the outlook is now worse than ever.

Hey, kids!

You can have all the free ice cream you want.

The fat kid down the street will eat your broccoli for you!

Hey, kids!

You can have all the free ice cream you want.

The fat kid down the street will eat your broccoli for you! Originally Posted by CaptainMidnight

See what I mean?

Just look at what's being reported on how a "fiscal cliff deal" may be shaping up in the Senate.

According to several sources, it involves permanently preserving all tax cuts for households earning less than $450K ($400K for single individuals), extending unemployment insurance for a year, and cutting or reforming nothing. (In other words, it won't do anything to reduce the deficit.)

No one is remotely serious about addressing the most critical problems; this is all about political gamesmanship. There's not a profile in courage anywhere in Washington, D.C., at least not one who has much of a voice in the direction of the proceedings. We're just building a flimsy bridge to the next crisis.

Happy New Year!

Just kicking the can down the road. Pussies, all of them.
Zero leadership in this country, just a lot of political posturing. Disgusting.

But its not midnight in Washington yet.

Update:

Turns out that even some French leftists are no longer on board with the push for a 75% top-bracket income tax rate:

http://www.businessweek.com/articles...e-tax#r=hpt-ls

When the head of something called the "Radical Left" party says he's no longer on board, I guess it's time to move on!