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France’s 75% ‘Rich Tax’ Ruled Unconstitutional

From Time Magazine:

France’s 75% Income Tax on the Rich Overturned as Unconstitutional

By Bruce Crumley | Dec. 30, 2012

Long-standing French clichés took a blow Dec. 29 from an unexpected decision by France’s constitutional watchdog. Not only did the Conseil Constitutionnel strike down the kind of new tax hikes that have made France infamous abroad. In doing so, the Conseil prohibited a pending 75% income-tax rise on France’s wealthiest people — another French fiscal move that has generated much negative attention around the world.

This is from last week, but it has gotten almost no coverage from the rest of our mainstream media, even though the comparisons to our own situation are obvious.

More uncharacteristic still, while the 75% boost was designed to finally make France’s underpaying wealthy class start contributing its full share to public finances, the Conseil rejected the measure in defense of French revolutionary ideals of égalité before the law.

"Fair share"? That sounds vaguely familiar.

As a result, Socialist President François Hollande must now scramble to revise his soak-the-rich legislation — a largely symbolic initiative whose constitutional rejection represents a significant political embarrassment.

The Conseil invalidated the 75% tax hike on people whose income exceed $1.28 million per year on the grounds it failed to respect constitutional promises of “equality before public burdens.”

Huh. It’s too bad our country doesn’t have something like that which would ensure equal protection under the law. Instead, we have ‘social justice.’

It also struck down several other elements in the same budget law it was part of, including creation of tougher rules and calculations on how accumulated wealth, capital gains and some stock options are taxed.

Don’t you wish our Supreme Court were as courageous?

Opposition conservatives who filed the successful objection to the Conseil on Dec. 20 — the same day the law was passed — rejoiced at Saturday’s decision.

“The decisions of the Conseil Constitutionnel rebuke the fiscal harassment and demagoguery of François Hollande,” tweeted former conservative Prime Minister François Fillon.

“François Hollande played the French people for fools when he told them he’d straighten France out by increasing taxes on our wealthiest citizens,” echoed conservative legislator Christian Jacob, leader of the formerly ruling Union for a Popular Movement party’s parliamentary caucus…

Don’t you wish our ‘conservative’ politicians would speak this bluntly?

Yet that doesn’t deal a huge blow to the French budget — or doesn’t mean Hollande’s plans to pinch the rich are dead yet. The decision mainly faults wording of the law focusing on individual income, rather than tax households, as is usual. That detail appears to set an unconstitutionally discriminatory income marker for people who are supposed to be equal before the law, the Conseil suggested…

For that reason, ruling Socialists — led by Prime Minister Jean-Marc Ayrault — responded to Saturday’s news by pledging they’ll take the Conseil’s objections into account when they simply repass reworded legislation back into law.

So Time and the French socialists are not giving up hope yet.

Meantime, the setback won’t seriously worsen France’s growth-sapped, debt-swamped public finances. Only around 15,000 to 25,000 people in France are estimated to earn enough to qualify for the 75% tax bracket — and many of them had already found legal accounting ruses to bring their reported income under $1.28 million. Even Hollande has never hidden the fact that pinching the affluent was far more significant as a gesture than it could ever be as a revenue generator…

Gee, that sounds strangely familiar, too. Just like in France, our tax hikes are not about fixing the deficit. They are about punishing the achievers.

This article was posted by Steve on Friday, January 4th, 2013. Comments are currently closed.

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