World Economy

France Buries Hollande’s Super Tax

France Buries Hollande’s Super TaxFrance Buries Hollande’s Super Tax

Once a flagship policy of French President Francois Hollande, the 75-percent “super tax” on top earners limps into its final weeks this month having sparked plenty of controversy but few economic results.

It was no surprise that the policy, which expires on February 1, would be quietly dropped: it was only ever slated to last two years and the Socialist government has for months declared it would not be renewed, AFP reported Sunday.

The tax had also been watered down until it was barely a shadow of the “exceptional contribution to solidarity” proclaimed by Hollande when he came to power in 2012.

France’s top court had declared as unconstitutional the original plan to levy the tax on all individuals earning one million euros ($1.2 million).

The government came back with a version that made companies pay the 75percent rate only for the portion of employees’ salaries above the million-euro ceiling.

But by then, it had already become a symbol of France’s opposition to big business and attracted high-profile derision.

Actor Gerard Depardieu stormed out of the country in a huff over the tax and took up Russian citizenship in 2013. It was reported he only paid six-percent tax in his new home.

“I am leaving because you consider that success, creation, talent — anything different — must be punished,” he wrote at the time.

French football clubs were also horrified, saying the tax made it difficult to attract top-flight talent.

Clubs in Ligue 1 and 2 threatened to strike in late 2013 although they found it hard to rally much sympathy for the multi-millionaires at clubs like Paris Saint-Germain, where more than 10 players qualified for the tax.

  Shifting Right

The fate of the super tax mirrored the wider trajectory of the troubled Socialist presidency, which was elected in a surge of left-wing enthusiasm but has been forced to temper its initial approach in a desperate bid to escape the country’s economic quagmire.

Even by its own standards, the tax was largely a failure — the watered-down version brought in minimal revenue and did little to tackle wealth inequalities.