As we discussed earlier, the French budget can be summed up as state spending will be frozen (not cut), tax and social contribution increases for households, and companies will see approximately 8% of their current after-tax profits vacuumed up by the government. But it is high-income earners that face a sharp adjustment. On the household side, SocGen notes the flagship measures will be: a new 75% income tax on incomes of €1 mln or more, the Wealth tax (ISF) band to return to the status quo ante (before Mr Sarkozy), the taxation of capital income in line with labor income, and new limits on tax breaks or the freezing of the income tax schedule (except for low income earners). The government expects income tax receipts to increase from €59bn in 2012 to €72.6bn in 2013 (+23%). Income taxes are expected to decline for the 8 lowest deciles (80% lowest incomes) and that the bulk of the income tax increases will affect the top 5% of incomes. A simple rule of thumb suggests that those latter households could experience a 40-50% increase in their income tax bills.