French Constitutional Court Strikes Down 75% Millionaire Tax, Finds It "Unfair"

Tyler Durden's picture

In a crushing blow to socialism, wealth redistribution and purveyors of the "fairness doctrine" (as defined here first) everywhere, the French Constitutional Council ruled on Saturday that Hollande's brilliant idea to tax millionaires at a 75% tax rate - a move which has since seen numerous millionaires leave France and move to Belgium - is unconstitutional. Per Reuters, the Council ruled that the planned 75 percent tax on annual income above 1 million euros ($1.32 million) - a flagship measure of Hollande's election campaign - was unfair in the way it would be applied to different households. Which is ironic because just like in the US, so in France, the selective wealth redistribution campaign waged by the government against the "rich" (which have yet to be properly defined: those making over $250K? Over $400K? Over €1MM?) was based on the premise that it is only "fair" that the rich contribute more. Turns out fairness in the eye of the government beholder, was unfair. But the move begs the question: would the court have struck down the law had it been a merely 50% tax hike? And if the income cut off was, say, €500,000? The far bigger question is, and has been in this year of encroaching socialism, just what is the definition of "rich", what is the definition of "fair redistribution", and where do the two coincide. Finally, how soon until the US Supreme Court weighs in as well on any final Fiscal Cliff tax hike proposal which, like in France, will see the "rich" pay an abnormal share, and will that too be ruled unconstitutional?

From Reuters:

While the tax plan was largely symbolic and would only have affected a few thousand people, it has infuriated high earners in France, prompting some such as actor Gerard Depardieu to flee abroad. The message it sent also shocked entrepreneurs and foreign investors, who accuse Hollande of being anti-business.


Finance Minister Pierre Moscovici said the rejection of the 75 percent tax and other minor measures could cut up to 500 million euros in forecast tax revenues but would not hurt efforts to slash the public deficit to below a European Union ceiling of 3 percent of economic output next year.


"The rejected measures represent 300 to 500 million euros. Our deficit-cutting path will not be affected," Moscovici told BFM television. He too said the government would resubmit a proposal to raise taxes on high incomes in 2013 and 2014.


The Council, made up of nine judges and three former presidents, is concerned the tax would hit a married couple where one partner earned above a million euros but it would not affect a couple where each earned just under a million euros.


UMP member Gilles Carrez, chairman of the National Assembly's finance commission, told BFM television, however, that the Council's so-called wise men also felt the 75 percent tax was excessive and too much based on ideology.


Ideological issues aside, the Hollande tax hike was supposed to provide cover for even more French government spending - remember: under socialism the government believes it knows how to spend the money best... and most. That this tax hike rejection happened even as France was increasingly under the microscope of various entities warning that the French budget is unsustainable, will only exacerbate fears that the government will drift even more into the red.

Which then begs the question: once the SNB stops recycling the EURs it buys into French sovereign bonds, the only driver of low French yields in the past 2 quarters, how will France preserve the Ponzi-offset illusion that rampant socialism is not on the radar screens of bond vigilantees everywhere.

And will 2013 finally be the year in which the focus finally shifts from the European bailout addicts to the European enablers, who are just as insolvent but who have been using the distraction of the PIIGS quite effectively for the 3rd year running?

* * *

The good news: Obelix can finally return to Gaul.

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LoneStarHog's picture

French Toast with Hollande's sauce!

TruthInSunshine's picture

Just like in Les Misérables, so long as a man can be sent to prison for stealing a $3 loaf of bread in order to feed a hungry sister or brother, while the KronyKomrades of the Banking-Defense-WallStreet-BigPharma/Chem/edu complex can literally do no wrong (since they write the laws, while they literally tax dollars-- made available for the stealing by bought-and-paid for politicians, legislators, regulators and judges --worth trillions of loaves of bread)... long as such impossibly corrupt hypocrisy is allowed to continue, there will be no actual meritocracy or democracy, but just the illusion of such, floated on empty sloganeering and catch phrases, while the graft and concentration of power & wealth by ill-conceived measures continue...

...yet another Empire will fail.

michael_engineer's picture

I was wondering if Trav777 got in trouble again. I haven't seen any recent comments to articles and topics that he would likely comment upon.

Anybody notice him lurking in these parts or have details they can dish?

Max in St Moritz's picture



trav777 is busy flying to UAE, business class.  He made it a point to inform everyone of this a week ago.  By the way Trav, if you're reading this, if you were truly a "business class" aficionado of commercial air travel, you would have flown Qatar Airways. EK is sooo... last decade.

Old Earth Chaos's picture

When England finally gets their due for their QE, it willl be "FIGPIES"

Ghordius's picture

agree with you. nevertheless, the article is full of sentences like "...the Hollande tax hike was supposed to provide cover for even more French government spending..." and so on about the French Budget 2013

nevertheless, we are talking about something that has been called "...the harshest budget in 30 years" (link)

the reactions varied from Marine Le Pen, president of the far-right Front National, describing the budget as "absurd hyper-austerity" to Former agriculture minister Bruno Le Maire saying he was worried and disappointed, adding: "France is going to the wall"

Relevant numbers? A budget deficit target of 3% for 2017 and of 0.3% for until 2017

Socialist? The socialist French finance minister, Pierre Moscovici, said getting the public deficit down to 3% was "vital for the credibility of the country". "We are committed to it and we will meet it," he said.

Care to compare with the UK-US? Is this really a red flag for French sovereign bonds holders? (which I don't peddle anymore or even remotely reccomend)

TruthInSunshine's picture

I am LITERALLY for a 5% to 10% CONSUMPTION tax, in lieu of ALL OTHER income and any other form of taxation, for the record.

Some people claim I'm radically conservative, but I'm one of the rational people, who actually understands that the growth in and of government, and that the growth in dependence on a quite extraordinarily inefficient, wasteful and bloated government (that is Deeply Captured by special interests of the bankster/defense contractor/Wall Street/BigPharma, et al. variety) is the core of the problem of modern society, since KronyKomradeKapitalisism crowds out and otherwise destroys private sector (the true private sector, aka the non-KronyKomrade one) incentives, innovation and productivity.

My concern highlighted above speaks to the incredibly criminal double standards allowed to be perpetuated by the Corzines of this world.

zerozulu's picture

50% inheritance tax can fix a lot of problems.

max2205's picture

Over $20 mill.  Save the farmer's families

TruthInSunshine's picture

Yes, because all the taxes paid at every level (batshit crazy number of levels; property taxes, income taxes, sales taxes, gasoline taxes, utility taxes, sur-taxes, etc, etc. doo daa laa laa) aren't enough.

Once a person manages to actually save something of value, even after paying the multitudes of taxes upon layers upon taxes on it, over a lifetime - the government should come along again and tax it YET ONE MORE TIME when he/she dies, and tax it HEAVILY, as a final kick in the balls to that person.

Ghordius's picture

for the record

miswrote, here corrected "A budget deficit target of 3% for 2013 and of 0.3% for until 2017"

here we already have a consumption tax that is four times higher than your reccomendation

fact is too many different kind of taxes eat each other's effectiveness, and consumption taxes are regressive, i.e. they bite more the poorer you are

earn more than a million a year and consumption taxes don't even register, try to eke a living out of less than a median income and consumption taxes squeeze the max out of you

sorry, you know I'm a fan of yours but with a regressive tax scheme only you would take your place in the ranks of those who carry double standards, in my eyes

nope, whatever tax scheme the fact is that balancing budgets is more important than "fairness of taxation", in the long run

and the 30% tremendously unlikely "globalist scheme" worldwide tax on returns of capital that horrifies so much the Tyler/writer of this article looks more and more like something I could support

nmewn's picture

We have a VAT in the US now, its just not calld a VAT. All the way through the chain of production, the item is taxed.

From the nailmaker who makes the nails for the box maker, who sells the boxes to the orchard, for the apples to be picked and sent to the packing house to be washed, to be repackaged and sold to the grocery store, so the grocer can sell them to you.

All the way through that, taxes and fees were applied.

To be sure, the tax code has been massaged, noodled, tweaked and fiddled with to allow for writeoffs so a profit can still be made on an apple but a simpler federal tax mechanism is what TIS is saying. There's no reason for it to be this complicated unless it is being used to bestow favoritism, with the expectation that funds (allowed to the favored) will flow back to he favor giver...the politician.

I submit that it is the "progressive" income tax that is in fact regressive. The more wage income you make, the more you are penalized/taxed, is as regressive and punitive as it can get.

I know this for a fact because I've done it, when I reached a certain tax threshold, I stopped producing because to continue meant what I just did yesterday would yield less income for me today per unit...due to the tax code. Its like working for less per hour/unit. For me it was keep it under $1,400 a week back then, by October I didn't have to work for the rest of the year because I had "bankrolled" (not billed) for all that labor. I stopped being productive because of the tax code...less taxes going to government.


Ghordius's picture

+1 complicated tax code = corrupt tax code

The one exit out of this dilemma: flat tax and a small lump refund per head

It's not regrssive in any form

TruthInSunshine's picture

The regressive vs progressive tax bullshit is just a ruse to divide & conquer those who will be taxed and to claim more such taxes for government, to grow and feed the bloat.

A consumption tax is the same %, across the board, and is based on consumption, which people having much free will over the levels of consuming that they do on an individual basis (last time I checked).

Maybe basic foods & necessary medicine should be exempted (I am not saying it should be, but offering up one of many possibilities to appease those who are smitten with the "regressive tax" meme).

Also, a consumption tax eliminates the need for accountants, tax attorneys, the IRS and tens of millions of other useless & unecessary parasites upon the economy, and would allow the 60,000 page Internal Revenue Code to be used as toilet paper or kindling for the fireplace (the average business-- even small ones-- spends so much time on tax matters that it's asinine).

Ghordius's picture

+1 though I disagree. a consumption tax looks only like more "freedom" because the argument "you can choose to consume or not" does not apply to the weakest

if I make $5 per hour I won't be able to enjoy the freedom of save them much, I have to mostly consume them

it's another "sin of central planning", or a "sin tax" favouring one behaviour (saving) over another (consuming)

taxing income OR wealth are the only "least invasive" taxes yet found

even Heinlein's Land Tax (dis-)favours one form of wealth (though elegantly one part of the productive input necessary for all goods and services) over the others

alas, how to get rid of all the tax code parasites? they like their niche and fight hard for it

Ghordius's picture

further, about "The far bigger question is, and has been in this year of encroaching socialism, just what is the definition of "rich", what is the definition of "fair redistribution", and where do the two coincide."

yes, the US had a year of "encroaching socialism". and legion of US pundits propagate worldwide this "we are under a socialist attack"

with high scorn dubbed on countries like France having the gall of electing a President that openly calls himself a socialist

and yet, this "socialist" country has a constitutional court that checks on taxes targeting a minority and this socialist French government has an "austerity" fiscal agenda that only the most fiscal conservatives in the US would even contemplate

balancing the budget in the near future (not 2025)

I'd say this should give you (French) food for thought

Ghordius's picture


TruthInSunshine, "there will be no actual meritocracy or democracy"

perhaps they will continue to exist.... in France?

You know, "collectivist", "socialist", eurosystem-using France?

just poking ;-/


GCT's picture

I actually salute the French supreme court.  They handed out a decision that pissed the politicians off.  The SCOTUS would never make this decision to be honest.  Of course the politicians in France are now re-writing the law so it will pass the next time the taxation will be challenged. 

Snakeeyes's picture

Rest assured, Barzini and Tattaliga (Reid and McConnell) will do their best to perpetuate gov't spending and the debt superstore. And tax increases on the rich, whoever they may be.

zerozulu's picture

Since long I believed in capitalistic society once you are in the rich club, they would not let you go poor.

Raymond K Hessel's picture

You must believe in the tooth fairy.

ball-and-chain's picture

75 percent top tax rate sounds about right to me.

Somebody's got to pay for my food stamps. 

Perhaps I'm a socialist.

I don't think so.

But what do I know?

nmewn's picture

And somewhere in Belgium, Gerard Depardieu smiles and says...toldja

walküre's picture

"SuddenDebt" is Gerard's new bitch

DoChenRollingBearing's picture

I regret having to junk you (as I rarely junk), but I find Sudden Debt to offer many useful observations on the state of Europe and his country (Belgium).  We get rather little news out of Europe, he is in business, and I find great humor (and helpful observations) in his comments.

JungleJim's picture

Eireann .... I've seen a few French I'd like to .... Oh! sorry I thought I was in the "adults only" forum !

Waterfallsparkles's picture

I thought the Constitution called for all Taxes and levies be equally apportioned among all the People.

Have to remember there was a time when there was no Income Tax.

Plus, if you are Taxed on the Income from your lifes work, then you should be able to Depreciate yourself.  As your ability to create income is limited by the amount of years you have as a productive worker. 

CynicLaureate's picture

And you should be able to amortize your education and deduct the cost of food, housing and "maintenance".


Waterfallsparkles's picture

Absolutely,  how else could you survive to work.

Maybe that is why at one time there was no Income Tax. 

Because once you Depreciated yourself and deducted the cost for your Housing, Car, Food, Clothes, Health Care Costs and "maintenance" you would either owe no Tax or the Government would have to pay you.

Waterfallsparkles's picture

I think that there could be a Legal precident in this.  Because if someone is wrongfully killed there is a value that is placed on that persons life for a one time payout to the Family.  Just like with the 911 attacks.

The person is considered an asset based on their life income.

Think about Divorse.  In many cases the higher income spouse is considered an asset in the division of future income of the higher income spouse.

Mal Practice Law Suits places a value on the wrongfull death of a Loved One based on their income for a financial payout.  Basically saying that the Person that died was an asset to those left behind.

So, the Law is clear that a Person is considered an asset and if a Person is an asset why cannot they Depreciate themselves for taxes?


Jayda1850's picture

Ironic that the American and French revolutions had such opposite near term effects, liberty in America and tyranny in France. And yet we both ended up in relatively the same place.

Anusocracy's picture

The vast majority of the people in the world can't conceive of a world with little or no government. They're not wired to.

Many of them emigrated to America and America slowly became France.

SheepleLOVEcheddarbaybiscuits's picture

We are living in a time of mass delusion and deceit. We have establishment puppets who have the highest level of public forum to preach propaganda. The masses hear this and have become conditioned to it, the same as Pavlov's dogs. Independent thought and way of life is more or less dead, in relation to the population, and the very few who go against the establishment will end up in the best shape. Ignorance is NOT bliss here people. If you choose to ignore what is happening, you will suffer. Prime example is right here, France. This whole issue is nothing more than the usurping of wealth, to keep a ponzi scheme going, and they expect other people to keep footing the bill. Well, those people are running out of money, and the well is almost dry. They are playing a game, and their game is pretending that they are not playing a game. I say fuck their game. We see you.

The Shootist's picture

Well, the French revolution quickly devolved into hell and atrocity. Napoleon for his part brought about a sense of order, stability, and fairness. There are few people the Fr. had faith in, especially with all the Kings of Europe bearing down upon revolutionary France to subjugate and install a puppet. Napoleon gave them hope and Glory, and ended up whipping all those who were divinely seated. I'm a bit of a Bonapartiste. ;)

A Nanny Moose's picture

All governments creep gradually toward totalitarianism. We are seeing the natural outcome of force, which always results in the exact opposite of the stated intent. We used force to kick the British tyrants out. We used force to establish a "free" State.

Pseudo Anonym's picture

in a world run by hofjuden printing  fiat at will, it is not

Ironic that the American and French revolutions had such opposite near term effects, liberty in America and tyranny in France. And yet we both ended up in relatively the same place.

the common denominator is hofjuden and their confetti

Harbanger's picture

The founders of America created a unique entity that was not based on primogeniture. A classless system were opportunity existed for all people.  These conditions were so unique the World looked to us for emulation.   But we allowed the Marxists to march thru our institutions and now the orthodoxy in schools is left wing.  If the conditions our founders gave us are not appreciated, how can they be defended, we need to take back the institutions.  I find it ironic that modern commies like China and Russia have a flat tax and no inheretance or wealth tax

Anusocracy's picture

It isn't a fair redistribution unless it is voluntary.

Other people are not your property, other people's property is not your property.

Water Is Wet's picture

"other people's property is not your property."

LOL, DAFUQ!  You described every tax ever.  The Messiah and his obamaphonees have a majority and a mandate to vote that your shit is now their shit.

walküre's picture

If you don't hide it, the world knows about it. If you hide it, you truly own it.

Salon's picture

Half ounce gold rounds and coins.

Ten ounces up the ass is no problem for the average guy.

Women can carry double. Make sure you always have a good loyal woman by your side

Anusocracy's picture

Or Bawney Fwank, who does a lot of stretching exercises.

JungleJim's picture

Please stop picking on Jon Corazine, he's got a big job there bundling for the Hopie Changie One ...

SheepleLOVEcheddarbaybiscuits's picture

There is no such thing as a fair distribution. There will always be winners and losers in an economy. Trying to prevent this causes a greater and more unintended distribution.

chubbar's picture

The fact that justice Roberts completely reversed his earlier decision to rule Obama Care as unconstitutional just one month away from the announcement tells you all you need to know about our "Just us" system. The supreme court will rule the way they are told to rule.

seek's picture

Sadly true. This was the first time in a very long while I recall hearing about other justices raging about a decision.

The other issue is that the Supremes are a branch of the federal government, and it's unlikely any branch of the federal government will decide the feds have too much power. It's nice that there's checks and balances within the government, but there aren't nearly enough over the government. If we had a do-over the highest court should be managed and controlled at the state level as a judicial check on the feds, just as amendments are a legislative check on the feds.

BraveSirRobin's picture

There is a check on the Supreme court. It's called the militia, that is, the armed citizenry.

I agree, though, it might be nice to have a check of a more peaceful nature.

It might be nice if congress actually impeached a judge every now and then for malfesance. Impeachment for the Kelo dicision granting takings of private property without due process and transferance of same to private individuals and entities who promise to give more money to the government is one instance impeachment would have been called for. In my view, every justice voting in the majority in Kelo should have been impeached. Another is the ACA decision that is a twist of all logic and words.

Once Justices are removed and replaced, they may get the message and pay attention to public sentiment. When the offending law is challenged anew, perhaps then they will do the right thing.

Impeachment is akin to no-confidence votes in individual justices. It is a political act. Impeachment can be for any offense, criminal or not.

Congress should respect the judicial branch, but when the court errs egregiously, it should act. Impeachment in such cases will be no small matter. If there is enough political support to remove a justice for a decision, it will be justified. If the court cannot command enough political support to sustain itself against the representatives of the people, then perhaps it does not deserve its autonomy.