When France's Francois Hollande was elected President this year, his biggest mission was going to be reducing the country's massive deficit. His solution was an impressive 75 percent tax on earnings over 1 million euros (roughly $1.3 million). Unfortunately, that dream is dead... for now.
The Constitutional Council in France ruled that the tax measure was unconstitutional Saturday morning because it didn't accurately tax all households earning over 1 million euros. This is unfair, the courts ruled, and now Hollande's people are going back to the drawing board. They plan to reintroduce the tax next year. But that doesn't mean the millionaires who left France in a huff, like actor and icon Gérard Depardieu, are going to come rushing back.
The way the law was set up, it only targeted an individual making more than 1 million euros. If, say, two parents living together individually earned 750,000 euros per year -- putting them at a cumulative 1.5 million euros annually -- then they would be exempt from the taxation. So now Hollande's people are taking the court's notes into consideration and preparing a new version of the law. It doesn't take a wizard to figure out what's going to happen here. They're going to change the law so it will include, in some form, a taxation on combined household earnings over 1 million euros. The dream is gone but not forgotten, as they say. It will be back, and it will be... taxier.