French President Francois Hollande suffered a setback last month when his tax plan was ruled by the high court to be unconstitutional.
The President had hoped to tax citizens with an annual income of more than one million euros by 75%. He believes this to be “fiscal justice,” and that “those who have the most, will always be asked for more.”
Many analysts guessed correctly that this issue would be one of the main topics in the President’s first New Year’s Day address. He stated that he hopes to resubmit his policy of raising income tax for those earning more than 1 million euros a year through a redesigned policy. This seems as though Hollande is setting up a watered down version of his previous plan.
Despite the Presidents claims in his New Year speech, many experts don’t believe Hollande would risk proposing such a tax again. “I suspect this tax will be shelved,” Philippe Gudin, an economist for Barclays and a former French treasury official, told Reuters news agency. “For the [low amount of]revenue it would raise, the outcry it has provoked and the damage it has done to France’s image, it would be more sensible if it were quietly buried.”
The proposed wealth tax has drawn praise from supporters but outrage from business leaders, the political right and the elite of French society, culminating a war of words with the actor Gerard Depardieu, who has publicized plans to move to lower-taxed Belgium. The number of French citizens requesting Belgian nationality doubled in 2012, to 128.
Hollande’s numbers in the popularity polls are down since he took over six months ago. The public believe he has done little to tackle unemployment, which has been growing for 19 consecutive months. His government have also made a series of amateur errors. Recent polls show that 40% felt former French President Nicolas Sarkozy was “more effective” than Mr Hollande, with only 22% feeling the reverse.