France drops its super tax on millionaires

France has abolished the controversial supertax. Key French media including Le Figaro has reported that the tax, which levies 75% tax of income that exceed 1 million euros each year, has been dropped on January 1. The tax, which was one of the key pledges by French president François Hollande during his campaign in order to relieve the income gap, will disappear into history books less than two years since its introduction. It attracted criticism that did not help recover the economy and only stirred social disputes.

There were results of a March 2013 survey, the year following Hollande’s taking office, which found six out of 10 taxpayers supported it. However, when the news got out that this policy would be implemented, high income earners in France left the country.

Tax income from this supertax was some 260 million euros in 2013 and 160 million euros in 2014. This falls far short of the some 84.7 billion euros of fiscal deficit as of October and criticism mounted. There were complaints that the tax only discouraged companies to do business and accordingly the economy did not improve.

Meanwhile, supertax supporter Thomas Piketty, author of “Capital in the 21st Century” and professor at the École des hautes études en sciences sociales and professor at the Paris School of Economics, on January 1 refused to accept the highest honor bestowed by the French government, the Legion D`Honneur. He told AFP: “I do not think it is the government`s role to decide who is honorable. … They would do better to concentrate on reviving [economic] growth in France and Europe."