President François Hollande’s socialist government was facing mounting questions on Thursday night over whether it was preparing to back down on its controversial 75 percent marginal tax rate for the rich.
Responding to reports that the rate would be reduced to 67 percent, that all non-salary income would be exempt and couples would only be exposed on joint income above €2m, officials said no decisions had yet been made on how the tax would be levied.
The officials admitted that “lots of scenarios” were under discussion in the Elysée palace and the finance ministry on exactly how the tax would be introduced when it is put into force at the beginning of next year. A decision is due in time for the 2013 budget in two weeks’ time.
But the government is determined to find a face-saving way of formally retaining the 75 percent headline figure. “The 75 percent rate will be applied,” said one official.
Mr. Hollande’s promise to impose the rate on incomes above 1 million euros ($1.26 million) a year was one of the most popular moves of his campaign, helping him to defeat Nicolas Sarkozy, his center-right predecessor, in the May election.Page 1 of 2 | Next Page