France’s Constitutional Council has approved that a government's controversial super tax to be levied on companies paying salaries more than one million euros a year.
On Sunday, France's highest court gave the green light to the 75-percent tax proposal that has been introduced by the government of President Francois Hollande.
The initial proposal for levying a high tax on high earners was ruled unconstitutional by the Constitutional Council last year. The government, however, modified it, saying the tax rate would apply to companies paying salaries over one million euros annually.
The tax, which is expected to affect about 470 companies and a dozen soccer clubs, will last two years and will be a 50 percent levy on the portion of wages above 1 million euros in the years 2013 and 2014.
The proposal caused outrage and concern among French high earners including French football clubs.
On October 24, the president of the French professional clubs union (UCPF), Jean-Pierre Louvel, said that football clubs in France's Ligue 1 and Ligue 2 are "confirming their firm opposition to the 75 percent tax proposal" on players earning more than one million euros ($1.38 million) a year and plan to hold a walk-out between November 29 and December 2.
Since Hollande took office in 2012, the French companies and households have been under economic pressures due to a steady increase in taxation.
Even though the government of President Hollande has increased taxes and implemented several reforms and spending cuts in an attempt to lower the country's huge debt load, the measures have proven unproductive since the financial crisis in the eurozone has not been resolved and the 17-member bloc is still bogged down in recession.
According to figures released by polling firm IFOP, Hollande’s approval rating sank to 20 percent in November, the lowest since IFOP started measuring presidential popularity in 1958.
IA/HN/AS
Poster Comment:
Sounds a bit sneaky, taxing company if can't tax the exec.