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| France's 75% 'supertax' could be revived in Hollande's new year message | France's 75% 'supertax' could be revived in Hollande's new year message |
| (about 4 hours later) | |
| François Hollande is expected to use his televised new year message to vow that his flagship 75% "supertax" on the mega-rich will go ahead despite being rejected by France's highest constitutional court. | François Hollande is expected to use his televised new year message to vow that his flagship 75% "supertax" on the mega-rich will go ahead despite being rejected by France's highest constitutional court. |
| Preparations for the Socialist French president's first new year address, at 8pm French time [7pm GMT] on Monday, have been tense as France faces a grim year of deepening economic gloom in 2013. | Preparations for the Socialist French president's first new year address, at 8pm French time [7pm GMT] on Monday, have been tense as France faces a grim year of deepening economic gloom in 2013. |
| Hollande's unpopularity in the polls is at record levels, unemployment is soaring and his totemic measure – intended to make the mega-rich bow to the crisis-hit times by taxing income over €1m at 75% – was thrown out as unconstitutional by France's top court on Saturday. | Hollande's unpopularity in the polls is at record levels, unemployment is soaring and his totemic measure – intended to make the mega-rich bow to the crisis-hit times by taxing income over €1m at 75% – was thrown out as unconstitutional by France's top court on Saturday. |
| The traditional (and pre-recorded) new year address, in which the president sits behind a desk and talks straight to camera amid the finery of the Élysée Palace, has become a set piece of French politics, intensely scrutinised for its ability to set the nation's mind at ease over the difficulties of the coming year. | |
| Hollande's already difficult task of preparing France for what commentators predict will be an annus horribilis has been complicated by the ruling on the 75% tax, which came as a personal blow and saw the government attacked for amateurism by political opponents on Hollande's right and left. | |
| The tax was rejected on the basis of a technical point, leaving France surprised that the government could have overlooked the finer details. | |
| The government has promised that the 75% tax will still eventually be introduced, and Hollande's entourage said he was "serene". But the measure has suffered a setback of at least a year, if not a mortal blow. | |
| The Socialists have not revealed any detail about how they will revise the tax and are not expected to propose a new, tweaked measure until the autumn of 2013 at the earliest. This has prompted opponents to claim victory, including the head of the French professional football league, Frédéric Thiriez, who called the tax a "grave threat" to the football league's competitiveness. | |
| The calmness with which the government has publicly greeted the decision, and its lack of haste to force through a revised measure, has underlined how the 75% tax, which would have brought in only €200m out of the €20bn of new taxes next year, was more symbolic than effective in bringing in revenue. | The calmness with which the government has publicly greeted the decision, and its lack of haste to force through a revised measure, has underlined how the 75% tax, which would have brought in only €200m out of the €20bn of new taxes next year, was more symbolic than effective in bringing in revenue. |
| The tax, as conceived by Hollande, was aimed at all individuals earning more than €1m a year – only income above that benchmark would be taxed at 75%. Hollande, who surprised his own unsuspecting campaign team when he suddenly announced the measure live on a TV show early in the election campaign, had called it a question of morality and patriotism for the rich. | The tax, as conceived by Hollande, was aimed at all individuals earning more than €1m a year – only income above that benchmark would be taxed at 75%. Hollande, who surprised his own unsuspecting campaign team when he suddenly announced the measure live on a TV show early in the election campaign, had called it a question of morality and patriotism for the rich. |
| As a campaign promise, it was designed to embarrass the right, who were seen as defenders of the rich, and appeal to the left at a time when the hard-leftist Jean-Luc Mélenchon was rising in the polls. | As a campaign promise, it was designed to embarrass the right, who were seen as defenders of the rich, and appeal to the left at a time when the hard-leftist Jean-Luc Mélenchon was rising in the polls. |
| It remains a hugely popular measure in France, with over 60% of people approving it. Crucially, it had become a deeply symbolic political marker to show Hollande was anchored on the left, while those on the left of his own party and leftists in other parties accused him of selling out with recent tax measures in favour of business leaders to boost France's competitive edge. | It remains a hugely popular measure in France, with over 60% of people approving it. Crucially, it had become a deeply symbolic political marker to show Hollande was anchored on the left, while those on the left of his own party and leftists in other parties accused him of selling out with recent tax measures in favour of business leaders to boost France's competitive edge. |
| France's constitutional council ruled that the 75% "supertax" was unfair because it flouted the law in France that taxes are decided by household, not by individual. For example, if someone earned €1.2m and their spouse earned nothing, they would face the 75% tax on €200,000. But a couple that earned €900,000 each, €1.8m between them, would not be taxed at that rate. | |
| Another even thornier issue to dominate the short new year's message will be what Hollande has called his "great battle for employment". He has promised to stem France's relentless rise in unemployment and ensure the number of jobless people starts to drop by the end of 2013. This now looks unlikely after France saw its 19th month of rising unemployment. Early 2013 could see France breaking its own 1997 record of 3.2 million unemployed. | Another even thornier issue to dominate the short new year's message will be what Hollande has called his "great battle for employment". He has promised to stem France's relentless rise in unemployment and ensure the number of jobless people starts to drop by the end of 2013. This now looks unlikely after France saw its 19th month of rising unemployment. Early 2013 could see France breaking its own 1997 record of 3.2 million unemployed. |
| Another tough challenge will be France's promise – with Brussels breathing down its neck – to reduce its deficit to 3% of gross domestic product by the end of 2013. With growth predictions down, this looks increasingly difficult. | Another tough challenge will be France's promise – with Brussels breathing down its neck – to reduce its deficit to 3% of gross domestic product by the end of 2013. With growth predictions down, this looks increasingly difficult. |
| The Élysée said the message of the new year's address would be "hope". | The Élysée said the message of the new year's address would be "hope". |