France’s Constitutional Council – the country's highest court – gave the go ahead on Sunday for President François Hollande’s “Millionaires' Tax”, a 75-percent levy to be paid in 2013 and 2014 by companies on their portion of wages exceeding 1 million euros ($1.38 million).
The new tax was part of Hollande’s campaign promise to make France fairer for the middle class by making the wealthy do their fair share to help France's struggling economy.
Hollande’s initial plan called for a 75-percent tax to be paid by high earners on the part of their incomes exceeding 1 million euros was struck down in December 2012 by members of the Constitutional Council, who argued that 66 percent was the legal maximum for individuals.
Hollande’s Socialist government reworked the tax to levy it on companies instead, infuriating corporate leaders.
The new plan, which the Council found constitutional Sunday, will be an exceptional 50 percent levy on the portion of wages exceeding 1 million euros paid in 2013 and 2014.
Including social contributions, its rate will effectively remain roughly 75 percent.
The Council, a court made up of judges and former French presidents, has the power to annul laws if they are deemed to violate France's constitution.