François Hollande’s unpopular tax changes that imposed a 75% rate on earnings above €1m (£780,000) will quietly disappear into the history books from.
The French socialist president announced plans for the controversial measure during his 2012 election campaign as a means of forcing the wealthiest to help dig the country out of economic crisis.
Although supported by the left, the reform sparked accusations of an anti-business agenda. After the “supertax” was announced in September 2012 the government was accused of shooting itself in the foot by risking an exodus of high-profile personalities. Business leaders expressed fears that investors would pull out of France.
France’s richest man, Bernard Arnault, the chief executive of luxury group LVMH, took out Belgian nationality, and the actor Gérard Depardieu also moved across the border to Belgium before obtaining Russian citizenship.
High-earning French footballers threatened strike action, while league bosses warned they would no longer be able to attract world class players.
A majority of French taxpayers disapproved of the 75% rate, although polls showed that six out of 10 voters were in favour of raising income taxes on the wealthy.
Despite the backlash Hollande clung to the principle of the supertax even after it was dismissed by the country’s highest court, fearing a revolt by his leftwing allies. The tax was subsequently adjusted to a 50% rate payable by companies after the constitutional council ruling in December 2012.
The final nail in the coffin came from the former investment banker who is now France’s economy minister, Emmanuel Macron. A former economic adviser to Hollande, Macron described the supertax as “Cuba without the sun”.
