AFP: France’s 75% tax rate on rich struck down http://www.google.com/hostednews/afp/article/ALeqM5j9pOLylcARXMDbqijaDNwepJJDAQ?docId=CNG.0f3a2edaebcff4cb89d6d051bc5e3728.1d1

PARIS — France’s top constitutional body on Saturday struck down a 75-percent upper income tax rate, dealing a major blow to Socialist President Francois Hollande, who had made it his centrepiece tax measure. The government vowed to push ahead with the tax rate, which would apply to incomes over a million euros ($1.3 million) a year, and propose a new measure that would conform with the constitution. The tax rate had angered business leaders and prompted some wealthy French citizens to seek tax exile abroad, including actor Gerard Depardieu who recently took up residency in Belgium. The Constitutional Council said in its ruling that the temporary two-year tax rate, due to take effect next year, was unconstitutional because unlike other forms of income tax it applied to individuals instead of whole households. As a result, the council said, the tax rate “failed to recognise equality before public burdens”.

In my personal opinion, personal tax rates that far north of 50% do indeed stifle growth. To put it in a local perspective, in the U.S. we could TRIPLE the effective tax rate on top earners (like Romney) and STILL be short of that 50% threshhold I just noted.