France has quietly scrapped its supertax on millionaires after triggering virulent protests from business leaders and government studies showed that it netted meager revenues, the Guardian reported.
President François Hollande introduced the 75 percent tax on earnings above 1 million euros (US$1.2 million) after his election in 2012 as a means of forcing the richest to help pull the country out of its economic crisis.
Although supported by the left, the tax reform fueled accusations that the Hollande government was anti-business and threatened to spark an exodus of high-profile personalities.
Bernard Arnault, chief executive of luxury retailer LVMH and the country’s richest man, took a Belgian nationality, and the actor Gérard Depardieu obtained Russian citizenship.
High-earning French football stars threatened to boycott matches, while league bosses warned they would no longer be able to attract world-class players.
A majority of French taxpayers disapproved of the 75 percent rate, although polls showed that six out of 10 voters were in favor of raising income taxes on the wealthy, according to the newspaper.
After suffering a rejection from the country’s highest court, the government tried to salvage the supertax by adjusting it adjusted it to a 50 percent rate payable by companies.
The tax generated 260 million euros in 2013 and 160 million in 2014, and affected 1,000 staff in 470 companies. Over the same period, the budget deficit soared to 84.7 billion, the report said.
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