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Ministers vow to levy 75 per cent tax despite council's rejection


French ministers insisted they would pursue a plan to impose a 75 per cent tax on the super-rich despite its rejection by the country's supreme constitutional watchdog.

The tax will be reformulated by June or December. The government also insisted that the decision by the Conseil Constitutionnel, dominated by right-wing nominees and politicians, would not damage President François Hollande's plans to cut the budget deficit to 3 per cent by 2014.

The ruling by the constitutional council is a devastating political blow for Mr Hollande. The plan to levy tax at 75 per cent on all marginal income above €1m to €2m (£818,000 to £1.6m) for couples was one of the most successful planks of his presidential campaign this year.

The former centre-right Finance Minister, François Baroin, said Mr Hollande was paying the price for "pulling this tax out of his hat" during a television debate in March. At the time, it helped to shore up Mr Hollande's support amongst harder left-wing voters annoyed by his pledge to respect EU deadlines for cutting France's budget deficit.

The council said the tax breached the constitutional principle of equality before the law. A couple with two salaries would not pay the 75 per cent rate on earnings below €2m. A couple with one earner would pay 75 per cent on earnings above €1m.