France rejects super tax on rich

France's top constitutional body struck down a 75-percent upper income tax rate on Saturday, dealing a major blow to Socialist President Francois Hollande, who had made it his centerpiece 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 recognize equality before public burdens".

Though largely symbolic - it would have applied to only about 1,500 individuals - the Socialists said the tax rate was aimed at making the ultra-rich contribute more to tackling France's budget deficit.

The move was welcomed by the French Football League (LFP in French) which had expressed concern at the impact on top footballers such as Paris Saint Germain's Swedish star striker Zlatan Ibrahomovic.

LFP chairman Frederic Thiriez said if the measure had reached the statute book there could have been an "exodus of the best players" from the French league.

Prime Minister Jean-Marc Ayrault was quick to respond, saying in a statement following the decision the government would resubmit the measure to take the court's concerns into account.

AFP - AP