France Sets 75% ‘Super Tax’ Rate

France taxes rich and business to slash deficit

(Reuters) - President Francois Hollande’s Socialist government unveiled sharp tax hikes on business and the rich on Friday in a 2013 budget aimed at showing France has the fiscal rigor to remain at the core of the euro zone.

The package will recoup 30 billion euros ($39 billion) for the public purse with a goal of narrowing the deficit to 3.0 percent of national output next year from 4.5 percent this year - France’s toughest single belt-tightening in 30 years.

But with record unemployment and a barrage of data pointing to economic stagnation, there are fears the deficit target will slip as France falls short of the modest 0.8 percent economic growth rate on which it is banking for next year.

The budget disappointed pro-reform lobbyists by merely freezing France’s high public spending rather than daring to attack ministerial budgets as Spain did this week as it battles to avoid the conditions of an international bailout.

“This is a fighting budget to get the country back on the rails,” Prime Minister Jean-Marc Ayrault said, adding that the 0.8 percent growth target was “realistic and ambitious”. “It is a budget which aims to bring back confidence and to break this spiral of debt that gets bigger and bigger.”

100 Days Until Taxmageddon

Sunday will mark the start of the 100-day countdown to “Taxmageddon” – 
the date the largest tax hikes in the history of America will take effect. They will hit families and small businesses in three great waves on January 1, 2013:

First Wave: Expiration of 2001 and 2003 Tax Relief

In 2001 and 2003, the GOP Congress enacted several tax cuts for small business owners, families, and investors (later re-upped by President Obama and Democrat Congress in 2010).  The following tax hikes will occur on January 1, 2013:

Personal income tax rates will rise on January 1, 2013.
  
The top income tax rate will rise from 35 to 39.6 percent (this is also the rate at which the majority of small business profits are taxed). The lowest rate will rise from 10 to 15 percent.  All the rates in between will also rise.  Itemized deductions and personal exemptions will again phase out, which has the same mathematical effect as higher marginal tax rates. The full list of marginal rate hikes is below:

-The 10% bracket rises to a new and expanded 15%
-The 25% bracket rises to 28%
-The 28% bracket rises to 31%
-The 33% bracket rises to 36%
-The 35% bracket rises to 39.6%