PARIS, Dec. 29 -- French Constitutional Council on Sunday approved the controversial tax on earnings over 1 million euros (1.375 million U.S. dollars) which aimed at helping to reduce the budget gap.
After rejecting the governing Socialists' proposal in December 2012, the Sages' green light likely to be a good music to the president Francois Hollande who played a hard ball to make the country's rich contributing more to reach healthy finances.
"The firms which pay salaries of more than 1 million euros a year are called to show more solidarity in 2013 and 2014," the council said.
In a joint statement, ministers of Economy and Budget, Pierre Moscovici and Bernard Cazeneuve, welcomed the decision of the Constitutional Council that "validates almost all the provisions of the Finance Act 2014 and the Finance Act amendment in 2013."
In a bid to make France's top earners energizing efforts to help the debt-laden country out of financial troubles, the government put up the measure to impose as high as 75 percent of income tax rate on the rich.
A campaign promise of Hollande, the fresh tax income on wealthy citizens was cheered by Left-wing voters that urged the Socilaist occupant of the Elysee Palace to deliver on his presidential vision based on more revenue and fair welfare.
However, business leaders and rich artists saw the other face of the coin arguing that the new levy will incite talent to flee the country.
As a result, the famous French actor Gerard Depardieu seeked tax exile in Belgium and soccer clubs threathened to stage a strike.
Under pressure to respect its financial and economic pledges, the government expected with the new fiscal device to provide additional receipts up to 500 million euros.
Looking to 2014, it vowed to accelerate growth by 0.9 percent and projected a lower budget deficit of 3.6 percent of the country's national output thanks to spending cut.
Weighed down by high unemployment and flagging competitiveness, France's 2-trillion euros economy is unlikely to reach the optimistic targets, and that could force the government, already under fire, to squeeze further public spending in a context of public discontent, according to analysts. (1 euro = 1.375 U.S. dollar)