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This decision doesn't change much... or at least not for long. The reason the French Constitutional Court rejected the plan as unconstitutional was not because the rate was "too high" - it was because some other provisions in the law made it possible for two families having the exact same income to pay significantly different overall tax rates, depending on the distribution of "household income" vs "individual income" - this violates the rule of "equal tax treatment"... which is kind of ironic, n'est-ce pas?

For example, a household with one income earner of €1.5M or with two individual income earners of €1.2M and €300,000 will pay much more in taxes than a family of two individual income earners of €900,000 and €600,000.

Hollande and French PM Jean-Marc Ayrault already stated that they will fix additional provisions of the law not to violate the "equality" rule in the next revision of the law, so the top marginal rate of 75% will be in place soon enough unless the French tire of losing their rich and famous to Belgium and other places. Ruling doesn't call into question the revenue or deficit targets or the constitutionality of higher rates.

Currently, the top tax rates stand at 57% for income. The Court also lowered the tax on stocks and options from planned 77% to 64.5%, and on the "retraites chapeau" (private retirement benefit income) from planned 78% to 68%.

In addition, the Court nixed the plan to assess the tax on unrealized (!) capital gains - due to requirements of taking into account the ability to pay the tax!

What's interesting is that French Socialists are doing this fully realizing that the tax would not bring desired revenue to combat deficit - they estimate the additional annual collection of just €500M, a negligible amount relative to the deficits.

What is even more interesting is that France is running a deficit of about 4.5% while she is required by ECU to have deficits of no more than 3%.

The U.S. in the last few years has been running the deficits of 7% or more, and is projected to do not much better, absent substantial cuts in federal spending which currently takes up to 25% of GDP.