French Court Approves 75% Company Tax On Salaries Over $1.3 Million

France's top court on Sunday approved a proposal for companies to pay 75 percent tax on annual salaries exceeding one million euros in line with President Francois Hollande's drive to limit executive pay at a time of economic hardship.

The Constitutional Council had earlier in the year thrown out one of Hollande's key campaign pledges to impose a 75 percent tax on individuals earning more than one million euros ($1.35 million).

The rejection of that proposal exempted those who had a significant inheritance but low incomes from coming under the 75 percent tax bracket.

After that setback, Hollande in March mooted a proposal to make companies pay for top earners.

He had said the idea was "not to punish" but added that he hoped it would spur companies to lower executive pay at a time when the economy is suffering, unemployment is soaring and workers are being asked to accept wage cuts.

Hollande has pledged to rein in spiralling unemployment by the end of 2013.

The government's belt-tightening budget for 2014 aims to bring down the public deficit from the current level of 4.1 percent to 3.6 percent of gross domestic product (GDP) through spending cuts totalling 15 billion euros ($20 billion) and new taxes.

The surtax on companies posting a turnover of more than 250 million euros has been doubled, a measure that is expected to bring in 2.5 billion euros a year.