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Can someone explain how the French "rich tax" works? If I had salary of 1.000.000€ per annum, would I pay 750.000€ tax? And thus I would realize only 250.000€ net income?

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A tax like this means that you pay 75% on the amount of your income over 1 million Euros. This page gives the current rates. So:

Income Share Tax Rate

Up to €6,011 0%

Between €6,012 - €11,991 5.5%

Between €11,992 - €26,631 14%

Between €26,632 - €71,397 30%

Between €71,398 - €151,200 41%

Above €151,200 45%

So if you are earning €1000001, you would pay the same tax as someone earning €1000000, plus an extra 75c.

All income taxes work this way.

  • When I earn 1Mio and 1€ I pay only 75Cent tax? – Gigamegs Jan 15 '14 at 14:08
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    @DJClayworth Actually, the specific tax the OP asks about doesn't work that way. From the Wikipedia page you linked to, this: "High earners income tax: For tax years 2013 & 2014 earnings above 1 million euros will be subject to a tax payable by the payer/employer. The tax introduced by Francois Hollande as the 75% tax is in fact a 50% tax which when social security charges are added reaches 75%." In other words, I think the employee may receive more than 25% of the amount in excess of 1,000,000, and from the employer's perspective the gross amount may exceed 1,000,000, taxes considered. – Chris W. Rea Jan 15 '14 at 15:37
  • I confess I wasn't aware of the details, so I answered on the general principles of graduated taxation. – DJClayworth Jan 15 '14 at 15:58
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    Edit. Nudge, nudge :-) – Chris W. Rea Jan 15 '14 at 18:05
  • Sorry, I don't have time to do the research to make a good answer of this. Feel free to write an answer and I will vote it up. – DJClayworth Jan 15 '14 at 18:10
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What does it mean is that, for 1 000 000 € of revenue, you ll pay:

First slice (0%): 0€

Second slice (5.5%): 328.85€

Third slice (14%): 2,049.46€

Fourth slice (30%): 13,429.50€

Fifth slice (41%): 32,718.82€

Sixth slice (45%): 381,960€

Total: 430,486.63€

But at 1M€ we don t enter the last slice, 75%, let s say we get 1.5M€ instead, the first six slice doesn t change.

Last slice (75%): 375,000€

For a total of 805,486.63€, wich make ~53% of the revenue, far from 75% : )

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