French President Francois Hollande
Media playback is unsupported on your device

French 75% income tax struck down by constitutional council

29 December 2012 Last updated at 16:06 GMT

France's constitutional council has overturned a proposed 75% tax on earnings over 1m euros.

The council ruled that the wealth tax was unfair despite it being approved by the French government in its most recent budget.

The tax angered France's business community and some wealthy citizens, including the actor Gerard Depardieu, who said he would emigrate in protest.

Hugh Schofield explains how incomes would be affected by the latest development.