France has announced a massive redistributive tax program , which would send the top tax rate soaring and increase taxes broadly on the top 10% of society.

French Prime Minister Jean-Marc Ayrault has said that nine out of 10 citizens will not see their income taxes rise in the new budget.

He has confirmed that there is to be a new 75% tax rate for people earning more than 1m euros (£800,000; $1.3m) a year.

The 75% rate would be on income earnings, but there will also be a wealth tax on holdings above 1.31 million euros, and a cap on tax deductions, as well as a reduction on the tax burden at low incomes.

So the best way to think of this is as a redistributive tax plan. You could alternately call it left-wing austerity , and I wouldn’t agree with the austerity label totally, but for the fact that France also plans to cut spending back, and overall the budget has been called “France’s toughest single belt-tightening in 30 years.” That comes not from an analyst, but President Francois Hollande.

The question would be why. France now carries a public debt burden of around 91% of GDP. This isn’t great, but it hasn’t affected their borrowing costs at all. During the Presidential campaign, Hollande swore off austerity in favor of growth. Now he appears to be backsliding, and these kind of pullbacks in the budget don’t make a ton of sense in an environment where the country can still borrow. Hollande would no doubt respond that the Eurozone carries dangers all its own, and the bond market could turn to France and make trouble quickly.

Taking the other side, the redistributive nature of this progressive tax plan is right in line

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