France's top administrative court has determined that the government's plans for a super tax on millionaires should not top two-thirds of earnings, Le Figaro newspaper reported on Wednesday.
In December, the Constitutional Council struck down a plan by President Francois Hollande to impose an exceptional tax rate of 75 percent on personal earnings of more than 1 million euros (856,890 pounds) per year, ruling the levy was unfair.
Hollande's government pledged to propose an alternative tax, but eager to avoid another embarrassing rejection sought the guidance of the court for a rate that would be more acceptable.
The court's financial division has concluded that a marginal tax rate higher than 66.66 percent on a household would risk being rejected as confiscatory by the Constitutional Council, Le Figaro reported.
Even though the 75-percent tax was never expected to be a big earner for the state, its rejection dealt a painful political blow to Hollande.
He had cast the flagship measure as vital to making the rich bear a bigger burden for shoring up the strained public finances, while critics claimed that it would only frighten away France's most talented tax-payers and investment.