An earlier proposal to make the top tax rate in France 75 percent, which would apply to those earning more than $1,300,000 per year, was shot down by a judiciary council.
In a late-night television appearance, Hollande said he would take another approach to the problem.
"The Constitutional Council made a decision. I respect it. So, I'm going to take a different path," he said.
CNNMoney reported Friday that Hollande proposed a payroll tax, shifting the responsibility for payment from individuals to the companies where they work.
As France's economy remains in a slump, Hollande's popularity is waning. His first proposal stirred up emotions among those for and against the tax hike.
French actor Gerard Depardieu reacted to the proposal by becoming a Russian citizen and moving his residence to Belgium. That move stirred up emotions as well, with some angry and some sympathetic to Depardieu's decision.