In the second supplemental reading listed for
Friday, “So much to do, so little time” the
author references François Hollande’s plan to
impose new taxes on companies and the rich, including a 75% top tax rate on
incomes above $1.3 million.
Mr. Hollande contends that the tax increases are a
“symbolic” measure, “never pretending that the rate increases would raise much
cash.” Nevertheless, in late December
France’s top court ruled that the 75% millionaire-tax is
unconstitutional because it fails to guarantee taxpayer equality.
Although the 75% tax rate has been avoided for now,
increased taxes on companies, capital gains, wealth and income have made negative impacts on many. The author argues that it is the combined influence of
these taxes that have driven celebrities to leave the country and entrepreneurs
to criticize the government for encumbering wealth creation.
http://www.economist.com/news/europe/21569068-françois-hollande-remains-intent-introducing-punishing-top-income-tax-à-bas-les-riches
3 comments:
I would agree with the author. To use Ronald Reagan's analogy, if I was going to have to pay 75 cents of every dollar I earned to the government I would either refuse to work or leave the country. I think such a high level of taxation or even the current level in France of about 50% would incentivize people not to work because they are not allowed to keep enough of the money they have earned.
While I do believe that taxing those with obscenely high incomes (over $1.3 million) more than the general public is the way we should do things, taxing at that high of a percentage is drastic. On the one hand, rich people in France should be willing to give back to the country which helped to get them where they are today. On the other, everyone has the right to earn a living, and in the market of labor, supply should go down when a person faces a lowered ceiling to what they are able to make.
Interestingly, Reagan paid about 90-95% of his income to taxes when he was a movie star in post-WWII America. Clearly, he was able to diversify his portfolio, engage in other endeavors, and secure his wealth to become President of the US 30 years later.
Workers in Europe, especially France, Spain, Italy, are given much more leisure time than we as US citizens get. I think the high tax rates ode to the fact that the French government believes it's citizens deserve a life beyond that of just career and work.
On a (rather funny) side note, Vladimir Putin offered Gérard Depardieu Russian citizenship to avoid his home-countries high tax rate. The way I see it, if your a wealthy french citizen who doesn't want to pay such high taxes (or taxes in general), move to Monaco and enjoy 0% income tax.
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