During his campaign for president, France’s Socialist President Francois Hollande famously declared “I don’t like the rich” and upon taking office hit the wealthy with a 75% tax rate — a rate that I have criticized as economically foolish and part of an increasing demonization of the wealthy around the world. Now wealthy French citizens have responded predictably by moving out of France and last week famed French actor Gerard Depardieu joined the exodus. The steady stream of departures has left the Hollande government incensed and this week Prime Minister Jean-Marc Ayrault blasted the rich. The English have also seen the same decline in wealthy taxpayers after it imposed a 50% tax. They are now going to reduce that tax after the departure of many wealthy Brits and David Cameron controversially pledged to “roll out the red carpet” for any French residents fleeing the massive tax hike. In the meantime, anger at the wealthy continues to rise in France, where “eat the rich” signs are appearing. The problems is that you cannot eat the rich if the rich flee before the meal.
Depardieu is not going to a tax haven. He is reportedly moving to Belgium which has a 50 percent taxation rate. He is moving to Nechin, a town just a kilometer inside Belgium near the French city of Lille.
Bertrand Delanoe, the Socialist mayor of Paris regretted the move because Depardieu “is a generous man but in this instance he is not showing that.”
Politicians often assume that higher taxes have no impact on market behavior for earners. However, such taxes often make no investments less attractive once the labor and time is factored into the lower rate of net profit.
While I am in the minority on this blog, I continue to be concerned over the economic impact of such confiscatory tax rates and the demonization of the wealthy. A 75% tax rate will not only encourage many French to leave the country or find ways to avoiding direct income, but it will discourage those who might become French citizens. I also fail to understand the increasing vilification of the wealthy which is defined as anyone making over $250,000 a year (as defined by the Administration’s proposed tax hike on the rich). Many of such earners are active in community work and supporting social programs. They also pay the vast majority of taxes in this country. Will they have to pay more, yes. However, the suggestion that they are all deadbeats who do not pay their fair share is unfair in my view.
In the meantime, the exodus is likely to continue and brings new meaning to the statement of Georges Danton: “At last I perceive that in revolutions the supreme power rests with the most abandoned.”
Source: France 24
rippleton:
“I am astonished, Mr. Turley, that you don’t see how the rich are undermining democratic principles. Voter suppression is just one way they do that. They also control, when necessary, the SCOTUS and state governments, thereby getting whom they want into the White House, giving corporations greater political protection than the people possess.”
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Class warfare leaves us all damaged, and generalized complaints help not at all. Irish statesmen and lawyer, Edmund Burke, reminds us of that when he said, “I do not know the method of drawing up an indictment against a whole people.”
To do so equates the Koch brothers with Bill Gates.
“To do so equates the Koch brothers with Bill Gates.”
Mespo,
I believe it was Elaine who showed on another thread that Bill Gates is the equivalent of the Koch Brothers. when it comes to charitable contributions the idea is 3,000 or so, years old:” Beware of Greeks bearing gifts”. foundations do great tax shelters make and their work is often self serving to something of great value to the donor, by which I don’t mean the public good.
Here’s a thought: as long as our stupid government is going to continue to waste billions of dollars to feed the militarist state (not to mention lives), which benefit the wealthy in numerous ways, why shouldn’t the wealthy , circuitously perhaps, be forced to cough much more of that cream back up?
And what rafflaw said about effective rates on investment income. If that isn’t enough to to drive the most pacifist among us to lock and load . . .
So many people decry the money that rich people/corporations make off of big government, then they say we need bigger government? The answer is smaller government. As long as there is billions $ to be made off government programs, people will scheme to get it. Get rid of the billion $ government programs and you don’t have people scheming after it.
Another person talked about War. How about electing a congressman that demanded a Declaration of War when our President wages War?
The problem isn’t the other guy (rich or not), it is you for electing the person you did to Congress. Elections have consequences. Who you vote for matters.
Governments are quick to jail a thief who steals from the market. But the market itself is built upon thievery.
Maybe it is less about the tax rate than about the incredible imbalance in tax loop holes etc which leave the working stiff (especially the middle class working stiff) with less opportunity to hold onto what s/he earns. And the whole off-shoring thing is nothing more than the thief who stuffs YOUR goods into YOUR pillow case and takes it out of your house to have it in HIS POSSESSION….which strangely enough is all it takes for some people to believe they have earned it….
Mike….I agree…the ones who run away are rarely worth holding on to…
We’re also hearing in France, as well as here, that the rich should be “patriotic” and pay more in taxes because their country is in peril (and similarly worded claptrap). Patriotism is indeed the last refuge of scoundrels; and used in various ways for specious purposes.
The wealthy should pay more, a lot more. My reasoning is that they profit immensely off of war which runs countries into debt. In some cases the wars are mostly waged to give Western corporations an advantage in the global economic market. Then they multiply their wealth on Wall St., giving them free money so as having no immediate need to create jobs. Then, to make more money, they use their political influence to oppress the working class by cutting wages and pensions, and providing inadequate, if any at all, healthcare. These tactics reduce the power of government to collect taxes elsewhere, while forcing the government to look after the general welfare of its people. In view of that, now the rich are undermining democracy in their home countries because, as they did to the Third World, they have even greater advantages under tyrannical leaders using militant police tactics, than they get by the people’s votes.
I am astonished, Mr. Turley, that you don’t see how the rich are undermining democratic principles. Voter suppression is just one way they do that. They also control, when necessary, the SCOTUS and state governments, thereby getting whom they want into the White House, giving corporations greater political protection than the people possess. The fact is that the rich are waging war against democracies because they see how much money the government spends and they want that money. That is why the rich seek to “privatize” every government program which will end up costing the public far more than the government now spends because profit will be the incentive rather than caring for the citizens. Without a people, a nation cannot exist. Undermine a nation’s people and you destroy the nation.
There’s a big difference between a 75% rate, and quibbling over 35, or 37..5, or 39% rate. Or even, OMG, 45%
And the $250K level is a red herring. Pols throw around figures like $250, $500. $1M like they were interchangeable concepts, .i.e., folks who can afford to pay more. And we’re talking about marginal rates of course. And no doubt the GOP will demand all loopholes remain in force if the ‘give in’ at all on rates.
Demonizing the wealthy, for some, may include the $250kers, but theose folks are simply the cannon fodder for the $250 millioners, or t he $2 billioners. Call me a socialist, or a communist if you like but no one needs to be sitting on 4, or 5 or 6 billion dollars, on the vague hope that they’ll do some social good with that pile.
Call it confiscatory (which I have addressed in comments on the “urininating” thread), the disparities are so great between the 1% and the rest that I think it threatens the fabric of our pretty fragile social compact as it is.
The biggest problem I have with shearing the ultra rich is that I have little respect for the priorities of the government that would be reaping the benefits.
But not to worry, since the ultra rich have disproportionate influence on the ultra deferential government, the ultra rich can rest easy in their featherbeds stuffed with $10,000 bills.
the French Revolution was the result of a population which worked hard and paid taxes so that a king who did not work could live a carefree lifestyle.
I see a parallel. This isnt France circa 1789 and it isnt Russia circa 1971. Both which had a monarchy and taxes paid by the people who were tired of paying taxes so a select group may live at someone else’s expense.
“the French Revolution was the result of a population which worked hard and paid taxes so that a king who did not work could live a carefree lifestyle.”
Bron,
As usual your history is selectively written. It wasn’t just the King that was being supported, but an entire class of Nobility, who lived off of the efforts of the people, while keeping the resources produced for themselves. That class today is made up of Corporations, Financial Institutions and inheritors of their forebears wealth. You, I and the rest of us are considered to be “their” peasants, though some are allowed more income than others, just to keep the pot boiling.
“and maybe we should pay close attention to what happens over there because the 98% probably isn’t so much vilifying the wealthy as they are really pissed off at the anti-worker legislations and gross, blatant thievery by some against the working class with no effective corrections in their favour. Starving overworked people may look angry but mostly they are desperate…and driven into corners by unresponsive governing bodies who continually ask for ‘austerity’ of the poor for the support of continued luxury of the wealthy is not the same as vilification….it is simple baseness and does not bode well.”
Woosty,
Sums up my own feelings beautifully. what’s missing from JT’s equation is that this is not simply a matter of “over-taxing” the wealthy, it really is about the “class warfare” begun by the “haves” against the “have-nots” To abjure response to the warfare initiated by the “haves” as being uncivil and/or self defeating, is really another way of saying “The Rich get rich and the poor get poorer…..tra la…tra la.”
The “austerity” measures put in place to “save” Europe are really a means of having the “lesser classes” bear the burdens of the excesses of the super-rich that have led to the economic disaster. Let them all leave to some of their tax-havens and maybe the rest of us will see how very un-essential these Faux Enterpreneurs are to society. Few of them are brilliant and far too many of them have basked in the glow of inherited wealth and/or socio-economic privilege throughout their charmed lives. I’m sure in their absence real entrepreneurs will spring up with more inventiveness of the creative kind, rather than the “creativeness” of figuring out money schemes akin to mob predations of legitimate businesses.
I think I finally figured out how “fair share” is defined: more. When you add up all the different tax burdens (sales, property, income, wages, social security, etc.), the resulting number, be it 40% of annual income, 50%, 60% — it doesn’t matter. What’s “fair” is simply more. It’s always easy to ask someone else to pay for government benefits. Correspondingly, spending other peoples’ money is easy — a variant on Margaret Thatcher’s comment on the perils of socialism: you eventually run out of other peoples’ money. God forbid that all citizens contribute something to our common problems. Witness the commotion over the “fiscal cliff,” which raises everyone’s taxes and which passed both Houses of Congress and was signed into law by the President just last year. It’s just easier to blame someone (“the wealthy”) for unrestrained spending and economic woes. If you’re both the cause and the only solution, it’s not hard to see why some people like Gerard get “confused” and leave the country.
Sixty-five percent of Americans say the Nov. 6 results gave Obama a “mandate” on his proposal to raise tax rates on income over $250,000 and “to get it done.” Forty-five percent of Republicans agree. Bloomberg poll
http://www.bloomberg.com/news/2012-12-12/mcdonald-s-8-25-man-and-8-75-million-ceo-shows-pay-gap.html The wage gap is more than excessive between McDonald’s CEO who is paid 8 million and a worker that is paid $8………..
maybe they aren’t leaving because the tax is increasing…maybe they see an ugly repetition of history and an even uglier writing on the wall….and maybe we should pay close attention to what happens over there because the 98% probably isn’t so much vilifying the wealthy as they are really pissed off at the anti-worker legislations and gross, blatant thievery by some against the working class with no effective corrections in their favour. Starving overworked people may look angry but mostly they are desperate…and driven into corners by unresponsive governing bodies who continually ask for ‘austerity’ of the poor for the support of continued luxury of the wealthy is not the same as vilification….it is simple baseness and does not bode well.
http://www.youtube.com/watch?v=BvSod16wfgg
[youtube http://www.youtube.com/watch?v=BvSod16wfgg&w=560&h=315%5D
http://mediamatters.org/blog/2012/05/30/while-fox-demonizes-the-poor-the-rich-skip-out/186720 People that make 250,000 certainly aren’t rich especially if they live in urban areas but they can help out and pay the extra 4 percent on income over 250,000.
JT:
“At last I perceive that in revolutions the supreme power rests with the most abandoned.”
~Georges-Jacques Danton
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While I agree (and have defended here) the proposition that you can’t raise the height of the forest by cutting all the tall trees, Danton’s words may not be the best support. Danton’s point, as understand it, is that the ones who did the abandoning bear the responsibility for their own destruction. At least then and there, history proved him correct.
“wealthy … is defined as anyone making over $250,000 a year”
I would say that is a very inaccurate definition.
The 1% is a better definition.
Professor,
I do not see this as a demonization of the wealthy. I see it as a process of leveling the playing floor. Why should he wealthy have the ability to consider their investment income at a rate that is 1/2 (approx) of the rate that I have to pay? If France wants to keep high rates, the people can vote that government out, if they don’t agree with its policies. Did we lose an inordinate amount of the wealthy population here during the Eisenhower era? Besides, we have lost their money a long time ago since they started hiding it and sheltering it in the Cayman’s and Swiss bank accounts.
When Hollande gets done he will probably be living in Holland. We call it the Netherlands. But that is neither here nor there. If you read the Economist 2013 issue, which is a separate issue with predictions for the coming year, the Frogs come out looking like they might croak. No pun intended. I think it was John Maynard Keynes who talked about the “convergence” between communist countries and capitalist countries. The communist countries per se, except perhaps Korea, have converged so much that they have folded. Some of the capitalist contries are converging in the left direction so much that they will fold soon. Spain, Italy and Greece seem to be going off the Fiscal Cliff if not the Physical Cliff. Jimmy Cliff predicted that You Can Get It If You Really Want. Keynes brother, Maynard G. Krebs predicted that the French would soon be out of Algeria. That was about the time that they left. Unfortuneately many of the Algerians left for France and live there with the wealthy. Maybe the exiting Frogs will migrate to the Caymans. America received a huge influx of Europeans following the failed Social Revolution of 1848. The next generation of those folks formed the labor unions here. I would relate more history but my dog biscuits just arrived.
Well said.