I have been a critic of the tax policies of French President Francois Hollande, including his disastrous 75% tax on the rich. The tax, as expected, has resulted in an exodus from the country of many top earners and a reluctance of others to move to France. However, with his poll numbers at a historic low, Hollande is continuing his “eat the rich” campaign. Last week, he announced a desire to impose a 75% tax on companies for salaries above 1 million euros. It is yet another blow to the French economy and will further deter new business for the struggling nation.
Hollande announced that when companies pay the large salaries to top executives “the company will have a contribution to pay that will reach 75%. During these difficult times, can’t those that are at the top make an effort for 2 years? The company will thus become responsible”.
I know how unpopular such salaries are, particularly at a time of economic hardship. However, the salaries are part of a global market for top executives. Imposing such a tax once again makes France a hostile environmental for such businesses, which are badly needed to boost a failing economy. This is imposed on top of other deterrents to new business such as mandatory labor rules making it difficult to fire French workers, guaranteed long vacations, and an array of other taxes. Investors have complained that they do not want to take over failing French businesses due to this environment, including the recent flap over comments by an American businessman.
I happen to think corporate salaries are too high, but I do not believe that government should regulate this part of the market. Moreover, the tax has no connection to social costs or public benefits. It is merely a punitive measure targeting the wealthy.
Politicians always garner support for socking it to the rich through taxes. However, it is an extremely shortsighted strategy. In the U.S., we have seen clear moves out of high tax areas like New York and California. The result is a reduction in tax bases. The fact is that tope earners pay the vast majority of taxes so the loss of such earners has a significant impact on tax revenue. These jurisdictions make themselves economic islands of high tax zones as more and more business is pulled into areas with average or lower tax rates. France is the most extreme example. The earlier 75 percent tax rate is viewed widely as a colossal failure for precisely the reasons raised earlier. Yet, Hollande is still offering up the rich as a popular target even though such taxes will generate little significant revenue. What it will do, however, is magnify the image of France as entirely hostile to high earners and new businesses.
82 thoughts on “Hollande Moves To Impose Another 75 Percent Tax For High Earners”
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Tax Haven Use Costing Americans $150 Billion Per Year: Study
Great Article Elaine!
If these corporations gave a combined $6 billion a year (much less than what they are supposed to), then the US wouldn’t have a homeless problem (shelters would be upgraded to the point that people wouldn’t want to live on the streets, and/or section 42 wouldn’t be a dream, but a reality). But I believe that our government could turn up the heat on these corporations if they were serious about addressing the homelessness in America.
Elaine H.: That’s some amazing and scary stuff. The rich all over the world are engaged in a sequestration-of-wealth project that is staggering in scope. Thnx for posting this. I will cut and paste into Pages so I can do some research on it. It is an issue that I take to be of crucial importance as the Class War continues to develop.
Hollande needs to take one more step in hiis tax plan: Pass a new residency law that requires rich French expatriates to pay taxes on all their income if they maintain any kind of “second residence” in France; a Paris townhouse, a chateau in Provence, a villa on the Riviera.
Secret Files Expose Offshore’s Global Impact
Center for Public Integrity
Posted: 04/03/2013 6:01 pm EDT
Updated: 04/04/2013 1:28 am EDT
Dozens of journalists sifted through millions of leaked records and thousands of names to produce ICIJ’s investigation into offshore secrecy
By Gerard Ryle, Marina Walker Guevara, Michael Hudson, Nicky Hager, Duncan Campbell and Stefan Candea, International Consortium of Investigative Journalists
A cache of 2.5 million files has cracked open the secrets of more than 120,000 offshore companies and trusts, exposing hidden dealings of politicians, con men and the mega-rich the world over.
The secret records obtained by the International Consortium of Investigative Journalists lay bare the names behind covert companies and private trusts in the British Virgin Islands, the Cook Islands and other offshore hideaways.
They include American doctors and dentists and middle-class Greek villagers as well as families and associates of long-time despots, Wall Street swindlers, Eastern European and Indonesian billionaires, Russian corporate executives, international arms dealers and a sham-director-fronted company that the European Union has labeled as a cog in Iran’s nuclear-development program.
The leaked files provide facts and figures — cash transfers, incorporation dates, links between companies and individuals — that illustrate how offshore financial secrecy has spread aggressively around the globe, allowing the wealthy and the well-connected to dodge taxes and fueling corruption and economic woes in rich and poor nations alike. The records detail the offshore holdings of people and companies in more than 170 countries and territories.
The hoard of documents represents the biggest stockpile of inside information about the offshore system ever obtained by a media organization. The total size of the files, measured in gigabytes, is more than 160 times larger than the leak of U.S. State Department documents by Wikileaks in 2010.
To analyze the documents, ICIJ collaborated with reporters from The Guardian and the BBC in the U.K., Le Monde in France, Süddeutsche Zeitung and Norddeutscher Rundfunk in Germany, The Washington Post, the Canadian Broadcasting Corporation (CBC) and 31 other media partners around the world.
Eighty-six journalists from 46 countries used high-tech data crunching and shoe-leather reporting to sift through emails, account ledgers and other files covering nearly 30 years.
“I’ve never seen anything like this. This secret world has finally been revealed,” said Arthur Cockfield, a law professor and tax expert at Queen’s University in Canada, who reviewed some of the documents during an interview with the CBC. He said the documents remind him of the scene in the movie classic The Wizard of Oz in which “they pull back the curtain and you see the wizard operating this secret machine.”
Happy to be one of several visitants with this awing web site: G.
“Spoken like a true socialist!”
I am wounded!
Next, you’ll be calling me a bleeding-heart liberal, because— the only insult worse than being accused of caring is to be accused of really caring.
I’m kinda interested in why Marx, a communist who viewed socialism as an intermediate step between capitalism and communism, would be proud of something that isn’t communism. Socialist forms can be an end in themselves and in the end, some form of socialism is the likely answer as communism proved totally unworkable in reality and just as lassiez-faire capitalism is currently proving itself unworkable in any reality. Especially to societies that recognizes democracy, equity and justice as positive values.
Could you kindly explain what a “socialist” is as you interpret the term? I may have a different understanding than you.
Great clip OS! I think I remember the Col. Parker interview.
My late father-in-law was in the CCC. That work helped him save both his property and his dignity.
I remember seeing an interview with “Col.” Tom Parker, Elvis Presley’s manager. Parker told the reporter that it was his job to keep Elvis in the 90% tax bracket. As I recall, Elvis did alright for himself in that tax bracket, and I don’t recall him ever complaining about taxes.
Let’s not forget that we used to have a top-rate of 90% (under a Republican president, no less) and the country was more prosperous— or, at least, more equal economically— than it is today.
Only complaint I have with Hollande’s policies is that they are not universal— so greedy fatcats would have no place to run to.
William Berry sed:
“Only complaint I have with Hollande’s policies is that they are not universal— so greedy fatcats would have no place to run to.”
Spoken like a true socialist! Marx would be proud.
My maternal grandfather was a WPA worker. He was not a slacker. He worked hard and was able to maintain his dignity,…and hold on to his home.
Correct, same as there are some Republicans who believe in higher taxes on those who can afford it in order to help get the country moving forward again. I posted a little video clip from “The Newsroom” a few days ago. I like this one too.
is that the right fallacy? I looked it up and it takes these forms:
No X are Y.
Some Y are not Z.
Therefore, some Z are not X.
No X are Y.
No Y are Z.
Therefore, no Z are X.
x = group of people willing to help other people
y = group of people not willing to help other people
z = democrats
I think you are right, not all democrats are willing to help other people.
I am not slamming democrats just agreeing with your call on the fallacy.
The fallacy of exclusive premises? Wow, that must be some fallacy.
About the time I think you have exhausted all possibilities in your quest for hiking all peaks of illogic, you find a new one: The fallacy of exclusive premises.
Congratulations, I think. Out of respect for raff, I will not work through the mathematical proofs on that.
To all the Democrats who believe in high taxes: Let’s start with your bank accounts and take at least 50% to help pay for all of the people you want to help.
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