We have often discussed tax policy on this blog. I am in the minority here on tax policies, particularly the high rate imposed in various countries for top earners. I am admittedly more inclined to a Chicago-school view of such high tax rates than many on this blog. This story caught my eye for obvious reasons. The French government is reporting a 20 percent increase in one year of high earners in leaving the country. We have previously discussed how such taxes produce emigration by rational actors from markets. French President Francois Hollande ran on a pledge to soak the rich in tax increases, a popular political platform but a disastrous economic plan. The result has been predictable. The French economy is in terrible condition and thousands of French families are leaving the country for England, the United States, and other countries. Now, Hollande’s government has announced that it will rescind the tax increase. Hollande and his socialist allies refused to accept the obvious impact of such a tax and now, a few years later, it will remove the tax after losing a huge amount of high earner tax dollars.
The tax applied to all families with assets of more than €800,000 (£630,000). I have French friends who have told me about the devastating impact of the Hollande tax plans. One friend’s family decided to sell off most of their fishing boats because they could not handle the tax burden and make any profit. They let go most of their workers who joined the unemployment lines — adding another cost to such short-sighted policies. Another friend wanted to take his family back to France but decided that he could not because he could not start a business in the country. The business had customers and a market niche but the taxes would not allow him to make any serious profit.
Their stories are reflected in the new reports. Almost half a million French nationals now live in London alone — more than France’s sixth largest city. The number of expats leaving France has been increasing by two percent a year. The 20 percent of high-earners however is particularly harmful for the country, which is chasing away the very earners needed to invest in new businesses, hire new people, and pay most of the taxes.
Manuel Carlos Valls Galfetti, the Prime Minister of France, said that the tax will be rescinded in January. In the meantime, an amazing 85 percent of French voters now oppose Hollande serving a second term.
Source: Independent
Does being a partner (shareholder in a closely held corporation) for about 15 years count as small business…we had 30 or so employees. I eventually left it to return to the military (when we sold out everyone had a job in the new outfit but me, by my design) , thanks to environment for small business in Michigan….e.g., in those days the “Single Business Tax” (SBT) that was actually a well closeted VAT tax…e.g., cost of labor was NOT deductible….but you got no pass through credits, and no advice of tax paid on your retail receipt when you bought something here. Unlike Canada. As the CFO I wrote a large check to the Michigan Treasury twice in loss years since labor expense was not considered an “expense.” Pray tell, where did the author of that abomination ( a Republican BTW) figure the tax remuneration would come from if there was no “income” for the given year? Easy answer: out of you your personal back pocket, fool…that or go get a loan. You have to admit is was the “perfect politician’s tax”…you owe it even if you didn’t earn a dime.
If you hear proposals for a national VAT or “consumption tax”…run for the hills, the little guy will pay it, not the rich. And it is the most regressive tax imaginable. Heck, don’t believe me, I just lived in the bubble for 15 odd years. You must know it sucked for me to leave and return to military, and then the “feds.” (Where you can assume everyone is a liar and individually find the exceptions.)
When I hear debates about who the ultra rich support I laugh my arse off…because it is both parties. As I said earlier, in my locale, I know far more rich Democrats than Republicans….and among the Republicans, they had, and may still have, the same bang you up the behind mind set as the Democrats. I will vote for Gov Snyder (R) because he did one thing I will say hail to the chief for…he dumped the SBT. I can deal with the rest. Same for the Senate campaign of Terry Lynn Land…when she took over the Depart of State here (including the DMV) it took forever to renew a license plate of operators permit. Now it takes less than 48 hours on line. Good enough management cost reductions for me to give her the chance to take over from Senator Levin…even if he has been good at times, his proposed Dem replacement is a dork.
Truth is this is the first year in decades I am willing to vote Republican more often than not here in Michigan….previously, they were all the same. Until John Conyers was re-districted away from me, I voted for him religiously, not because I agreed with his politics, but because when I needed help and representation in Washington, he stepped up…as a Congressman should for a constituent, even a very white one. John Conyers is a man I respect, even if I disagree with 98% of his viewpoints. He does make the rubber meet the road when it counts.
Aridog, As we know, most Wall St. Bankers are Dems. Virtually all of the tech whiz billionaires are Dems. The class envy people just haven’t adjusted their generations old meme yet!
Geez, I don’t know Aridog… my short answer for you, government is FUBAR maybe???
I don’t know the answer to that one Randyjet. I generally do not support Wal Mart, for precisely the reasons you point out. Although they do carry the 38# boxes of cat litter and I get those there. Who would be in charge of the encroaching Wal Marts? We’re all victims of the nasty trade agreements handed to us. Sounds like the TPP is going to be even worse. Glad Obama is keeping us in the loop on that one. ??????
Since I’m asking questions on this thread, vis a vis budget and taxes, etc…and not getting answers, let me ask another one:
Why is it that I always keep hearing how it is the Republicans who are the rich fat cats, when in my town (Detroit and Dearborn), and many other locales, they are also Democrats…sometimes in a majority to boot?
This is why I asked earlier why there must be a bottleneck in the hands of the Senate Majority leader, and possibly the House Speaker (??) (and no matter the party!) that prevents ordinary members of Congress debating a bill and voting up or down? Given the opportunity to discuss and vote without “Boss Tweed” herding them, we might just get to truly representative government.
I mean it isn’t like I have no experience as a “Fed” or military NCO who has no idea who dreams up the crap we were handed to execute. NO formal annual budget for over 6 years. What CR’s did never reflected the budget worksheets we had to turn in every February. You want to feel useless, try being an honest “Fed” or Soldier.
Nick:
Definitely Live Free or Die. It is sad that it has had to come to that again, after only 200 years of a nation’s lifetime.
All they have to do now is work on their family court system, which is actually worse than most states, but you know baby-steps 🙂
Jason Sorens has actually asked me to chair such a committee, but until I am there it would not be practical.
Paul C. Schulte said …
david – we would have never fought Vietnam with a volunteer force.
Really? The first soldiers with feet on the ground in Vietnam and Laos were almost all volunteers, Special Forces mostly, (1959-1960) in operations like Hot Foot and White Star. I still know one of the Hot Foot/White Star guys…he’s one year older than me. Subsequently elements of the 173rd Airborne Brigade, out of the Philippines at the time, were in the Cochin-China and Annamese areas of Vietnam long before it was designated a “campaign.” “Airborne” is voluntary, among the 11B’s and 11C’s, just as any 18 series MOS is…you can not be drafted directly in to either.
Could we have raised the levels to 500K+…without a draft in those days, I think you are correct. Impossible for those times. Money was sure part of it…I went from skilled trades to E-1 overnight. Ouch. And I enlisted for that? Yeah I did. 1968.
The $89 per month you got for a private E-1 wasn’t a big attraction (1968)…nor was the $110 for E-2. Due to the number of NCO’s being killed in those days, by the time I was in 13 months I got a whopping $275 for Sergeant E-5…which over time grew to $500+ with quarters and rations included for living in the native population.
DBQ, The sage advice just keeps flowing.
“All small business owners here, isn’t is special to be lectured to by people who have never run a business.”
I just remember the source and let it pass on by. /wink
All small business owners here, isn’t is special to be lectured to by people who have never run a business. As my uncle who owned the Spinelli family restaurant for decades would say, “Any a-hole who has ever eaten in a restaurant thinks they know how to run one. They could run one, into the freakin’ ground.”
Well, I hope that all you small business owners will support the Walmart family of the Waltons and vote for their interests. I lived in Yreka, CA when Walmart moved in, and ALL the stores along Main Street were GONE! Love that free enterprise system that will run you all out of business.
It is so refreshing to have so many small business owners commenting here. We are the backbone of this nation.
Gary, “LIVE FREE OR DIE.”
A great mix of views here. This time last year the libertarian views expressed here would have been met w/ vile comments. You’re getting a taste of the “hate the rich” class envy but it is within normal limits. The reason is simple, this is no longer an echo chamber. There is a diversity of opinion. Isn’t that wonderful!!
@ shohrss29
If the cost of insurance was taxed as income received to the employee instead of being a perceived freebie to the employee the employee might reconsider having a Cadillac health plan that pays for everything. The main reason for the inflation in medical and drug costs is the underlying over usage of insurance.
A typical employer insurance plan runs about $20,000 a year per employee and household. Sometimes even more! The employer is forced to expend this money and does get a tax break. However, if the employee were taxed an additional 20K on their income tax forms, they might, wisely, choose a more cost effective plan and instead receive a higher SPENDABLE income.
The employer can then either expand his/her business to employ more people —-or give his existing people a raise—-or lower the cost of his products and services. Maybe a little bit of each. Instead millions upon millions of dollars are funneled into the insurance industry for policies that are mostly over-kill and unused. More coverage than is actually needed…..especially for the younger worker.
Less $ to the insurance industry, less inflation of medical costs across the board, more $ in the pockets of the employees and the rest of the economy.
Pogo:
Great post. The left thinks Laffer is an idiot, I wonder if they think that in france now?
By the way, and not entirely unrelated, how did we get to a $94,500+ drug? Once again, the short-sighted ask, “will insurance pay for this?” When the question should be, “why does this cost so much?” Get a half a million people on that and look at the cost then. It is plain this is a pending insurance-medicare shakedown. I am sure if there was no fall-back, the company that invented this drug would in no way try to charge that much for it because there is no vast market to support that.
http://www.medicinenet.com/script/main/art.asp?articlekey=184562&ecd=mnl_day_101314
Well, I don’t carry water for the super rich, that is apparently Obama’s job. Protecting wall street is where the big money is. Those bankers should be in the federal pokey eating the federal pokey ice cream from the ice cream machine there (there’s one of them in town, I wish I could live like they do…). Like Gary says, just no way I am looking to open the door for employees on top of my own 36% tax I pay now. And I have often thought of Jim22’s idea–everyone should have have to write that gleeful quarterly tax check to the government. Once you have collected that money, THEN have to give it back… it gives everyone that warm special feeling. I love mailing that in then reading about how the NSA watches everything we do. I think I’ll put a special jpg on my desktop just for them.
barking dog:
they screw up a state and then they leave it and go to another state and screw it up. they are like locusts and destroy everything in their path. I think NC is turning blue. Get out while you can.
David:
Are they brining up that crap about 100% tax over $400,000 again? Most people made around $5,000.00 back then.
And as you say, there were plenty of deductions. It is the same crap they pull about Reagan being the biggest taxer in history. Mostly morons and the uninformed believe that BS, the ones selling it have an agenda which isnt in the best interest of any of us.
God save us from people who think robbing Peter to pay Paul leads to prosperity.
North Carolina gets a lot of NYC ex patriots who, when they retire, flee the high real estate taxes. When they get down here they know everything. They speak in a funny lingo which we dogs call “turdy, turd and a turd” which is how they pronounce a street intersection in NYC. If they actually knew everything they would not have had to flee the town they love. Same with the Frogs. They voted this guy in and now they need to live with the consequences. He even looks Dutch.