Hollande Government Pledges To Rescind High Tax on Top Earners After 20 Percent Increase in Such Families Leaving France

300px-Eugène_Delacroix_-_La_liberté_guidant_le_peupleWe 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Manuel Carlos Valls Galfetti, the Prime Minister of France, said that the tax will be rescinded in January.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

143 thoughts on “Hollande Government Pledges To Rescind High Tax on Top Earners After 20 Percent Increase in Such Families Leaving France”

  1. Lloyd Blankfien – bankster – “It’s interesting how these small business owners crow about their well-bong and quality of life but despise the fact that they feel ‘forced’ to pay into their employees benefits. Workers should not receive raises because it takes away from profits. Minimum wage increases reward the least talented. No healthcare, since it’s a socialist plot. No unemployment insurance sine it’s foolish to pay someone not to work. No vacation or sick days, since it takes away form productivity. No childcare assistance, since it ain’t my responsibility you got pregnant. No pension, since it’s up to you to save for retirement. If you don’t like it, please go find a job elsewhere. But we want your 100% dedication and respect. And take a drug test and do a background check. Grab your credit report and search the public records for any violation. We demand your complete attention so we can increase profits in order to live a more comfortable life, but please don’t ask us for anything…..it’s not our responsibility…..”

    Lloyd, And any one of these poor souls you are describing can stick their own neck out and start their own business. they can also pay more taxes then they are supposed too and not shop at Wal Mart so they can pay more for a t-shirt. Live your dream, no one is stopping you.

  2. Read the blogs a bit late but read most of them. There are two themes at play. Many of the bloggers own small businesses or have had successful careers working for someone else; others have rage and vile hatred for those that own small businesses or have had successful careers. The former understand economics, business and capitalism; the latter have failed (or been fired), blame others (but not themselves) and want the government to take money, property and rights from the successful and give it to them.

    So, there you have it. France is merely this week’s example.

    I welcome the failure of France’s socialism. And I welcome those “rich” Frenchman to America.

    How about a foreign exchange program? We’ll take the successful French businessmen and we’ll send them half of JT’s bloggers.

  3. Its amusing how people who make a couple hundred thousand a year, identify with people who are Billionaires and multi-millionaires. George Soros and execs at AGI and Goldman Sachs must be laughing their heads off. Rubes, you can’t make them up.

  4. We are small business owners, and we pay our employees above the average for this industry. They take off time whenever they want.

    So, don’t have any idea what you’re talking about.

    Are all small business owners evil and selfish who hate their employees? Weird. So it’s not just the rich now who are awful, it’s business owners, too? This is like Mean Girls, and it’s getting hard to keep track of who I’m supposed to hate this week.

  5. People or businesses are going to make tax decisions that benefits them the most. Expense cutting is just part of microeconomics.

  6. Shafar… I would hope most folks on this blog see through the distorted realities you point out. I don’t think anyone here is for “unfettered capitalism.” We have laws, and they should be followed, but unfortunately, some of the most important, like Glass–Steagall have been done away with through the fault of both political parties. Now, both parties are working on TPP in secret and are trying to get that through as quietly as possible, so we already know that is an issue. I would like to see an even playing field, not “controls.”

  7. I would suggest that those commenting here who “intuitively” have solutions to that tax situation become familiar with what is reality and what what is not.Familiarize yourselves with some truly shocking revelations about how the government operates and qui bono from its tax policies
    Unequal Protection – Thom Hartman
    The Great American Tax Dodge – Donald L. Barlett and James B. Steele
    America – Who Stole the Dream Donald L. Barlett and James B. Steele
    America – Whole Really Pays the Taxes Donald Barlett and James B. Steele
    America – What Went Wrong – Donald L. Barlett and James B. Steele
    Perfectly Legal – David Cay Johnston
    Free Lunch – David Cay Johnston

    It is said that when you rob Peter to pay Paul you can be assured of getting Paul’s votes. Intuitively that seems to be make correct. However, what is the stark reality is that the “Pauls” have been propagandized into thinking that they’re voting for their best interests when in fact this is so far removed from reality it is appalling. The reality is that the message that Paul thinking contributes to people who have already sold the souls and votes to the fat cats and banksters and the the suckers have been conned with prayer in schools and fear of intrusive government, same gender marriage, and a fervent religious-like devotion to unfettered capitalism and vote falsely thinking they’re voting against those Wall Street banksters, “big government”. Not only do they vote for those who votes in Congress are against their interest, they contribute to the coffers that are overflowing with cash from the very ones they think they are fighting against but are that ones who have their Senators and House Reps. in their back pockets.
    See: What the Matter with Kansas? How Conservatives Won Over the Heart of America – Thomas Frank

  8. I am not exactly sure who you are addressing Lloyd, but if you think you can fix all the issues discussed here with what’s in my business checkbook–please help yourself!
    There is always talk about regulations. More regulations. We had regulations in 2008 that said the banks that went bad were to be seized by the government and their assets sold off. But, guess what?? Like everything else, the law went out the window when push came to shove. Old Hank protected his buddies and that is the end of the story. If people want to complain, they should start with the government–banking revolving door. If I see some change there, I’ll consider other arguments.

  9. Interesting stories on Wal Mart. It is sad, but they are the savior to poor rural Appalachia. I almost think after being in one for a while over the weekend that we would see an Eleanor Roosevelt WV poverty crisis if it weren’t for the cheap staples provided by Wal Mart. It is very painful to see. I don’t know what it means, but I do know that after the 2008 meltdown the bankers aren’t suffering like these people are.

  10. It’s interesting how these small business owners crow about their well-bong and quality of life but despise the fact that they feel ‘forced’ to pay into their employees benefits. Workers should not receive raises because it takes away from profits. Minimum wage increases reward the least talented. No healthcare, since it’s a socialist plot. No unemployment insurance sine it’s foolish to pay someone not to work. No vacation or sick days, since it takes away form productivity. No childcare assistance, since it ain’t my responsibility you got pregnant. No pension, since it’s up to you to save for retirement. If you don’t like it, please go find a job elsewhere. But we want your 100% dedication and respect. And take a drug test and do a background check. Grab your credit report and search the public records for any violation. We demand your complete attention so we can increase profits in order to live a more comfortable life, but please don’t ask us for anything…..it’s not our responsibility…..

  11. Man, Airdog, I bet you have some stories to tell! When you have the feeling in your gut that you do now, it is, indeed time to move on! Best of luck in future endeavors–I am sure you will find a fit where your skills will be appreciated in earnest.

  12. “I do enjoy immensely non-business owners declaring that I am absolutely wrong in how policy X will negatively impact me.

    It’s the Marxist canard of ‘false consciousness’, that you are unaware how you are being oppressed, and they know better what’s good for you.

  13. Randyjet:

    Walmart vs Main St. That is a difficult problem. Consumers WANT Walmart prices. That’s why the more expensive Main St stores cannot compete. But then we all miss the customer service and employee knowledge that went along with that Main St store. Those small stores must find their niche to survive and thrive.

    We have no right to outlaw big box stores, or prevent customers from shopping in them. So what are we to do? I buy from a local small hardware store when I can, but there are many times that I know I can only get what I need from Home Depot, or that’s where I’ll get the best price. Does that make me a bad person – seeking out the best selection at the best price? And I buy electronics from large stores, typically, for the same reason.

    What do you suggest we should do to big box stores? Do you buy an exact same item at a much higher price just to use a small store, like a TV, for example?

    If it’s any consolation to you, now big box stores are hurting because we can all now shop online for the best price.

  14. Aridog – it’s unusual to get a question answered here, if it would involve addressing uncomfortable facts.

    DBQ – yes, I do enjoy immensely non-business owners declaring that I am absolutely wrong in how policy X will negatively impact me. I have outlined the limited choices faced by employers multiple times when they are faced with enormous cost incases, whether it’s a massive hike, Obamacare, or doubling the minimum wage. Layoff, reduce hours, or increase costs of your goods/services, so everyone pays for it. The average franchise owner takes home about $95,000/year. Doubling minimum wage changes that to a massive loss.

    No one ever replies, or comes up with a solution. It’s layoff, reduce hours, or hike prices. That’s pretty much it. And yet, the same people continue to declare that these policies will have no impact whatsoever on employers.

    Defies reason. But emotional arguments are not based on reason.

  15. dust bunny queen:

    randyjet is a communist so he doesnt understand that. He doesnt care that poor people save money by shopping at wal mart, all he cares about are the small shopkeepers. The petite bourgeoisie, oh my.

  16. randjet said: I lived in Yreka, CA when Walmart moved in, and ALL the stores along Main Street were GONE!

    Well, each location is different I suppose. I live in Northeastern Cal A mid sized town relatively near had a WalMart superstore go in. There was all the gnashing and wailing that accompanies a new WalMart. But, since that store went in there has been a boon in merchandising stores near by and in new restaurants and fast food establishments. They don’t offer the same things as WalMart and that is how THEY survived. Several antique and thrift stores went in a small older mercantile area. A new grouping of outlet stores arose. Even the local grocery stores who offer better meat than WalMart have seen some upswings. Plus the number of JOBS that were now available in that little hub town that were not before.

    I KNOW Yreka. The downtown is difficult to navigate through. Small narrow streets. Old historic types of buildings that are difficult to improve and very small in square footage. Very little parking available. Not much to pull in the tourist trade. Main Street in Yreka had a lot of problems before WalMart. Overpriced ordinary goods and not much in the way of specialty stores. Terrible customer service in some stores as well. Limited merchandise. You couldn’t find many things in your size or they were just out of whatever you wanted and no indication of when they would be restocking. In addition the demographics surrounding the area are people who are generally poorer, rural and shop for essentials.

    Yes. It is a shame for the merchants that they cannot compete with WalMart. However, that is their problem. They are trying to compete WITH WalMart instead of finding a complementary type of merchandise or something that is unique.

    People who felt that the horseless carriage was going to ruin their buggy business….were correct. Those that adapted and got out of the buggy business and took advantage of the early auto business survived. You change with the times or die.

  17. slohrss29 said…

    Geez, I don’t know Aridog… my short answer for you, government is FUBAR maybe???

    No argument from em on that one. Frankly, for good or bad, we elected Mr. SNAFU twice did we not? And before him, the old Nixon West Wingers Cheney and Rumesfeld? Yee f’ing G-d.

    My point is that is DOES NOT have to be …the problems are not among the general service grade civil servants, it is in the appointed SES levels and above (think Lois Lerner as a fine example) and a Congress that herd’s everyone else like sheep in to a tight coral and left to pee on their own feet….e.g., run by one or two people, max.

    There really were and are some of us military and or “fed” folks who try to do a good job, not rob the public, and keep everyone honest. I work, still, with several of those types (voluntarily, F’off the Anti Deficiency Act)…and half our time is spent making sure we don’t hack of some dipwad SES. You know what that will earn you? Fired is what.

    Are you aware that it is against the law to voluntarily be of advice and counsel to the government for gratis? Even if you spent a 40 odd year career learning things that the new folks need to know and will never get if you don’t provide it?

    The powers that be insist that they have you by the short hairs with a contract and pecuniary remuneration so they demand you agreed with them, even if they are insane.

    But you know what, when I am done with the most recent issue I am consulting on (a very ugly one that will burn nation wide, or worse…FBI is already involved, plus even higher investigators (makes me sick that men can be so shallow and self interested), to the benefit of Joe Sixpack taxpayer, who is who I have always worked for, both as a “Fed” and as a soldier, … I will give up. Period. Its not the money, I’ve been offered $100+ per hour plus expenses, it is the chore itself. I have had enough. F’em from here on out.

    Crap…I have already talked too much. Have a nice evening y’all. 🙂

    1. Are you aware that it is against the law to voluntarily be of advice and counsel to the government for gratis?

      That may be true, but during WWII, they had plenty of execs working for the government at the salary of $1/yr. JFK had his salary of $1/yr by the way. So did Hoover, but that is about all he was worth.

  18. randyjet:

    This is a good propositional question, but relatively easy to answer for a libertarian.
    If someone, anywhere can provide products or services of equal value for a lower cost than I can to the local public, then it is I who am not living up to the representations of worthiness to the my customers.
    Of course, “of equal value” is often in the details. Sometimes even when a product is less expensive than I can provide, a customer factors in all the support service, expertise, continuing knowledge of their situations and the friendliness that I offer, as part of the “equal value” equation.

    I can claim no moral or ethical right to expect a customer to use my services and products over a competitor’s, if what I am offering is lesser in value.

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