The amazing thing is that for all the globe-spanning political vitriol this has provoked, the amount of revenue involved <i>according to the proponents</i> is only €200-€300 million/year, out of €1.3 trillion/year in tax revenue total:<p><i>"Hollande says the 75 percent tax he plans to impose would hit about 3,000-3,500 people and raise around 200-300 million euros a year."</i><p><a href="http://www.reuters.com/article/2012/04/10/us-france-election-policy-idUSBRE83917G20120410" rel="nofollow">http://www.reuters.com/article/2012/04/10/us-france-election...</a><p><a href="https://en.wikipedia.org/wiki/Economy_of_France" rel="nofollow">https://en.wikipedia.org/wiki/Economy_of_France</a>
One of the interesting things never pointed out in these threads is that though the income tax in the US was very high in the mid-20th century, capital gains taxes were low — which affect the rich much more heavily than income taxes. The "robber barons" made all their money on the increasing value of the stock in their companies, not an income they drew from them.<p><a href="http://en.wikipedia.org/wiki/Capital_gains_tax_in_the_United_States" rel="nofollow">http://en.wikipedia.org/wiki/Capital_gains_tax_in_the_United...</a><p>Even this France law apparently only affects "wages" — not sure what that means in France but in the US it wouldn't cover long-term capital gains. BTW, when did millionaire start to mean someone that makes over a million dollars a year rather than has that in assets?
Maybe I'm being too cynical, but it says the tax only applies to this year and the next. It seems like there is an easy workaround - don't take your salary until afterwards, and/or pay yourself in advance now. It's just lip service, really, to keep the public happy.<p>The massively wealthy can afford to wait a couple years for tax laws to revert. And they don't mind waiting - the general public, unaware of reality, believes that the rich are paying more than their fair share of taxes.<p>Meanwhile, new tax incentives and loopholes are created all the time, in every country. You won't know about them, but you can be damn sure that the expensive CPAs do.
The US has had higher tax rates than that at times. It's more of a recent thing that the numbers have been well below 50%<p>Historical US upper bracket tax rate:
<a href="http://s158.photobucket.com/user/OnlyObvious/media/Tax_Rates/TopTaxBracket_TaxRate.jpg.html" rel="nofollow">http://s158.photobucket.com/user/OnlyObvious/media/Tax_Rates...</a>
I think it is an interesting thing. I think it would do no good for France, but for the rest of us it would provide an interesting test regarding the question of if "soaking the rich" is going to make anything better. With rates like 75% one hardly can argue they didn't go far enough. And even if it says it's two years, in two years either the fallacy of it would be obvious and would allow them to quietly roll it back and claim the victory, or it could be claimed a huge success and continued further, so limited term is not a big problem if we see it as an experiment.
It would serve the French right if every single man, woman or child with an ounce of creativity and/or any entrepreneurial ambition at all, just got up and left. Of course, the idea of a bunch of Frenchmen going all "Galt's Gulch" is a bit amusing, but hey...
The "tell" for this article is that there's no comparison with the current tax policy in France. The top tax bracket in France is 41% right now. Hollande's proposal raises this to 50%--an extra 9 euros out of every 100 earned over a million.<p>Also, I certainly hope that people here understand how marginal tax rates work...
"The problem with Socialism is that you eventually run out of other people's money" - Margaret Thatcher.<p>I wonder who the French will tax next...
Here's the new tax: Income above EUR 1 million, tax is paid by the company, amount is capped to 5% of the companies earnings.<p>Congratulations Mr. Hollande, you just created a fabulous tax loophole to get corporate tax down to 5%. Keep up the good work.
So the owner/CEO's lawyers form a holding company in Switzerland which gets paid management fees from the French company to hide it from 'salaries'. The owner pays the personal taxes on the income at lower Swiss rates and transfers it back to France. Taxing it at the corporation level is the wrong move unfortunately. Hopefully they have a better definition of what 'remuneration' means.
Will Smith weighs in: <a href="http://www.youtube.com/watch?v=8TwwEGjoRMo" rel="nofollow">http://www.youtube.com/watch?v=8TwwEGjoRMo</a>
Tax should be the harvest of economic growth and not other way round. If government has to earn more through taxes it should ideally achieve it by increasing overall income of the people rather than screwing those who are earning more. This move for example would make total sense had France done something significant to increase the total number of millionaires in the country or helped several people to get into that millionaire bracket.
It's interesting to consider that tax rates historically have been all over the place. In the United States, for example, the tax rate has been as high as 91% for the top bracket.<p><a href="http://en.wikipedia.org/wiki/Income_tax_in_the_United_States#History_of_top_rates" rel="nofollow">http://en.wikipedia.org/wiki/Income_tax_in_the_United_States...</a>