France Ends 75% Tax on Super-Rich

[The Intransigent Faction]

The eye-catching and eye-watering 75% payroll tax rate in France was quietly killed off by the government Thursday after failing to raise significant revenue. The tax was also accused of driving high earners away from France. The tax raised only €420 million ($505.8 million) in 2013 and 2014 combined (http://uk.businessinsider.com/r-france-waves-discreet-goodbye-to-75-percent-super-tax-2014-12), less than 0.5% of France's budget deficit. It expires at the end of this month and will not be renewed, as the government tries to take a more business-friendly approach.
Earlier in 2014, President Francois Hollande, who made the 75% rate a key plank of his election in 2012, reshuffled his cabinet as part of a pro-business drive. He brought in Emmanuel Macron, a former Rothschild investment banker, as economy minister.
Macron referred to France's top tax rate as "Cuba without the sun." He replaced socialist firebrand Arnaud Montebourg, who had become increasingly critical of the French government's inability to revive growth.
Things are still looking pretty bleak for the French economy. France's major statistical agency expects growth of just 0.3% in the first half of the new year, an extremely sluggish pace.
Such slow growth means that extremely high unemployment levels are unlikely to be reduced anytime soon. France's jobless rate climbed back to 10.4% in the latest figures (http://uk.businessinsider.com/frances-unemployment-rate-just-climbed-back-to-record-levels-2014-12), wiping out a year's worth of modest progress in reducing the number.


Yet another nail in the coffin for reformism.

[RevUK]

It was a soft policy anyway. It's time to start machine gunning the rich into pits and taking all their money.

[RevUK]

This makes me sick. Even if it didn't raise a penny, they should have kept this policy. Because fuck the rich.

[ckaihatsu]

Things are still looking pretty bleak for the French economy.




Yet another nail in the coffin for reformism.


So economic conditions were bad before the new tax on the rich, but taxes of *any* kind are a *disincentive* to investment and economic activity -- also, the government's deficit spending (Keynesianism approach) isn't having its intended result, of being a *stimulus* to new economic growth.

Similar to Japan:


http://blogs.independent.co.uk/wp-content/uploads/2014/09/5.png


If the state, through tax revenue or anything else, isn't helping the economy, and it isn't helping the workers / people, then what *is* it good for -- ?(!)

[RedKobra]

When Hollande is finally kicked out the right-wing reaction could be horrendous. The "socialists" have made a mockery left-wing politics, at least as far as the majority of french moderates will view it. We need to be giving the moderate reasons to ally with the working class against the capitalists not driving them into the capitalists arms.

[Vladimir Innit Lenin]

So economic conditions were bad before the new tax on the rich, but taxes of *any* kind are a *disincentive* to investment and economic activity -- also, the government's deficit spending (Keynesianism approach) isn't having its intended result, of being a *stimulus* to new economic growth.


Sorry but whilst I don't have much time for Keynesian economics in general, this isn't factually correct.

Taxes beyond a certain rate are ineffective not because of this 'psychological' dis-incentive towards investment, but because they incur a deadweight loss that is equal to private investment minus (government investment + 'bureaucratic costs/state inefficiency'). In other words, it is perfectly possible that any loss in private investment due to higher taxes can be offset by an equal amount of government expenditure. This only doesn't hold true where loss of private investment due to tax exceeds revenue from tax, but that seems unlikely.

Of all Keynesian economic policies, high taxation is one of the least bad, because the money raised can in theory be used for social goods such as healthcare, education, pensions, and welfare payments. I suspect the failures of high taxation lie more with the spending traits of governments, rather than the idea of re-distribution of wealth from rich to poor itself.

[ckaihatsu]

Sorry but whilst I don't have much time for Keynesian economics in general, this isn't factually correct.

Taxes beyond a certain rate are ineffective not because of this 'psychological' dis-incentive towards investment, but because they incur a deadweight loss that is equal to private investment minus (government investment + 'bureaucratic costs/state inefficiency'). In other words, it is perfectly possible that any loss in private investment due to higher taxes can be offset by an equal amount of government expenditure. This only doesn't hold true where loss of private investment due to tax exceeds revenue from tax, but that seems unlikely.

Of all Keynesian economic policies, high taxation is one of the least bad, because the money raised can in theory be used for social goods such as healthcare, education, pensions, and welfare payments. I suspect the failures of high taxation lie more with the spending traits of governments, rather than the idea of re-distribution of wealth from rich to poor itself.


Okay, understood and acknowledged -- the take-away from all of this is that these things are *relative*, since it could be argued that you're making a statement in support of reformism, which none of us support in principle.

I'll also use this opportunity to include an illustration of this overall dynamic of political relativism:


Ideologies & Operations -- Left Centrifugalism

http://s6.postimg.org/3si9so4xd/110211_Ideologies_Operations_Left_Centrifug.jpg (http://postimg.org/image/zc8b2rb3h/full/)

[tuwix]

Yet another nail in the coffin for reformism.

First of all, it was very stupid tax. It was stupid because it was easily avoidable. A one company formed by internet in so-called tax heaven can avoid such tax.

Let's be honest: all income taxes are easily avoidable for the rich ones. If there is a will to tax the richest, then there should be tax on whole their property including all possessions and financial assets. It is not avoidable so easily. You can't move your house with family to tax heaven where quality of life is much lower... And there is no stock exchange and other capitalist toys...

[DOOM]

Well it was a stupid idea to begin with.

[Creative Destruction]

I'd be interested in an analysis of this in relation to Piketty's reasoning that the best way to combat ills in capitalism is a "global" tax on wealth.

[tuwix]

It's exactly what should be done to tax rich ones. But I agree with Slavoj Žižek that it won't be done due to core qualities of capitalism that is power of bourgeoisie.

[DOOM]

It's exactly what should be done to tax rich ones. But I agree with Slavoj Žižek that it won't be done due to core qualities of capitalism that is power of bourgeoisie.

..and why exactly should it be done this way? Is it freeing us from alienation? Is it freeing us from the absurdity of valorisation? From the patriarchy? From racism, antisemitism and other forms of capitalist injustice?
It's just populist bullshit. There is no sense in "taming" capitalism.

[Vladimir Innit Lenin]

..and why exactly should it be done this way? Is it freeing us from alienation? Is it freeing us from the absurdity of valorisation? From the patriarchy? From racism, antisemitism and other forms of capitalist injustice?
It's just populist bullshit. There is no sense in "taming" capitalism.

I think, to be fair, that as long as the end of capitalism in a country like France is not an immediate prospect, it is obviously preferential for money to be re-distributed (in theory, anyway), from the bank accounts of the rich to public services and social welfare. Of course, it's not as simple as that, but I think that opposing measures that can - in the short-term at least - have some positive impact on people's day-to-day lives because of some vague rant about racism and capitalist injustice is really cutting your nose to spite your face.

Also, your obsession with anti-semitism is a bit weird. I'm not one of those 'anti-semitism doesn't exist' racists, but even as somebody from a Jewish background who really does see that there is some element of anti-semitism in society and amongst some on the 'left', I think you're taking this a bit far.

[bricolage]

First of all, it was very stupid tax. It was stupid because it was easily avoidable. A one company formed by internet in so-called tax heaven can avoid such tax.

Let's be honest: all income taxes are easily avoidable for the rich ones. If there is a will to tax the richest, then there should be tax on whole their property including all possessions and financial assets. It is not avoidable so easily. You can't move your house with family to tax heaven where quality of life is much lower... And there is no stock exchange and other capitalist toys...
Yeah, I wonder how much this policy was undercut by tax evasion/avoidance. Probably quite a lot.