Unfortunately I don't have any links to the articles, Financial Times requires a login to view, but surely many news hubs have been talking about this today. New French president plans a 75% tax on individuals that make 1M Euro or more, and is causing many of the upper class French citizens to look at moving to the UK. Not good.
France elects socialist president, 1M+ euro income = 75% tax??
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TheWinterSnow
Den Mørke Natt
And they say socialism is good, redistribution of wealth is good...and where would all that new revenue go to, more social services or even less efficient government spending. I'd be surprised if the Frenchies don't start their own Spanish protest that we saw last year.
JeffTD
Senhor Testiculo
Are you sure it's not a progressive tax rate where you're taxed 75% of your income over €1mil? There's a very, very big difference.
~BURNY~
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Mutant
I hate that supercow !
LOL 75% !
If i were a french factory owner employing 50 people and earning 1M Euro a year, i would start thinking about firing them all, selling all equipment and the building and moving the business to any european country with a sane government and less than 50% tax for the rich.
= at least 250K Euro / year saved on taxes for just one time cost of moving the business.
If i were a french factory owner employing 50 people and earning 1M Euro a year, i would start thinking about firing them all, selling all equipment and the building and moving the business to any european country with a sane government and less than 50% tax for the rich.
= at least 250K Euro / year saved on taxes for just one time cost of moving the business.
Mutant
I hate that supercow !
Ah so it is 75% of earnings above 1M ?
Well same reply then but change the "1M Euro" to "2M Euro"...
Well same reply then but change the "1M Euro" to "2M Euro"...
TesticleMilkshake
pewpewlazrz
http://en.wikipedia.org/wiki/Government_of_France
France's government has almost an identical structure to that of the US and the UK, with executive, legislative, and judicial branches. In theory, Parliament (which appears left leaning?) would have to vote a 75% tax on the wealthy into law. Even though I know very little French politics, I don't think this is going to happen. According to the interbutts (aka Google) 2 million Euro is roughly equal to, a little bit over $250,000 US. This puts the upper-middle class family at risk, which is a considerable number of French people. 50%, I can see happening, but 75% seems a bit unrealistic. If 75% does happen, the US will probably benefit if French companies do not want to move to the UK (remember, they are still on the pound and the Euro to US Dollars would work to their benefit) Also, what was the average rate of income tax on the $250,000+ income bracket during the Clinton years?
Lastly, according to Wikipedia, since 1958, there have been numerous socialist or left-leaning economically, French Presidents, including one communist. During these times, France didn't seem to suffer too much; standard of living didn't seem to be compromised, to a point where it severely impacted societal growth. There have been riots and protests, but overall no overhauling political changes since WWII. The only crazy stuff I remember is a protest mirroring OWS, involving college students building Shantytowns during the early 2000's, but that's it. In fact, France is ranked something like 5th largest economy in the world, 2nd largest in Europe. That's pretty amazing considering all the intense political/social Revolutions France faced since the 1700s. My opinion, shit ain't gonna change, it's just shitty media coverage in the US and things taken out of context on a cultural level. While socialism may or may not be the greatest thing in the world, Social Security and Medicare are prime examples of socialism at work. :rollseyes:
I'm just going to assume that Hollande is the Obama to Sarkozy's Bush. Sarkozy, as a person, was an asshole, though, I think Bush had a bit more class.
Edit: 2 million Euro = 2,617,400 US dollars, so will probably effect more corporate entities than people, small businesses but has potential to push larger businesses out of the country, pull jobs from economy.
France's government has almost an identical structure to that of the US and the UK, with executive, legislative, and judicial branches. In theory, Parliament (which appears left leaning?) would have to vote a 75% tax on the wealthy into law. Even though I know very little French politics, I don't think this is going to happen. According to the interbutts (aka Google) 2 million Euro is roughly equal to, a little bit over $250,000 US. This puts the upper-middle class family at risk, which is a considerable number of French people. 50%, I can see happening, but 75% seems a bit unrealistic. If 75% does happen, the US will probably benefit if French companies do not want to move to the UK (remember, they are still on the pound and the Euro to US Dollars would work to their benefit) Also, what was the average rate of income tax on the $250,000+ income bracket during the Clinton years?
Lastly, according to Wikipedia, since 1958, there have been numerous socialist or left-leaning economically, French Presidents, including one communist. During these times, France didn't seem to suffer too much; standard of living didn't seem to be compromised, to a point where it severely impacted societal growth. There have been riots and protests, but overall no overhauling political changes since WWII. The only crazy stuff I remember is a protest mirroring OWS, involving college students building Shantytowns during the early 2000's, but that's it. In fact, France is ranked something like 5th largest economy in the world, 2nd largest in Europe. That's pretty amazing considering all the intense political/social Revolutions France faced since the 1700s. My opinion, shit ain't gonna change, it's just shitty media coverage in the US and things taken out of context on a cultural level. While socialism may or may not be the greatest thing in the world, Social Security and Medicare are prime examples of socialism at work. :rollseyes:
I'm just going to assume that Hollande is the Obama to Sarkozy's Bush. Sarkozy, as a person, was an asshole, though, I think Bush had a bit more class.
Edit: 2 million Euro = 2,617,400 US dollars, so will probably effect more corporate entities than people, small businesses but has potential to push larger businesses out of the country, pull jobs from economy.
Mutant
I hate that supercow !
amarshism
Member
TheWinterSnow
Den Mørke Natt
~BURNY~
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TesticleMilkshake
pewpewlazrz
John_C
formerly Skeksis268
It's an interesting experiment, but i'm glad it's not happening in anywhere i have to live. We shall see... I kinda hope it works
TesticleMilkshake
pewpewlazrz
Agreed, don't know if it would work for us in the US on a federal level because regions of the country are divided into economic sectors. I live outside of NYC, and the economy is horrible because we are mostly corporate and financial offices, areas hit hardest by the recession. Manufacturing was also hit super hard because of companies outsourcing. However, I know certain regions of the US (my guess, agriculture, foresting in the Midwest, sunnier parts of Cali, certain parts of the South, Pacific Northwest) were not hit as hard, especially since their economies are more "earth based." (let me know if I'm wrong)
Also, people bet excessive amounts of money against the value of their homes, and when the housing bubble collapsed, debts became larger than total sums of assets. Right now, it's a buyer's market.
Trevoire520
Member
I'm pretty sure there were a bunch of french businessmen who had actually been telling the government to tax them more to help with the recession.
Anyone earning over a million quid a year has no right to complain about anything in all honesty. I'll gladly trade places with them if earning so much money is a big problem for them.
Anyone earning over a million quid a year has no right to complain about anything in all honesty. I'll gladly trade places with them if earning so much money is a big problem for them.
MarcusGHedwig
Member
Can we maybe get a link to a news story confirming this? Googling it turned up lots of stuff from Feb-March, but I couldn't find anything about the whole 75% thing written since he got elected, leading me to think it maybe was just a pipe dream of his
LeSedna
Mat or Mateo
At this moment I think it's 50 or 60% in the very end (not sure though) and yes it would be a progressive tax indeed, just like any other tax law (for example I pay taxes in ireland and there are several progressive tax levels. it's 40% over something like 2600e/month). So under 1M there is a 40ish% of taxation, and any euro earned over 1M would be taxed to 75%. But I don't think it's gonna happen for real, it looks like an improvisation by Holland to get free advertisement, many of his close specialists were surprised themselves he said that on television a month ago. This is called ISF here, Impot sur la Fortune, and this new level would only affect 10000 persons or something like that. I don't think it's applicable on companies though, its very name implies its on fortune, which is different, it's personal enrichment. But, indeed, many fear that because some individuals are threatened by bigger tax whatever the actual %age will be, they will wanna leave the contry at least from a legal point of view, and since obviously most of those people own or lead companies, it could have an effect on those as a result. Turns out in the past (with the different tax systems we have had over the century) this effect was not as strong as people claim it could be.
EDIT: found the number : it's 59% in the end for someone who would earn 2M because of the several "slices" of taxation. If you add the values for each slice (the money representing that slice multiplied by that slice's tax percentage), one after the other, the last one being 75% on the top 1M, you end up with a 59% tax on a 2M income. The difference compared to the actual system is 18%, with the same calculation.
The thing is that this is ONE taxation, there are many other ones that are designed for high incomes. There are also a lot of legal ways to avoid paying taxes as much, so in the end in the actual world people pay all in all way less taxes than that. Even more surprising, the highest incomes pay less in % than an average salary. Starting from a certain value, the %age of overall tax is not 40ish anymore but 30ish, with only legal means, so imagine with illegal ones (like abusing buying art objects which are not taxed, stuff like that)
There are other laws that would limit the max %age you are taxed if I'm right, which existed before under other presidents, which limit the overall value of the addition of all taxes one can be entitled to pay, as an insurance you are gonna earn a minimum %age of your money. Sarkozy wanted that maximum level of tax to be 50% (which means that whatever happens tax wise, you cannot be taxed to more than 50%) and I think he removed it because it was judged unfair by lowest incomes, and hollands wants it to be higher than that, as well, to limit fiscal evasion.
There are many articles (in french though) which explains more the actual logics of french taxation over high incomes, it's more complicated than just "they are gonna pay half more than what they do at the moment", eventhough in any case yeah high incomes will pay just more. It is not expected to make a big difference because they are so few.
It's of course taken out of context. Hollande said he actually wants to make this applicable, so we shall see how it turns out to be. Most people are in doubt here and think this was just a move to please the people and get votes because it only concerns...3000 persons, so making 3000ppl angry is worth the millions others ! But I don't think he would have said such a thing knowing it will only make people flee from the country and therefore have a negative impact on our economy. At least, I hope ! But I read some analysts said that in the past, other decisions made by sarkozy (including taxing at 75% the "golden parachute" retirement some companies pay to their ex CEO) that were supposed to make people flee, didn't. In the same vein, the limit of 50% of taxation sarkozy made which was a progress for high incomes (because before that they would pay a higher amount all included) didn't make people come back to france either. It turns out this kind of decisions are not enough to indue such an effect in real life, or the very few individuals that do don't have an impact on a large scale.
In any case, he has not the full power to pass such a law, it has to be approved, and cannot be approved if it is judged "confiscatoire" (confiscatory ?) which more or less means it wouldn't pass if it's judged unfair and counter productive.
Another important thing to mention about upcoming taxes, is that I think I heard mentioned the fact than for this taxation, you wouldn't be able to flee the country, because as long as you are french, you are entitled to pay for it, whatever you do. I can't explain details because I don't know them, or say if that was about this very tax, but there is something like this in his plans. There were an estimation of more than 500 billion that escape our tax system right now in europe (dunno if it's every year or just a static number), and this is worth a big part of our debt today (our debt is 1650 atm). So if there is a legal way to avoid legal, or illegal, fiscal evasion, at least a little, it can only be a good thing because this money is genuinely supposed to be french, not sleeping in a numbered account in switzerland.
All in all, this was a political move, because at the end of the day, even if everyone pays this new tax, it's only 500 million euro more in the state pocket. It's far from being the solution of our problems (debt being 3200 times more than that, and growing). It's more a moral decision than a pure financial move. And the very highest fortunes have already evaded from our system like in any other country, to go to switzerland or wherever they go to, so it's not gonna affect those ones so much more I guess.
One can clearly see how good a free advertisement it was, because even yourself in the US are talking about it, while nothing else caught attention in his program. Talk about money, and you have all the ears in the world listening to you with interest !
EDIT: found the number : it's 59% in the end for someone who would earn 2M because of the several "slices" of taxation. If you add the values for each slice (the money representing that slice multiplied by that slice's tax percentage), one after the other, the last one being 75% on the top 1M, you end up with a 59% tax on a 2M income. The difference compared to the actual system is 18%, with the same calculation.
The thing is that this is ONE taxation, there are many other ones that are designed for high incomes. There are also a lot of legal ways to avoid paying taxes as much, so in the end in the actual world people pay all in all way less taxes than that. Even more surprising, the highest incomes pay less in % than an average salary. Starting from a certain value, the %age of overall tax is not 40ish anymore but 30ish, with only legal means, so imagine with illegal ones (like abusing buying art objects which are not taxed, stuff like that)
There are other laws that would limit the max %age you are taxed if I'm right, which existed before under other presidents, which limit the overall value of the addition of all taxes one can be entitled to pay, as an insurance you are gonna earn a minimum %age of your money. Sarkozy wanted that maximum level of tax to be 50% (which means that whatever happens tax wise, you cannot be taxed to more than 50%) and I think he removed it because it was judged unfair by lowest incomes, and hollands wants it to be higher than that, as well, to limit fiscal evasion.
There are many articles (in french though) which explains more the actual logics of french taxation over high incomes, it's more complicated than just "they are gonna pay half more than what they do at the moment", eventhough in any case yeah high incomes will pay just more. It is not expected to make a big difference because they are so few.
It's of course taken out of context. Hollande said he actually wants to make this applicable, so we shall see how it turns out to be. Most people are in doubt here and think this was just a move to please the people and get votes because it only concerns...3000 persons, so making 3000ppl angry is worth the millions others ! But I don't think he would have said such a thing knowing it will only make people flee from the country and therefore have a negative impact on our economy. At least, I hope ! But I read some analysts said that in the past, other decisions made by sarkozy (including taxing at 75% the "golden parachute" retirement some companies pay to their ex CEO) that were supposed to make people flee, didn't. In the same vein, the limit of 50% of taxation sarkozy made which was a progress for high incomes (because before that they would pay a higher amount all included) didn't make people come back to france either. It turns out this kind of decisions are not enough to indue such an effect in real life, or the very few individuals that do don't have an impact on a large scale.
In any case, he has not the full power to pass such a law, it has to be approved, and cannot be approved if it is judged "confiscatoire" (confiscatory ?) which more or less means it wouldn't pass if it's judged unfair and counter productive.
Another important thing to mention about upcoming taxes, is that I think I heard mentioned the fact than for this taxation, you wouldn't be able to flee the country, because as long as you are french, you are entitled to pay for it, whatever you do. I can't explain details because I don't know them, or say if that was about this very tax, but there is something like this in his plans. There were an estimation of more than 500 billion that escape our tax system right now in europe (dunno if it's every year or just a static number), and this is worth a big part of our debt today (our debt is 1650 atm). So if there is a legal way to avoid legal, or illegal, fiscal evasion, at least a little, it can only be a good thing because this money is genuinely supposed to be french, not sleeping in a numbered account in switzerland.
All in all, this was a political move, because at the end of the day, even if everyone pays this new tax, it's only 500 million euro more in the state pocket. It's far from being the solution of our problems (debt being 3200 times more than that, and growing). It's more a moral decision than a pure financial move. And the very highest fortunes have already evaded from our system like in any other country, to go to switzerland or wherever they go to, so it's not gonna affect those ones so much more I guess.
One can clearly see how good a free advertisement it was, because even yourself in the US are talking about it, while nothing else caught attention in his program. Talk about money, and you have all the ears in the world listening to you with interest !
LeSedna
Mat or Mateo
An article in Lemonde.fr explains that in 2009, the average actual taxation on the 0.01% of >1.2M€ income was 18% (even less than I said in my previous post). So this whole thing would indeed be more a symbol and a pedagogic move than a solution of any problem. The difference for them would probably be a few % in the end of the day, with all their legal ways to reduce fiscality (investment, art, etc)
LeSedna
Mat or Mateo
To have the shit precise and clear, here are the actual numbers (the € figures are gonna increase a little bit but should be about the same as now, and of course there should be the addition of two new slices)
<5963€ - 0%
5964 to 11896€ - 5,5%
11897 to 26420€ - 14%
26421 to 70830€ - 30%
70831 to 150 000 - 41% (until now it was up to infinite, now if it is applied the limit for this would be 150 000)
150 001 to 1 000 000 - 45%
>1 000 001 - 75%
on that you add the other taxes on incomes :
one that is a plan made up in 2011 because of the crisis (those numbers add up on the above list)
>250 000 : 3%
>500 000 : 4%
and the 3rd one which is directly taken on salaries (only salaries, not other types of income)
Last thing to mention is that this is valid for a single person. Depending on your family, if you are married or not, etc, these values are lowered. They are also valid on a "fiscal house" (or whatever it's called in english) so two persons together who would earn a lot individually won't pay it individually either, but that is obvious (marriage etc)
<5963€ - 0%
5964 to 11896€ - 5,5%
11897 to 26420€ - 14%
26421 to 70830€ - 30%
70831 to 150 000 - 41% (until now it was up to infinite, now if it is applied the limit for this would be 150 000)
150 001 to 1 000 000 - 45%
>1 000 001 - 75%
on that you add the other taxes on incomes :
one that is a plan made up in 2011 because of the crisis (those numbers add up on the above list)
>250 000 : 3%
>500 000 : 4%
and the 3rd one which is directly taken on salaries (only salaries, not other types of income)
Last thing to mention is that this is valid for a single person. Depending on your family, if you are married or not, etc, these values are lowered. They are also valid on a "fiscal house" (or whatever it's called in english) so two persons together who would earn a lot individually won't pay it individually either, but that is obvious (marriage etc)
I was hoping some guys from France would chime in here. Thanks LeSedna.
Fo sho. My friend sent me the link and just told me the new president planned to have that taxation. I honestly know nothing about the guy, his policies, the elections, other candidates or their policies, any of that. Only what I read from that article from FT.com.
LeSedna said:
Fo sho. My friend sent me the link and just told me the new president planned to have that taxation. I honestly know nothing about the guy, his policies, the elections, other candidates or their policies, any of that. Only what I read from that article from FT.com.
