Alexander Reed Kelly reports at Truthdig that France’s leftist President Francois Hollande announced a 75 percent tax on the personal incomes of anyone earning more than $1.3 million a year beginning in 2013. The increase will be effective for two years. France, the world’s fifth-largest economy, is trying to plug a “$48 billion hole in the budget” and raising revenue is a sensible place to start.
Of course, the top earners in France are freaking out warning that such a tax burden will kill businesses and drive the French equivalent of “job creators” elsewhere. And of course, they are voicing the old complaint that “it’s going to be very, very difficult to attract talent to work in France, almost impossible.” Right.
The refrain has been heard virtually everywhere a tax increase has been proposed in the Western world in the last 50 years. In the United States, the marginal tax rate—the percentage taken from every dollar of personal income earned past a certain amount—reached 94 percent in 1944, and with the exception of a four-year period in the late 1940s, didn’t dip below 90 percent until Congress accepted President Kennedy’s tax reforms in the mid-1960s. Rates remained at or above 70 percent through the Carter administration, and after Ronald Reagan’s drastic reform program in the early ’80s, settled amid their current range in the 30th percentile in the early ’90s.
Kelly says Hollande’s administration will come up with other ways to support and retain businesses that provide French society with vital jobs, income and tax revenue. And, that may not be as hard as it sounds as moving large businesses out of France cannot be done overnight. After all, it took decades for American businesses to move offshore.
Hollande is forcing a test of the conventional wisdom that says high taxes on individuals and corporations drive societies toward financial ruin. The results of Hollande’s test could end up standing the assumptions, upon which a majority of modern economies are currently based, on their head. Of course, the shrill voices of doom forget that Norway, Sweden and Denmark have had very high taxes for decades and are doing just fine.
Hollande vows to fight for gays and women
On September 25, President Hollande delivered an historic speech before the UN General Assembly, calling on the body to reject the criminalization of homosexuality around the world.
Hollande has promised to pass a law in France permitting marriage of same sex persons in 2013, a proposal that, according to Capital.fr, is supported by the majority of the French people. He told those assembled that France would lead the way in an honorable fight for universal human freedoms:
This is why France will continue to carry out all these battles: the abolition of the death penalty, women’s rights to equality and dignity, and for the universal decriminalization of homosexuality that can not be recognized as a crime but as a recognition of [sexual] orientation.
He added:
All members countries have the obligation to guarantee the security of their citizens, and if one nation adheres to this obligation, it is then imperative that we, the United Nations, facilitate the necessary means to make that guarantee. These are the issues that France will lead and defend in the United Nations. I say this with seriousness. When there is paralysis . . . and inaction, then injustice and intolerance can find their place.
Who is Francois Hollande?
Francois Hollande was elected President of France on 6 May 2012, defeating the incumbent Nicolas Sarkozy. He is the second Socialist President of the Fifth French Republic, after François Mitterrand who served from 1981 to 1995. His policies include the following:
▪ Foreign policy: supports the withdrawal of French troops present in Afghanistan by the end of 2012.
▪ European politics: Proposes a closer Franco-German partnership.
▪ Financial system: backs the creation of a European rating agency and the separation of lending and investment in banks.
▪ Energy: endorses reducing the share of electricity generated by nuclear power in France from 75 to 50% in favor of renewable energy sources.
▪ Taxes: revenues above 1,000,000 euros per year to be taxed at a 75% rate (rates for part of the income below a million not changed).
▪ Education: supports the recruitment of 60,000 new teachers.
▪ Recruitment of 5,000 judges, police officers and gendarmes.
▪ Construction of 500,000 state ruled homes per year.
▪ Restoration of retirement (paid by the State) at age 60 for those who have contributed more than 41 years.
▪ Hollande supports same-sex marriage and adoption for LGBT couples, and has plans to pursue the issue in early 2013.
▪ The provision of development funds for deprived suburbs.
▪ Return to a deficit of 0% of GDP in 2017.