News France to introduce 75% income tax rate on earnings above 1 million euros

[2AlphaMales?!]

http://www.businessinsider.com/france-millionaires-tax-2012-7

I'm green with envy - oh to live in a country with a genuinely progressive socialist government. Perhaps a guillotine could be imported afterall...

 

[Ryan_m_b]

I do have a hope that social democracy will increase across Europe, preferably adopting something similar to the Nordic Models.

 

[leroyjenkens]

Isn't that a bit high? Most of the wealthy people will just move.

 

[phyzguy]

Isn't that a bit high? Most of the wealthy people will just move.

The top income tax in the US was 70% until the early 1980's, and was even higher in the 1950s and 1960s.

 

[2AlphaMales?!]

Isn't that a bit high? Most of the wealthy people will just move.

Not if they agree with this kind of progressive taxation. That's the main problem with classical economics IMO - it assumes that "people acting in their own self interests" always equals "people trying to make as much money for themselves as possible". In actual fact, people feeling good about themselves is more important than having that additional 0.25 million euros at least some of the time. A "warm glow" is priceless, and a guilty conscience weighs a ton.

 

[Ryan_m_b]

Not if they agree with this kind of progressive taxation. That's the main problem with classical economics IMO - it assumes that "people acting in their own self interests" always equals "people trying to make as much money for themselves as possible". In actual fact, people feeling good about themselves is more important than having that additional 0.25 million euros at least some of the time. A "warm glow" is priceless, and a guilty conscience weighs a ton.

Whilst I'm sure that applies to some people I think another way to look at this is that there are benefits to living in a country that pays higher tax along with the fact that most people aren't just up for moving on a whim internationally. A bigger problem IMO will be tax avoidance.

 

[rootX]

My comments don't change since the last time. France is going down the gutter IMO.

I feel like this guy is going to destroy France.

(https://www.physicsforums.com/showthread.php?p=3902303#post3902303)

Whilst I'm sure that applies to some people I think another way to look at this is that there are benefits to living in a country

I believe it benefits to people who look forward to sucking to social welfares.

 

[2AlphaMales?!]

My comments don't change since the last time. France is going down the gutter IMO.

(https://www.physicsforums.com/showthread.php?p=3902303#post3902303)



I believe it benefits to people who look forward to sucking to social welfares.

Do you have any evidence many people enjoying "sucking to social welfare" actually exist? Everybody I know would rather work for their reasonable living standard, if they could, in order to hold some sense of pride and honour in contributing and not just sponging. Do you believe in literal vampires? You can't prove they don't exist either...

 

[2AlphaMales?!]

Whilst I'm sure that applies to some people I think another way to look at this is that there are benefits to living in a country that pays higher tax along with the fact that most people aren't just up for moving on a whim internationally. A bigger problem IMO will be tax avoidance.

I remember the last French PM kicking up a real storm at the UN about tax havens...didn't get too far mind AFAIK. Even the right wing French politicians seem determined to distribute the wealth more evenly.

 

[nitsuj]

My comments don't change since the last time. France is going down the gutter IMO.
I believe it benefits to people who look forward to sucking to social welfares.

Well at least you say IMO.

Your last comment is a truism so who cares. As 2AlphaMales?! pointed out that's a personality trait and not one restricted to the French.

If you could be so kind as to mention your country of origin, perhaps we could have a comparative in this context.France going down in the gutter? In what sense? There government from a financial perspective? Hardly.

It has plenty natural resources (Food, Energy, raw inputs), it won't ever "go down in the gutter".

GDP per capita (PPP)
France - 35k
UK - 36K
USA - 48K

Unemployment
France - 9.9%
UK - 8.3%
USA - 8.25%

National Debt per Capita
France - 75k
UK - 143k (!)
USA - 50kAll that comparative data is pretty useless in light of the question "Can they acquire more debt and from who?"

France wouldn't have much of an issue borrowing money. Given the resources available.

Greece is in a slightly different position. Not much for them to offer, lest signage on historical monuments. France is pretty far from that.

France's biggest issue is civil unrest and this actually addresses it...IMO.

 

[mege]

I guess if you don't enjoy financial (see above tax), religious (see Muslim persecutions in France) or personal freedoms (see France's excessive Police powers and lack of search protections) - France might be a good place to live. Very progressive indeed.

Comparatively: I have respect for the Nordic liberal-societies since they have a high regard for personal freedoms (despite their very strong central governments). Still not my ideal, but far more tolerable than what France is. The farming and transportation/service unions run France and punish anyone with any individualism in them (what's the total uptime for the trains in France? Have they gone a year without a strike? Not what I want to hear when I have to rely on public transportation to get anywhere...).

 

[phyzguy]

I guess if you don't enjoy financial (see above tax), religious (see Muslim persecutions in France) or personal freedoms (see France's excessive Police powers and lack of search protections) - France might be a good place to live. Very progressive indeed.

Comparatively: I have respect for the Nordic liberal-societies since they have a high regard for personal freedoms (despite their very strong central governments). Still not my ideal, but far more tolerable than what France is. The farming and transportation/service unions run France and punish anyone with any individualism in them (what's the total uptime for the trains in France? Have they gone a year without a strike? Not what I want to hear when I have to rely on public transportation to get anywhere...).

Have you ever spent any time in France? As an American who lived in France for four years, I beg to differ. It is a wonderful place to live: beautiful scenery, good food, friendly people, plenty of leisure time, etc. On your train comment, I was impacted by a rail strike once in the 4 years I lived there. The French TGV (high-speed train) goes three times as fast as our trains in the US, so you waste a lot less time when you are on the train compared to the US. Which is better, wasting a couple of hours every time you take the train, or being impacted by a strike every few years?

If you think there is no individualism in France, all I can say is you must not have spent any time there. I met some of the most unique people I have ever seen.

As far as the tax situation, I was good friends with a number of engineers in France who were basically in the same socio-economic situation I was in, and it seems to come out about the same as in the US. Yes, they pay higher taxes, but in exchange, health care and education are nearly free, and retirement is taken care of. Have you tried putting anyone through college in the US lately? - count on 250K$ when all is said and done. What I saw was that the US engineers have more take-home pay, but they end up saving it all to pay for retirement, college, and health care.

 

[mege]

Have you ever spent any time in France? As an American who lived in France for four years, I beg to differ. It is a wonderful place to live: beautiful scenery, good food, friendly people, plenty of leisure time, etc. On your train comment, I was impacted by a rail strike once in the 4 years I lived there. The French TGV (high-speed train) goes three times as fast as our trains in the US, so you waste a lot less time when you are on the train compared to the US. Which is better, wasting a couple of hours every time you take the train, or being impacted by a strike every few years?

If you think there is no individualism in France, all I can say is you must not have spent any time there. I met some of the most unique people I have ever seen.

As far as the tax situation, I was good friends with a number of engineers in France who were basically in the same socio-economic situation I was in, and it seems to come out about the same as in the US. Yes, they pay higher taxes, but in exchange, health care and education are nearly free, and retirement is taken care of. Have you tried putting anyone through college in the US lately? - count on 250K$ when all is said and done. What I saw was that the US engineers have more take-home pay, but they end up saving it all to pay for retirement, college, and health care.

I've been to France several times over the past few decades (I have family in Lux and Germany). As an American visiting - the change is scenery to Europe is refreshing. I love the architecture, countrysides and food. Partially, because it's something different and yet classic. However, when those relatives come to the US - I'm still set back at how much they gorge themselves on (what I see as) simple things. Even paying tariffs and shipping - it's still cheaper for them to buy school supplies (just as an example) in the US. They ship back $100s of dollars of paper, pens and pencils from Sams Club to get them through a few years. The same amount of supplies would cost them at least double, even after shipping and duty. There are other things which are more expensive in Europe: fuel, housing, electricity, food. All of these significantly so when compared to the US. I'd actually argue that the REASON health care and education is so expensive in the US is because of the excessive subsidies and control that are exerted on them. All that 'free' money gets made up for somewhere.

Where are you looking that college is $250k? My sister received almost no scholarships and has less than $100k debt for 4 years of undergrad + her Audiology Doctorate (my brother-in-law has a Pharm.D. and is about the same - ~100k for 7 years of school). $250k better be getting you an MD or a JD from a very nice university, or you just made a bad choice in where you are going to school. My undergrad is going to put me max $20k in debt. But I guess when it's my money and my responsibility, I don't overspend my wallet. This is all besides the point as the US universities are a destination - how many people in the US desire to go to a European university? Even with the great 'remedial meltdown' which is occurring in US Universities - the most modest of schools are international beacons.

 

[KiwiKid]

I'm not so sure this is a good thing. I don't know *that* much about economics, but as far as I can see there are basically two ways of looking at it:

1. Those people earn much more than they need, and there are plenty of things we could spend that extra money on, so higher taxes for those people seem reasonable.
2. Those people earn so much money because they apparently do work other people find especially valuable. Taxing them extra would therefore be very bad and stifle innovation.

 

[Ryan_m_b]

I'm not so sure this is a good thing. I don't know *that* much about economics, but as far as I can see there are basically two ways of looking at it:

1. Those people earn much more than they need, and there are plenty of things we could spend that extra money on, so higher taxes for those people seem reasonable.

It's also that money decreases in utility the more you have. In otherwords $1000 will mean far less to someone who already has with $100,000 and far more to someone who has $100.

2. Those people earn so much money because they apparently do work other people find especially valuable. Taxing them extra would therefore be very bad and stifle innovation.

There's an argument that this is only part of the story and another big consideration is how much profit high earners make off of the work of others. A simple example but does a full time manager who earns five times more than than a full time minimum wage worker do five times as much work or does work that is five times more productive etc.

I'm not broaching any opinions here, just providing FYI.

 

[AlephZero]

You need to remember that two important sports/pastimes in France are philosophy and street theater. Having a revolution is a great way to combine both of these, of course. Something like Hollande's tax proposal also hits both spots.

An article in the Financial Times this week pointed out the reality. First, it will only affect about 3000 people, and second, it won't raise enough money to fix the government finances even if nobody tries to avoid it. But those are just boring practical details. Think of it as an updated replay of 1789, and it makes perfect sense.

 

[russ_watters]

There's an argument that this is only part of the story and another big consideration is how much profit high earners make off of the work of others. A simple example but does a full time manager who earns five times more than than a full time minimum wage worker do five times as much work or does work that is five times more productive.

Trouble is, there is no objective way to measure. However, those on the left always leave off one such possibility when giving samples: does the CEO do work that only 1/5 of the population can?

Or does he do work with 5x the impact?

And of course, that all assumes there should be such a relationship, as opposed to, say, letting market economics play at least some role. What scares me about these discussions is that those on the left don't tend to see/acknowledge any role for market economics.

 

[Ryan_m_b]

Trouble is, there is no objective way to measure. However, those on the left always leave off one such possibility when giving samples: does the CEO do work that only 1/5 of the population can?

Or does he do work with 5x the impact?

And of course, that all assumes there should be such a relationship, as opposed to, say, letting market economics play at least some role. What scares me about these discussions is that those on the left don't tend to see/acknowledge any role for market economics.

The latter I meant to cover with 5x the productivity but you're right to mention the former (though whether or not you deserve 5x pay because you're 1/5th of the population that can do it is contentious). What I find worrying about your terminology though is the simplification of politics in such a way. This isn't anything against you, so many people do it. But saying "the left do this" or "the right do that" firstly oversimplifies political opinion to a simple spectrum that doesn't exist and secondly detracts from any debate by bringing into much "he said she said" arguments.

 

[OmCheeto]

You need to remember that two important sports/pastimes in France are philosophy and street theater. Having a revolution is a great way to combine both of these, of course. Something like Hollande's tax proposal also hits both spots.

An article in the Financial Times this week pointed out the reality. First, it will only affect about 3000 people, and second, it won't raise enough money to fix the government finances even if nobody tries to avoid it. But those are just boring practical details. Think of it as an updated replay of 1789, and it makes perfect sense.

3000 out of 65,000,000?

hmmm...

The topic of raising taxes on wealthy people reminds me of Stewart at the Doctor.

Nooooooooo!​

 

[lisab]

You need to remember that two important sports/pastimes in France are philosophy and street theater. Having a revolution is a great way to combine both of these, of course. Something like Hollande's tax proposal also hits both spots.

An article in the Financial Times this week pointed out the reality. First, it will only affect about 3000 people, and second, it won't raise enough money to fix the government finances even if nobody tries to avoid it. But those are just boring practical details. Think of it as an updated replay of 1789, and it makes perfect sense.

Only 3000 people? That's really surprising to me.

Population of France ~65,630,000
Number earning over 1 million euro: 3000
Percent earning over 1 million euro: 0.0046%

Population of US: ~313,847,000
Number earning over $1,238,000 : ~1,099,000
Percent earning over $1,238,000: 0.35%

http://politicalcalculations.blogspot.com/2010/12/whats-your-us-income-ranking.html

So the US has roughly 75 times more people in that high income group, normalized by population. Wow, I knew our income distribution was different but that's amazing to me.

 

[KiwiKid]

So the US has roughly 75 times more people in that high income group, normalized by population. Wow, I knew our income distribution was different but that's amazing to me.

Hm, perhaps a clearer picture of income distribution can be gained by looking at this table. This shows the ratio of average income of the highest 10% and 20% to the lowest 10% and 20% are 9.1 and 5.6 in France, and 15.9 and 8.4 in the USA.

 

[russ_watters]

(though whether or not you deserve 5x pay because you're 1/5th of the population that can do it is contentious).

That's my point: all of those possible measuring sticks are based on a subjective judgement so ultimately none are very useful as as a way to judge what is fair. They are more of a red herring - A made-up calculation designed to create the appearance of unfairness.

What I find worrying about your terminology though is the simplification of politics in such a way. This isn't anything against you, so many people do it. But saying "the left do this" or "the right do that" firstly oversimplifies political opinion to a simple spectrum that doesn't exist and secondly detracts from any debate by bringing into much "he said she said" arguments. [emphasis added]

If two or more people hold the same opinion, it becomes useful to create a label for what that group believes in order to unify them and simplify the discussion. Otherwise, it can appear that there are several or billions of different viewpoints out there when in reality there may be only two or a one-dimensional array.

I chose "left" as my label purposely because I expected it to be the least controversial of my choices and least likely to generate an OT response attacking the label instead of the argument [fail]. My first choice was "socialists", but that term tends to generate about the strongest response of any word not considered vulgar, even though I think it is technically more precise and accurate than just saying "left", since one who is only slightly left of center should not completely reject/omit capitalistic principles in favor of socialistic ones. I also briefly considered "French", but I don't think anyone in this thread is actually French and didn't want to insult anyone [/Cartman].

The use of language becomes much more cumbersome if we're not allowed to use appropriate labels because of people taking offense to even accurate ones (see: "What's in a name? For my friends and simpaticos... enough to go ballistic at the mere mention of the phrase... First, there's enough to be afraid of in this world -- from big government to monsters under the bed. We shouldn't be afraid of words." http://www.cnn.com/2012/07/06/opinion/navarrette-illegal-immigrant/index.html?hpt=hp_c1 )

 

[Mech_Engineer]

How do we know that a lower income distribution ratio is better? If hypothetically everyone in a country made the exact same income, there's no incentive to start companies, innovate, or work hard to increase your wealth...

 

[KiwiKid]

How do we know that a lower income distribution ratio is better? If hypothetically everyone in a country made the exact same income, there's no incentive to start companies, innovate, or work hard to increase your wealth...

Technically, this could mean everything was doing enormous amounts of good work for fun. But this doesn't seem likely. Or, as Paul Graham wrote: "if your society has no variation in productivity, it's probably not because everyone is Thomas Edison. It's probably because you have no Thomas Edisons."

 

[phyzguy]

How do we know that a lower income distribution ratio is better? If hypothetically everyone in a country made the exact same income, there's no incentive to start companies, innovate, or work hard to increase your wealth...

I don't think anyone is saying that everyone should make the same - we clearly don't want that. On the other hand, we also don't want one person to have everything while everyone else is starving. So there is a sweet spot somewhere in the middle, and the debate is on where this sweet spot is. To me the problem in the US is that we have had such a large growth in inequality over the last 20-30 years, so that almost all of the growth in the economy has been absorbed by the top tier of the population while everyone else has stayed even or moved backwards.

 

[russ_watters]

Hm, perhaps a clearer picture of income distribution can be gained by looking at this table. This shows the ratio of average income of the highest 10% and 20% to the lowest 10% and 20% are 9.1 and 5.6 in France, and 15.9 and 8.4 in the USA.

Hmm. Another interesting slice of data on that list is Gini before and after taxes and transfers. France and the US have virtually identical Gini's before taxes and transfers (unexpected when you consider the number of millionaires), but France's is far lower after taxes and transfers. So those two stats could be used to measure the effect of (magnitude of) redistribution in a country. Why would I do that? Simple: the inequality in the US is often pointed out. It is interesting to me that before government gets involved, we have no more inequality than France. It is often said that high taxes generate an inherently more equal society by reducing wages. But while the French have successfully reduced their fraction of millionaires, their society is not any more inherently equal than ours: their added equality is all generated after-the-fact, by government intervention after you've taken your paycheck home.

 

[russ_watters]

I don't think anyone is saying that everyone should make the same - we clearly don't want that. On the other hand, we also don't want one person to have everything while everyone else is starving. So there is a sweet spot somewhere in the middle, and the debate is on where this sweet spot is.

Actually, that's how people [uh oh...gotta avoid using a label here] who favor more equality try to frame the argument, but those of us on the other side do not accept that framing. That framing implies a zero-sum game (that having one person rich requires another to be poor), the absence of which is precisely why we favor less restriction on inequality. And I believe that objective data shows both to be true, such as the increased gini in China coinciding with increased GDP and decreased poverty. My side believes it isn't coincidental or even counteracting the improvements: the increase in gini is a direct reflection of the cause of the improvements. Increased freedom causes inequality which causes poverty reduction/GDP growth.

 

[2AlphaMales?!]

So the US has roughly 75 times more people in that high income group, normalized by population. Wow, I knew our income distribution was different but that's amazing to me.

Yup, that's a real eye-boggler.

The stat I was aware of which principly illustrated the wide income distribution in the USA is that the IHDI (inequality adjusted HDI) league table sees the USA drop 19 places, from joint third to twenty third, just above Estonia. Only Columbia drops more places following inequality adjustment of all the nations foer which data is available. It should be noted that HDI and IHDI don't just moniter income but also health and education, however since these things are largely dependent on wealth in the USA it seems a fairer reflection of income distribution there than for other nations, which aren't historically diametrically resistant to communism socialism.

Then again, GNH (gross national happiness) could well be more important than IHDI anyway, as the rulers of the kingdom of Bhutan insist (the only country in the world where tobacco is illegal). Americans generally seem very friendly and cheerful, so they could well better off still, regardless of all the trailor parks and whatnot.

 

[Ryan_m_b]

That's my point: all of those possible measuring sticks are based on a subjective judgement so ultimately none are very useful as as a way to judge what is fair.

I disagree: they're useful but only amongst those with similar values.

I chose "left" as my label purposely because I expected it to be the least controversial of my choices and least likely to generate an OT response attacking the label instead of the argument [fail]. My first choice was "socialists", but that term tends to generate about the strongest response of any word not considered vulgar, even though I think it is technically more precise and accurate than just saying "left", since one who is only slightly left of center should not completely reject/omit capitalistic principles in favor of socialistic ones. I also briefly considered "French", but I don't think anyone in this thread is actually French and didn't want to insult anyone [/Cartman].

The use of language becomes much more cumbersome if we're not allowed to use appropriate labels because of people taking offense to even accurate ones (see: "What's in a name? For my friends and simpaticos... enough to go ballistic at the mere mention of the phrase... First, there's enough to be afraid of in this world -- from big government to monsters under the bed. We shouldn't be afraid of words." http://www.cnn.com/2012/07/06/opinion/navarrette-illegal-immigrant/index.html?hpt=hp_c1 )

It's not a question of offence IMO (at least it isn't for me) it's one of accuracy. Left and right are actually French terms and stem from whether or not you support the kind (sit on the left side of parliament if not, right side if you do). Whilst the meaning has evolved in time there are so many meanings that it is pointless (and that's not even taking account the difference between American and European usage). Libertarians could be called left, as could liberals but both have very different beliefs when it comes to the role of government in economics. Even things like a nolan chart is limited even though it is much better. Personally if I'm going to say certain people believe X I'll use a term that actually represents them. "Left" and "right" are IMO lazy labels that really serve no purpose other than to mean "those people I don't agree with" or "those people I agree with".

With relevance to this thread I have no real idea who you mean when you say "left".

 

[mege]

Trouble is, there is no objective way to measure. However, those on the left always leave off one such possibility when giving samples: does the CEO do work that only 1/5 of the population can?

Or does he do work with 5x the impact?

And of course, that all assumes there should be such a relationship, as opposed to, say, letting market economics play at least some role. What scares me about these discussions is that those on the left don't tend to see/acknowledge any role for market economics.

The latter I meant to cover with 5x the productivity but you're right to mention the former (though whether or not you deserve 5x pay because you're 1/5th of the population that can do it is contentious). What I find worrying about your terminology though is the simplification of politics in such a way. This isn't anything against you, so many people do it. But saying "the left do this" or "the right do that" firstly oversimplifies political opinion to a simple spectrum that doesn't exist and secondly detracts from any debate by bringing into much "he said she said" arguments.

I don't think that what a person earns really has that much to do with direct productivity - managers (and any form of corporate/business leadership) make what they make because of the responsibility involved as well. If I am the CEO of a company with 10,000 employees - my actions and decisions effect 10,000 people, and their livelyhood is in my hands. Do you trust anyone off the street to do that job? The money is there to (hopefully) attract the most qualified, skilled, individual adept at keeping a business moving to actually keep employing 10,000 people (or more). If everyone made the same earnings - why would I take on the extra stress and responsibility? Conversely - why would I want to work for someone who's willing to take that responsiblity so lightly?

As a caveat - I do think that most companies are over-managed (ie: too many layers of leadership and general-do-nothings), but I generally have little problem with CEO/management pay differences because of the above. This is also associative with the relative increase in CEO/upper-management pay. The 'bottom' jobs haven't changed in 30 years that much whereas at the top companies keep getting larger and more complex (and thus the executives are responsible for more people). Is there some corruption? Of course - but as a rule most companies are growing and are able to hire more people because of the responsibility bred by those (honestly) working at the top.

Some people are good at hammering nails, some people good at counting them, some people are good at making them, and some people are good at making sure the others get paid.

 

[Evo]

The thread went too off topic. Please try to keep posts specifically on the French tax.

Thanks.

 

[OmCheeto]

The thread went too off topic. Please try to keep posts specifically on the French tax.

Thanks.

Argh! Did I miss something?

I'm in favor of the 75% French tax.

In a world where people can become multi-billionaires, with the flick of an IPO, I think we need some leveling.

Technology, along with the sheer number of people on this planet, makes it possible for anyone with a $1 idea, to become incredibly wealthy, instantly.

Not that it was their fault, that they had a $1 idea.

But it strikes me, that those without new ideas, have been yielding their "influence", in a kind of side game, that has really tipped the economic sensibility of the planet on it's head.

 

[rootX]

France going down in the gutter? In what sense? There government from a financial perspective? Hardly.

Putting 75% income tax on earnings above 1 million euros means killing the incentive to earn above 1 million i.e. killing incentive to grow/open business. Hollande is in complete ignorance when he said "Above 1m euros [£847,000; $1.3m], the tax rate should be 75% because it's not possible to have that level of income". US has quite a few under 30 who earn more than one million yearly and they did not inherent fortune from their parents (http://www.incomediary.com/top-young-entrepreneurs). How many under 30 millionaires France has?

It has plenty natural resources (Food, Energy, raw inputs), it won't ever "go down in the gutter".

It doesn't take too much effort to lose competitiveness. France works in global economy and if it doesn't promote innovation/businesses/efficiency it will soon go down in terms of economic growth. When France wants to charge CEO for downsizing the company, I wonder about their future.

France's biggest issue is civil unrest and this actually addresses it...IMO.

As explained above, I was NOT referring to civil unrest or government bankrupting. It's more about losing economic growth relative to other countries that don't have as many socialist policies as France.

 

[2AlphaMales?!]

The desire for economic growth implies a state of inadequate provision. In 500 years do you think governments will still be chasing economic growth, or will society be in such an obvious state of "post scarcity" (ie - there's enough for everybody to live in serious luxory, bar things like fifteen gold plated lemurs each) that things like equality are given more priority? Not to mention the significant negative aspects of unnecessary economic activity (AKA economic growth). 75% taxation on post 1 mil seems a pleasing and optimistic appraisal of the state of affairs in France IMO - no need to maintain a "Darwinian killing field" interpretation of free-market competitiveness, where it's all astronomical wealth inequality and winners/losers, if you're living in an effective post scarcity economy.

 

[nitsuj]

Only 3000 people? That's really surprising to me.

Population of France ~65,630,000
Number earning over 1 million euro: 3000

Population of US: ~313,847,000
Percent earning over $1,238,000: 0.35%

Number of "French" living in US 9.5million * 0.35% = 33.5k

PPP (Purchasing Power Parity) spread on GDP per person between France and the US is 10k.

Compared to Canada it's only 5k.

I personally think that isn't much of a difference. And is mostly likely the difference between #of cars/and other multiples of goods (tv's ect), size of house ect. And not a "Have/Have not" type of situation, not at PPP GDP per capita figures of 30K or so.

Some CIA Factbook numbers on % of population below "National Poverty":

France - 65.6 * 6.2% = 4.1million in "national poverty"
USA - 301 * 15.1% = 45.5million in "national poverty"

Wow, often being reffed to as the wealthiest nation in the world, I find those numbers very surprising.

If you want to get rich live in the USA, if you don't want to be poor live in France. My interpretation of these Statistics confuses me

But one thing I'm not confused about, I don't want to be poor. (below "National Poverty")

Getting into "Crime stats" next would be fun (specifically robbery/theft/fraud), but maybe a bit of a stretch assuming cause/effect relationship between crime & income inequity stats.

Does inequality "foster" crime? Maybe a good poll question.

 

[OmCheeto]

Putting 75% income tax on earnings above 1 million euros means killing the incentive to earn above 1 million i.e. killing incentive to grow/open business.

I've never understood this logic.

If Jacques the Ploomaire' is making http://emploi.trovit.fr/salaire/plombier-chauffagiste euros a year, it's going to take him a long time make a million. If instead, he decides to start his own business, and succeeds due to some bizarre marketing scheme, he'll be able to make 1,000,000 euros a year, and never be bothered by the new tax. His post tax income would be 32 times what he made as a simple Plumber. Imagine that, a whole 32 year career, reduced to 1.

And what if he made 2,000,000 euros? He'd be bringing home only an extra 250,000 euros a year. But that is still 12 times his past take home pay. Let me do some more math for you:

income____equivalent plumber take home pay in years
1,000,000_32.3
2,000,000_45.7
3,000,000_59.1
4,000,000_72.5
5,000,000_85.9

It looks to me like Jacques business, no matter how big it gets, is going to be profitable for him.

I simply do not understand poor little rich plumber tax logic, in any nation.

Numbers are based on the wiki entry on income tax in France, 2009, and the new 75% rate
_0.0%___________0___________5,875
_5.5%_______5,875__________11,720
14.0%______11,720__________26,030
30.0%______26,030__________69,783
41.0%______69,783_______1,000,000
75.0%___1,000,000__10,000,000,000

 

[nsaspook]

I think 'Jacques the Ploomaire' will make the very logical calculation that being on vacation will be better than working for small fraction of his pay if his yearly earnings exceed 1,000,000 euros.

 

[OmCheeto]

I think 'Jacques the Ploomaire' will make the very logical calculation that being on vacation will be better than working for small fraction of his pay if his yearly earnings exceed 1,000,000 euros.

Depends...

on how big a house his wife ultimately wants.



There are so many variables. But for me, it's all about the bed* I sleep in.

*Both literally and figuratively. A nice bed is awesome. A nice nation to live in, is equally awesome.

ps. I am so left wing, I would like to move to France to start my new business. But... the jerkwad chef at work posts all the menu items in French, so I don't know what I'm ordering. And when I ask what it is, he says, in his demeaning stupid fake French accent; "You don't speak French? Oh! Poo poo blah blah blah blah." ... I think he knows that I hate him.

 

[gravenewworld]

Did all of the rich people move out of the good 'ol US of A when they were taxed over 90% in the upper bracket under Eisenhower?

 

[rootX]

The desire for economic growth implies a state of inadequate provision. In 500 years do you think governments will still be chasing economic growth, or will society be in such an obvious state of "post scarcity" (ie - there's enough for everybody to live in serious luxory, bar things like fifteen gold plated lemurs each) that things like equality are given more priority? Not to mention the significant negative aspects of unnecessary economic activity (AKA economic growth). 75% taxation on post 1 mil seems a pleasing and optimistic appraisal of the state of affairs in France IMO - no need to maintain a "Darwinian killing field" interpretation of free-market competitiveness, where it's all astronomical wealth inequality and winners/losers, if you're living in an effective post scarcity economy.

"Post scarcity" is a crackpot (over speculative) concept.

 

[nsaspook]

Depends...

on how big a house his wife ultimately wants.

Now you've done it, turned a logical economic decision into a lose/lose scenario. Negative feedback reduces gain and happiness. The visual of poor Jacques forced to toil under a sink by a demanding spouse is not pretty.

http://hollywouldink.files.wordpress.com/2012/06/funny-plumber.jpg

 

[2AlphaMales?!]

"Post scarcity" is a crackpot (over speculative) concept.

People being contented with a decent standard of living is not an over speculative concept.

Saying it's necessary for annual millionnaires to have greater than a 25% of further income financial incentive to work "harder", or else France is doomed to fail as a country...now there's a crackpot (paranoid) idea.

 

[OmCheeto]

... Negative feedback reduces gain and happiness. ...

Do not, speak, in engineering terms, to me, in P&WA!

Negative feedback occurs when information about a gap between the actual value and a reference value of a system parameter is used to reduce the gap. If a system has overall a high degree of negative feedback, then the system will tend to be stable.

Negative feedback produces stability.

Taxes as feedback:

Somalia: ~zero taxes, ~zero stability
USA: ~lowest industrialized national taxes, high stability, and we have to buy what we want
France: ~highest industrialized national taxes, high stability, and cheese and wine galore!

Conclusion?

None... Other than, don't move to Somalia.

But seriously, how some people view taxes strikes me as bizarre. I view taxes as the equivalent of rent. The more you pay, the better the accommodations.

Would you rather live rent free in Somalia, or pay half your wages to live in France?

My apologies to anyone here at the forum who is from Somalia, or may have relatives in Somalia, but it is #1 on the list of failed states, which would make an interesting topic on its own. The USA and France are almost tied! And what the hell makes Finland the least failed state?

 

[KiwiKid]

Negative feedback produces stability.

I heard China is also quite stable.

 

[nsaspook]

But seriously, how some people view taxes strikes me as bizarre. I view taxes as the equivalent of rent. The more you pay, the better the accommodations.

Would you rather live rent free in Somalia, or pay half your wages to live in France?

Rent as taxes is great. Pay forever, own nothing and make some-else rich.

Somalia? Easy choice, I'd pay 120% in taxes not to be there. I 'visited' the disputed areas around Kenya and Somalia after the Soviets left in the late 1970's, some of our guys even made the trip to Mogadishu (Our HQ was in Mombasa, Kenya). Even then almost all the armed forces of the many sides were doped up on khat, extremely trigger-happy and a child's live was worth less than a stick of gum.

http://www.justice.gov/archive/ndic/pubs31/31482/

 

[JonDE]

People being contented with a decent standard of living is not an over speculative concept.

Saying it's necessary for annual millionnaires to have greater than a 25% of further income financial incentive to work "harder", or else France is doomed to fail as a country...now there's a crackpot (paranoid) idea.

Is this 75% actually going to be the effective tax? For some reason I highly doubt it.

 

[OmCheeto]

Is this 75% actually going to be the effective tax? For some reason I highly doubt it.

The original article seems to imply that it is a marginal rate:

http://www.businessinsider.com/france-millionaires-tax-2012-7

We think this means that if you make €2 million euros, you would pay 45 percent on the first €1 million and 75 percent of the second €1 million to the government, or a total of €1.2 million.

bolding mine

Odd way to start that sentence.

 

[CAC1001]

Argh! Did I miss something?

I'm in favor of the 75% French tax.

In a world where people can become multi-billionaires, with the flick of an IPO, I think we need some leveling.

How does a tax create any leveling? We get leveling through the product the people provide that makes them a billionaire through said IPO. If you tax it highly, then that money goes to the government, and then to other people who didn't do anything to deserve the money in the form of government social programs. I am fine with safety net programs, but programs based on redistribution of wealth out of some notion of equality of outcome I believe are wrong.

Technology, along with the sheer number of people on this planet, makes it possible for anyone with a $1 idea, to become incredibly wealthy, instantly.

Wish I could think of some of these ideas, although if a $1 idea makes you wealthy, then it's more than a $1 idea!

Also, I don't know if France is very high stability-wise as far as industrialized nations go. This is a country where thousands of cars get burned every year by disaffected youth and where people (youth) rioted over the government wanting to raise the retirement age from I think 60 to 62.

 

[Ryan_m_b]

that money goes to the government, and then to other people who didn't do anything to deserve the money in the form of government social programs.

An obvious point is that governments pay for far more than that like transport infrastructure, education, healthcare, law enforcement, national defence etc. Also it really depends on what you think people should do to "deserve" something. In many societies just being alive grants you access to free healthcare, education, protection under the law etc. If that isn't a social program I don't know what is.

 

[CAC1001]

An obvious point is that governments pay for far more than that like transport infrastructure, education, healthcare, law enforcement, national defence etc. Also it really depends on what you think people should do to "deserve" something. In many societies just being alive grants you access to free healthcare, education, protection under the law etc. If that isn't a social program I don't know what is.

A country like France, which already has higher taxes and miniscule defense spending in comparison to a country like the United States, should already be able to afford things like transport infrastructure, education, healthcare, law enforcement (which is a local government priority unless the French have a nationalized police force), national defense, and so forth. No need for high taxes for purposes of wealth redistribution.

Protection under the law I do not see as a social program, as enforcement of the law is one of the core functions of government (that's one of the reasons you form a government in the first place).