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

  1. Jul 3, 2012 #1
  2. jcsd
  3. Jul 3, 2012 #2

    Ryan_m_b

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    I do have a hope that social democracy will increase across Europe, preferably adopting something similar to the Nordic Models.
     
  4. Jul 3, 2012 #3
    Isn't that a bit high? Most of the wealthy people will just move.
     
  5. Jul 3, 2012 #4

    phyzguy

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    The top income tax in the US was 70% until the early 1980's, and was even higher in the 1950s and 1960s.
     
  6. Jul 3, 2012 #5
    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.
     
  7. Jul 3, 2012 #6

    Ryan_m_b

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    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.
     
  8. Jul 3, 2012 #7
    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.
     
    Last edited: Jul 3, 2012
  9. Jul 4, 2012 #8
    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....
     
  10. Jul 4, 2012 #9
    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.
     
  11. Jul 4, 2012 #10
    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 - 50k


    All 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.
     
  12. Jul 4, 2012 #11
    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...).
     
  13. Jul 4, 2012 #12

    phyzguy

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    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.
     
  14. Jul 5, 2012 #13
    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.
     
  15. Jul 6, 2012 #14
    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.
     
  16. Jul 6, 2012 #15

    Ryan_m_b

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    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.
    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.
     
  17. Jul 6, 2012 #16

    AlephZero

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    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.
     
  18. Jul 6, 2012 #17

    russ_watters

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    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.
     
  19. Jul 6, 2012 #18

    Ryan_m_b

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    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 in to much "he said she said" arguments.
     
  20. Jul 6, 2012 #19

    OmCheeto

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    3000 out of 65,000,000?

    hmmm....

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

    Nooooooooo!
     
  21. Jul 6, 2012 #20

    lisab

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    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.
     
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