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

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The discussion centers around the implications of high taxation on the wealthy in France, particularly in the context of a proposed millionaire's tax. Participants express a mix of admiration for progressive taxation and skepticism about its effectiveness, noting that high earners might relocate to avoid taxes. Historical references highlight that the U.S. had much higher tax rates in the past without significant migration of wealthy individuals. The conversation shifts to the broader economic implications of taxation, with some arguing that higher taxes can lead to better social welfare systems, while others warn that excessive taxation could stifle innovation and economic growth.There is a debate about the benefits of living in high-tax countries like France, where citizens receive extensive social services, including healthcare and education, in exchange for their taxes. Critics argue that such systems can create dependency on welfare, while supporters emphasize the importance of social equity and the value of contributing to society.
  • #31
The thread went too off topic. Please try to keep posts specifically on the French tax.

Thanks.
 
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  • #32
Evo said:
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.
 
  • #33
nitsuj said:
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.
 
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  • #34
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.
 
  • #35
lisab said:
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. :smile: 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.
 
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  • #36
rootX said:
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
 
  • #37
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.
 
  • #38
nsaspook said:
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.

:-p

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.
 
  • #39
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?
 
  • #40
2AlphaMales?! said:
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.
 
  • #41
OmCheeto said:
Depends...

on how big a house his wife ultimately wants.

:-p

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. :devil:

http://hollywouldink.files.wordpress.com/2012/06/funny-plumber.jpg
 
  • #42
rootX said:
"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.
 
  • #43
nsaspook said:
... Negative feedback reduces gain and happiness. ...

:bugeye:

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

wiki on negative feedback said:
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?
 
  • #44
OmCheeto said:
Negative feedback produces stability.

I heard China is also quite stable. :wink:
 
  • #45
OmCheeto said:
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/
 
  • #46
2AlphaMales?! said:
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.
 
  • #47
JonDE said:
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.
 
  • #48
OmCheeto said:
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.
 
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  • #49
CAC1001 said:
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.
 
  • #50
Ryan_m_b said:
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).
 
  • #51
CAC1001 said:
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.
It's not really a question of need but one of values. We've already touched upon the discussion somewhat in this thread: the question of what constitutes a fair wage and the extent to which high earners become rich off of other's labour.
CAC1001 said:
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).
Then we have very different understandings of the term. To me a social program is a policy designed to improve a specific facet of life for the collective (i.e. society) as a whole.
 
  • #52
Ryan_m_b said:
It's not really a question of need but one of values. We've already touched upon the discussion somewhat in this thread: the question of what constitutes a fair wage and the extent to which high earners become rich off of other's labour.

I don't believe in any such thing as a "fair" wage. "Fair" is one of those arbitrary terms meant to stir up emotions in people but can have numerous different meanings. Wages are determined by market forces in a free economy. I also do not see it that high earners become rich off of other's labor. High earners become rich off of their own labor, which the market prices and for which they are paid a corresponding amount.

Then we have very different understandings of the term. To me a social program is a policy designed to improve a specific facet of life for the collective (i.e. society) as a whole.

To me a social program is an actual government program that is meant to try and do what you describe, but that is different from the core functions of the government. A society cannot function without a government or law enforcement from said government. Core functions of government are things like rule of law, protection of private property, protection of human rights, etc...these aren't social programs. Social programs are the additional things created.
 
  • #53
CAC1001 said:
I don't believe in any such thing as a "fair" wage. "Fair" is one of those arbitrary terms meant to stir up emotions in people but can have numerous different meanings. Wages are determined by market forces in a free economy. I also do not see it that high earners become rich off of other's labor. High earners become rich off of their own labor, which the market prices and for which they are paid a corresponding amount.
*shrug. Definiting market forces as fair is certainly one position but not the only significant one.
CAC1001 said:
To me a social program is an actual government program that is meant to try and do what you describe, but that is different from the core functions of the government. A society cannot function without a government or law enforcement from said government. Core functions of government are things like rule of law, protection of private property, protection of human rights, etc...these aren't social programs. Social programs are the additional things created.
Like I said, we clearly have different ideas over what social means and the role of government.
 
  • #54
It's actually been shown, thoroughly, on a large dataset, that income inequality is one of the biggest factors of social unrest:

Richard Wilkinson:



The only way the other viewpoint gains popularity is through propaganda, lobbying, and super-PACs. Not to mention, MAJOR conflicts of interest (US economic advisors having their fingers in profits from too-big-to-fail economic giants)...

From there, it's fairly straightforward to read between the lines.
 
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  • #55
Ryan_m_b said:
*shrug. Definiting market forces as fair is certainly one position but not the only significant one.

I don't think market forces are "fair," as I don't really think the word holds. In a free market, you get paid according to how society values what you produce. Now this isn't to say that we can't have some social programs/safety nets in place to provide for basic things like healthcare, income, food, etc...for a person who ends up out of work temporarily and unable to produce anything. But no one should think they are entitled to higher pay if society doesn't value whatever they produce all that much.

Going back to the French tax, as such I see any tax meant for pure redistribution purposes (i.e. someone thinks it's "not fair" for some to make lots of money) as wrong. In a free economy, no one can make lots of money unless they are providing something that the public wants and voluntarily chooses to buy.
 
  • #56
Pythagorean said:
It's actually been shown, thoroughly, on a large dataset, that income inequality is one of the biggest factors of social unrest:

I don't think that holds water. The United States has some of the highest income inequality and among the least social unrest of all the industrialized countries. Income inequality is just another term used to stir up emotional passions in people but that has little ties to reality.

The only way the other viewpoint gains popularity is through propaganda, lobbying, and super-PACs. Not to mention, MAJOR conflicts of interest (US economic advisors having their fingers in profits from too-big-to-fail economic giants)...

From there, it's fairly straightforward to read between the lines.

IMO, income inequality is a meaningless statistic. It has no relation to the actual standard of living of the population, the actual wealth (goods and services) they enjoy. Remember, income doesn't exist in some pre-set fixed pie that must be divided up among society, it is just what people receive in exchange for whatever they produce. And society isn't separated into fixed classes.

I think people confuse income inequality with standard-of-living inequality. If one small 1% of society is living large while the other 99% is living mired in total abject poverty, and to top it off, that 1% is living off the backs of the 99%, then yes, social unrest, maybe even revolution, can occur. But that isn't the situation we have with modern market capitalism.
 
  • #58
Ryan_m_b said:
I disagree: they're useful but only amongst those with similar values.
So...if people already agree they will agree on why they agree? That doesn't strike me as being very useful. If there is nothing objective that can bridge a gap in opinion, then all of thus is just pure opinion.

I do think trying to bring as much objective fact into a discussion as this is important, but as we saw above, much of what is available and popular/publicized isn't necessarily of good quality.
With relevance to this thread I have no real idea who you mean when you say "left".
I find that very hard to believe, but I'll try to clarify:

On the far right side of the typical economic spectrum is unfettered capitalism. On the far left side is pure government ownership (socialism). The middle can be tough to define (by country, internationally, attempted statistical measurement) but at the very least we can say for certain that someone who favors a policy that would move the laws of a country to the left is left of that country's center on that particular issue. Someone who doesn't favor that policy could be right leaning, centrist or slightly left (less left than the policy) -- but my statement wasn't about them.
 
  • #59
2AlphaMales?! said:
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?
I don't know about 500 years from now, but a couple of points:

1. If a country is growing, it requires economic growth (absolute) in order to maintain a constant standard of living (per capita).
2. Unless everyone lives in extraordinary luxury, a continuous increase will be desirable.
...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.
Huh? France is most certainly not a post-scarcity utopia. Maybe with 500 years more economic growth it'll get there, but for today, it isn't anywhere close.
 
  • #60
Ryan_m_b said:
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.
Yes, and the basic difference between a capitalist and a socialist (yes, again I know it is simplistic to cut the spectrum in half -- that doesn't make it inaccurate or non-instructive) is that a socialist doesn't think that just giving a person all those things just because they are alive will have any effect on their productivity while a capitalist does. Frankly, while I think the evidence on that isn't that great, the few test cases we do have show that the capitalist side has more evidence. See, for example: The USSR (strongly socialist, poor productivity, collapsed) and China (increase in capitalism = decrease in poverty).

The other flaw isn't per se a socialist one, it is more of an age of voter/shortsighted one: people can vote themselves more benefits and vote themselves lower taxes (better yet: vote others higher taxes at the same time!) which can lead to fiscal problems such as the ones Europe is seeing now -- and the US is following.
We've already touched upon the discussion somewhat in this thread: the question of what constitutes a fair wage and the extent to which high earners become rich off of other's labour.
Ouch, really? No one said any such thing earlier in the thread. Before it was about fair pay for the labor the rich do. Now you're saying the rich primarily just get that way by leeching off of the labor of others. That's frankly pretty insulting to people who have done very positive things to get rich.
 

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