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

[mheslep]

I suspect back then the high rates were avoided largely by legally sheltering income, not so much by cheating. In any case the actual http://www.heritage.org/federalbudget/charts/2012/current-tax-receipts-680.jpg[ has not varied much than +/- 5% since WWII, regardless of tax rate.

 

[nitsuj]

Fair enough, though that last part implies that you think wealth is a zero sum game - that if one person increases their wealth, another must inevitably lose some. That's clearly not the case, otherwise the average wealth and standard of living would not be increasing.

[edit: Oops - as kiwikid pointed out already...]

Zero sum, no as you pointed out...clearly not. Poor people aren't just handing over their money to rich people. We are clearly talking "margins" of winning/losing.

Perhaps poor people need to spend more money on gold or oil futures. Maybe too much of their total income goes to the "consumed" goods and services of "basic" standard of living needs.

Consumers consume their assets , rich people "grow" their assets.

the vast majority of my income is "consumed" (rent/food/utilities/ect said different my money mostly goes to services).

I need to put more monies into the "game" & less on my basic standard of living needs in the form of "services". Oh a house! that's a start! Ah shoot most of my money goes to...do I need to carry on with this subtle point??

 

[Oltz]

Zero sum, no as you pointed out...clearly not. Poor people aren't just handing over their money to rich people. We are clearly talking "margins" of winning/losing.

Perhaps poor people need to spend more money on gold or oil futures. Maybe too much of their total income goes to the "consumed" goods and services of "basic" standard of living needs.

Consumers consume their assets , rich people "grow" their assets.

the vast majority of my income is "consumed" (rent/food/utilities/ect said different my money mostly goes to services).

I need to put more monies into the "game" & less on my basic standard of living needs in the form of "services". Oh a house! that's a start! Ah shoot most of my money goes to...do I need to carry on with this subtle point??

I think you may be missing the subtle point the rich still do not get rich off the poor. Money is not the only asset in play you can grow your assets by gaining skills/knowledge/experience and making wise choices that is how you earn more to better leverage yourself.

The poor are not the losers in the market. The losers are those who make poor choices like investing in long shot schemes and loose everything. Anyone who is simply working every day and spends every dollar they make is not a looser they are simply not taking any risk to win they are playing the safe route. Some would call them winners if they manage to live a happy and comfortable life.

If you choose to do drugs and not work that is a choice. Not a looser in capitalism.

if you choose to invest all of your money in a get rich quick IPO and loose it all another choice. Lost but can always work hard and try again.

if you choose to work for a moderate wage and never try to gain skills that would get you promoted or put into a different salary class that is still a choice.

Only the one who took a risk is a looser in capitalism the others chose not to take advantage of the opportunity present in our society.

Blaming the rich for our consumerism is a fallacy sure we would all be rich if there was nothing nice to have that we all wanted to spend our money on.

Making the tax rate 75% on high earners will have no good effects at all in France other then making the miserable feel better about themselves for a few minutes.

 

[Oltz]

One thing that I always attribute, at least in part, to the decrease of American tax rates: increased working base. I haven't found any consolodated numbers for this, but women are much more prevelent in the workforce (and in higher paying jobs) than before. We're in a much more urbanized society as well, which means less people are 'working for themselves' out in the country. The amount contributed via taxes per household hasn't really changed all that much (relatively speaking) it's just that American households are now making much more (with 2 incomes, generally) than they did in 40s and 50s.

So for those that want the 70%+ top tax rates (or higher taxes in general) - why do we need higher taxes with more people working? With higher through put wouldn't we need less taxes by percentage? (since we have higher absolute earnings) This is something that I think is forgotten/lost in may tax-rate debates.

Finally, again, how many people were affected by these top tax rates? I'd imagine that very very few actually hit those high marginal rates (and thus very little revenue was actually gained - it was more of a punitive activity than anything substantive for the government coffers).

I think the evidence of major avoidance of taxes is the fact that when tax rates were dramatically reduced tax revenue grew. As per the chart I posted earlier and will re post now. Keep in mind this is Per Capita 2005 dollars so normalized for population growth and inflation. Focus on the mid 60's

http://www.usgovernmentrevenue.com/revenue_chart_1950_2011USd_13s1li0181068_629cs_10f

 

[nitsuj]

I think you may be missing the subtle point the rich still do not get rich off the poor. Money is not the only asset in play you can grow your assets by gaining skills/knowledge/experience and making wise choices that is how you earn more to better leverage yourself.

The poor are not the losers in the market. The losers are those who make poor choices like investing in long shot schemes and loose everything. Anyone who is simply working every day and spends every dollar they make is not a looser they are simply not taking any risk to win they are playing the safe route. Some would call them winners if they manage to live a happy and comfortable life.

If you choose to do drugs and not work that is a choice. Not a looser in capitalism.

if you choose to invest all of your money in a get rich quick IPO and loose it all another choice. Lost but can always work hard and try again.

if you choose to work for a moderate wage and never try to gain skills that would get you promoted or put into a different salary class that is still a choice.

Only the one who took a risk is a looser in capitalism the others chose not to take advantage of the opportunity present in our society.

Blaming the rich for our consumerism is a fallacy sure we would all be rich if there was nothing nice to have that we all wanted to spend our money on.

Making the tax rate 75% on high earners will have no good effects at all in France other then making the miserable feel better about themselves for a few minutes.

What?

Oh and
if you choose to work for a moderate wage and never try to gain skills that would get you promoted or put into a different salary class that is still a choice. is a bunch of nonsense. It's not even remotely so simple. Kinda like, rich getting rich off of poor people/

Let me put in a way that leaves "people" out of the comment. Having more money & time than daily living expenses requires leaves resources for earning more money. Seems exponential in some way no? Having little to nothing grows into little or nothing, certainly not the path to becoming rich.

 

[skippy1729]

It's just the same old progressive trick. After 10 years or so of inflation, every Tom, Dick and Harry will be making a million Euros.

 

[Oltz]

What?

Oh and
if you choose to work for a moderate wage and never try to gain skills that would get you promoted or put into a different salary class that is still a choice. is a bunch of nonsense. It's not even remotely so simple. Kinda like, rich getting rich off of poor people/

Let me put in a way that leaves "people" out of the comment. Having more money & time than daily living expenses requires leaves resources for earning more money. Seems exponential in some way no? Having little to nothing grows into little or nothing, certainly not the path to becoming rich.

You do understand that Having "spare" money and time is a product of choices? Buy a used car instead of new, don't have children until you can afford them, buy a fixer upper and do the work yourself instead of throwing money away each month on rent, eat in instead of out and you will find you can afford grad school and all of a sudden you are making more money.

Buy things you can afford up front or only if there is a "no interest" option and pay it off before you pay more then the sale price. or don't buy it.

These are all choices I made that were different from my peers and guess what they are still living the same life 5 years later struggling to pay for that car they needed to have new and living week to week going out and having fun but not making progress. I still drive a crappy car but my wife has a new car and we have a new baby and a new house its been a good year we still get to put a little more away each month.

This is not the systems fault its a choice. Anybody can make sacrifices there is always more time and money available you just need to make the choice to use it to improve your chances.

 

[nsaspook]

http://www.telegraph.co.uk/news/wor...oposed-tax-hikes-spark-exodus-of-wealthy.html

"If the French go ahead with a 75 per cent top rate of tax we will roll out the red carpet and welcome more French businesses to Britain and they can pay tax in Britain and pay for our health service and schools and everything else."

Was this the desired effect of the tax hike?

 

[OmCheeto]

http://www.telegraph.co.uk/news/wor...oposed-tax-hikes-spark-exodus-of-wealthy.html

If the French go ahead with a 75 per cent top rate of tax we will roll out the red carpet and welcome more French businesses to Britain and they can pay tax in Britain and pay for our health service and schools and everything else.

Was this the desired effect of the tax hike?

Another Telegraph article seems to paint a different picture:

Five years after Sarkozy’s plea, the number of French living in the UK has ballooned from 300,000 to 400,000.

This means annually, over the last 5 years, 20,000 French have been moving to England for other reasons.

hmmm... What's this?

But it’s not just Britain’s favourable tax rate (50 per cent on income over £150,000, dropping to 45 per cent next April) that lures the French.

Frances top marginal rate was 41% for those 5 years. Why would rich people move to a country where the tax rate was 9% higher?

owner of delicatessen L’Eau à la Bouche in Hackney, east London.

London has more employment opportunities than Paris and is seen as the place where everything happens. Eighteen years ago, I came over on a night bus with nothing but a rucksack. Now I have my own business – that would not have been possible in France. Whatever happens tomorrow, the French will keep coming to London because we love it. We feel at home here.

18 years ago? hmmm...

Some people will move for business opportunities, and some people will not move because the taxes are too high:

(ref)
When he’s asked what it was like to have his townhouse picketed[by occupy wall streeters]

I think it’s somewhat misguided. We pay a lot of taxes, especially living in New York—there’s an almost 13 percent city and state tax rate. … Most jurisdictions would want to have successful companies like ours located there. I’m sure if we wanted to go to Singapore, they’d roll out the red carpet to attract us. We choose to stay here and then, you know, get yelled at. I think that’s misdirecting their anger at the wrong place.

hmmm... There's that "red carpet" comment again.

Sooner or later, the nations of the world are going to run out of these "red carpets", and will have to think about taxing people at rates which keep everyone at least semi-happy. God knows, you don't want to piss off the peasants. And this is France we are talking about here. They've got some historically mean peasants.

 

[Pythagorean]

I find this relevant. Average Canadian citizen is now richer than the average USAmerican:

http://newsfeed.time.com/2012/07/17/the-average-canadian-is-now-richer-than-the-average-american/

Hrm, ever since we started deregulating the financial sector and implementing bush tax cuts...

 

[mheslep]

I find this relevant. Average Canadian citizen is now richer than the average USAmerican:

http://newsfeed.time.com/2012/07/17/the-average-canadian-is-now-richer-than-the-average-american/

Hrm, ever since we started deregulating the financial sector and implementing bush tax cuts...

Taxes:
Canada
Business: 11%/15% (federal); Individual:0–29% (federal), 4-24% (provincial)
US
Business: 0–38% (federal), 0–12% (states); Individual: 0–35% (federal), 0–11% (states)

2010 Deficit, % GDP:
Canada 2%
US 10% ($1.3 trillion)

2010 Debt, % GDP
Canada: 53%
US: 76%

Banking Sector Government Sponsored Enterprises (GSE):
US: Fannie Mae, Freddie Mac, others
Canada: None

Energy:
Alberta Oil Sands Production 2011, Canada: 1.6 million barrels per day


http://en.wikipedia.org/wiki/List_of_countries_by_tax_rates

 

[jim hardy]

People rant about the "Reagan tax cuts"

but i distinctly remember him saying in a speech, to effect "Money made by money is not going to be taxed lower than money made by work".
Then he raised capital gains rate to same as ordinary income.

Being a working class fellow myself i rather liked him for that.

But i think it only lasted a while
http://thinkprogress.org/economy/2012/01/20/408345/reagan-raised-capital-gains-taxes/?mobile=nc

For two years, thanks to Republican icon Ronald Reagan, capital gains and earned income were treated equally:


For most of the history of income taxes in America, long-term capital gains — defined at different times as investments held for minimum periods of as little as six months and as long as 10 years — have been taxed at substantially lower rates than top ordinary income tax rates.

There was, in fact, only one time that capital gains were taxed at the same rates that were paid by people who earned their money by working. That was during the years 1988 to 1990, as a result of the Tax Reform Act of 1986 — a law championed by President Ronald Reagan.

 

[rootX]

I find this relevant. Average Canadian citizen is now richer than the average USAmerican:

http://newsfeed.time.com/2012/07/17/the-average-canadian-is-now-richer-than-the-average-american/

Hrm, ever since we started deregulating the financial sector and implementing bush tax cuts...

It only looks at the average.

 

[Windowmaker]

If Obama gets re-elected we are on a one way trip to becoming Greece. Our tax revenue has been roughly the same adjusted for inflation +/- 5 percent since WW2 but our debt continues to grow. We have a spending problem and its out of control. America wasn't conceived as a welfare or nanny state but the country that says if you pull yourself up by your boot straps you will make in the crazy world.

http://www.finance.senate.gov/newsroom/ranking/release/?id=47ada91c-07ac-4c7f-bc20-182df03d2654

Bed rest is classified as work for welfare recipients for pete's sake.

 

[Pythagorean]

Taxes:
Canada
Business: 11%/15% (federal); Individual:0–29% (federal), 4-24% (provincial)
US
Business: 0–38% (federal), 0–12% (states); Individual: 0–35% (federal), 0–11% (states)

2010 Deficit, % GDP:
Canada 2%
US 10% ($1.3 trillion)

2010 Debt, % GDP
Canada: 53%
US: 76%

Banking Sector Government Sponsored Enterprises (GSE):
US: Fannie Mae, Freddie Mac, others
Canada: None

Energy:
Alberta Oil Sands Production 2011, Canada: 1.6 million barrels per dayhttp://en.wikipedia.org/wiki/List_of_countries_by_tax_rates

That's fair.

Canada doesn't wage wars and hold military outposts worldwide, which is our 2nd biggest federal expense in the US. (next to Social Security and unemployment/welfare...).

Also, Canada's provincial taxes can be higher, which is for the same kind of programs the feds do int he US (social/welfare). They seem to do it more effectively... maybe.. maybe the spending on military really does hurt us:

But we had the unfortunate outcome of government-backed banks that further conflates things. Financial sector should be regulated... not self-regulated...

 

[nsaspook]

Another Telegraph article seems to paint a different picture:

It looks like the Socialist rich 'Gauche Caviar' bailed on France before the Capitalist rich did.

 

[Windowmaker]

Military spending isn't something you can just cut though. It's a form of demand generating enterprise. The service members tend to spend everything they make. ( I know I was in the Army for four years.) The contracts employ companies like General Dynamics and Lockheed Martin. The military is needed for our national security due to the North Korea and Iran threats out there. Social security wasn't intended to be a stable income for the elderly, which is has become today.

 

[Pythagorean]

I understand that military is entwined in spending now, no matter what. I didn't mean to imply that it should be cut. Just pointing out the caveat for comparisons of the different spending philosophies. In some sense, somebody could even argue we're doing Canada's military work for them...

Here's frances (I don't speak french, but it looks like a lot of education):

 

[Windowmaker]

Well if we compare how a country allocates it's resources we can compare America to France. Economics is all about allocation of resources and whoever does the best job normally has the best economy. Even though our GDP growth is weak, we still have the most largest GDP in the world. So apparently we are allocating our resources fine. We have 6 of the top 10 universities in the world..

Source :http://www.usnews.com/education/worlds-best-universities-rankings/top-400-universities-in-the-world

With all that spending on education, 25 percent of GDP, doesn't have much a higher rank on the USA. France is ranked 20th and the USA is ranked 21st. So at 3 percent, we allocate our resources better. It might change if we actually compare dollar amounts per student per country, which I haven't done.

Source: http://nexuscanada.blogspot.com/2010/12/top-10-countries-has-best-education_30.html

So we have the best Higher learning system in the world but the 21st best school system.

 

[mege]

If the US cut its military, other countries would have to catch up the slack.


Irony in the military spending arguement: the US, being the richest country in the world, is providing extra services to the rest of the allies. Isn't that redistribution of wealth on an international scale? How's that working out for the US in the long-run? (this is also the case when it comes to nearly any international organization that the US is a member of as well: UN, NATO primarilly)

 

[Bacle2]

Well if we compare how a country allocates it's resources we can compare America to France. Economics is all about allocation of resources and whoever does the best job normally has the best economy. Even though our GDP growth is weak, we still have the most largest GDP in the world. So apparently we are allocating our resources fine. We have 6 of the top 10 universities in the world..

Source :http://www.usnews.com/education/worlds-best-universities-rankings/top-400-universities-in-the-world

With all that spending on education, 25 percent of GDP, doesn't have much a higher rank on the USA. France is ranked 20th and the USA is ranked 21st. So at 3 percent, we allocate our resources better. It might change if we actually compare dollar amounts per student per country, which I haven't done.

Source: http://nexuscanada.blogspot.com/2010/12/top-10-countries-has-best-education_30.html

So we have the best Higher learning system in the world but the 21st best school system.

Phew, I misread your name and I first thought it was "Widowmaker", so I was afraid of disagreeing with you :) .

Still, re the Higher Learning System being the best . First, I assume the ranking is among some 30-or-so 1st-world/rich countries, not worldwide. Secondly, I think that gap between 1st and 21st may be resolved by the fact that a good chunk of the people in universities , specially at the grad. level are foreigners, or at least foreign-born (meaning foreign-educated). If my experience is representative in any way, this seems to be the case outside of MBA's and general business degrees, i.e., with Math, Science degrees. I don't see how someone with a mediocre high school education can suddenly rise to a top-of-the-world level when attending University.

Something else to think about is the (alleged) correlation between income and happyness, which says that the increase of happyness with income shows a diminishing return beyond around $75,000:

http://blogs.wsj.com/wealth/2010/09/07/the-perfect-salary-for-happiness-75000-a-year/

I selected this link, since it is from the WSJ, not likely to have been written by a socialist , nor by "some sort of hippie".

 

[phyzguy]

If the US cut its military, other countries would have to catch up the slack.

Irony in the military spending arguement: the US, being the richest country in the world, is providing extra services to the rest of the allies. Isn't that redistribution of wealth on an international scale? How's that working out for the US in the long-run? (this is also the case when it comes to nearly any international organization that the US is a member of as well: UN, NATO primarilly)

You imply that this money needs to be spent! What if we(and everybody else) had simply not spent the trillion dollars we have spent in Iraq and Afghanistan? Would the world really be a very different place? I think the answer is no. Most of that money was simply wasted. If we had spent that money on alternative energy here in the US, we would be energy independent today. That would make a difference.

 

[Windowmaker]

I believe both lists are in fact worldwide.

Foreigners being in the marketplace of Academia has more to do with "free market" capitalism than anything else. If their home countries had pristine universities, they would just stay there. They're great high schools in America, such as prep/charter schools that aren't considered in the American school system because they aren't government funding. I would like to see how private American schools compare to European public schools.

The income point is is interesting and is true to the fact that money doesn't buy happiness.

 

[Windowmaker]

You imply that this money needs to be spent! What if we(and everybody else) had simply not spent the trillion dollars we have spent in Iraq and Afghanistan? Would the world really be a very different place? I think the answer is no. Most of that money was simply wasted. If we had spent that money on alternative energy here in the US, we would be energy independent today. That would make a difference.

Like the half billion we wasted on sylandra? Or the countless others? Alternative Energy isn't as useful as it seems. It is the way of the future but in the far distant future. When you throw money at a problem, it doesn't fix it.

 

[Evo]

Please take time to reread the rules.

No opinions stated as fact.

No "facts" stated without proper citations.

Remain on topic. This is not about the US.

Any rules broken from this point forward will receive infractions

 

[Evo]

Since I cannot bring this thread back on topic, it's closed.



Update: French panel overturns 75 percent tax on ultrarich
http://news.yahoo.com/french-panel-overturns-75-percent-tax-ultrarich-104117363--finance.html