France Just Quietly Killed Its Failed 75% Supertax

[nuckin_futz]

France Just Quietly Killed Its Failed 75% Supertax

The eye-catching and eye-watering 75% payroll tax rate in France was quietly killed off by the government Thursday after failing to raise significant revenue. The tax was also accused of driving high earners away from France.

The tax raised only €420 million ($505.8 million) in 2013 and 2014 combined, less than 0.5% of France's budget deficit. It expires at the end of this month and will not be renewed, as the government tries to take a more business-friendly approach.

Earlier in 2014, President Francois Hollande, who made the 75% rate a key plank of his election in 2012, reshuffled his cabinet as part of a pro-business drive. He brought in Emmanuel Macron, a former Rothschild investment banker, as economy minister.

Macron referred to France's top tax rate as "Cuba without the sun." He replaced socialist firebrand Arnaud Montebourg, who had become increasingly critical of the French government's inability to revive growth.

Things are still looking pretty bleak for the French economy. France's major statistical agency expects growth of just 0.3% in the first half of the new year, an extremely sluggish pace.

Such slow growth means that extremely high unemployment levels are unlikely to be reduced anytime soon. France's jobless rate climbed back to 10.4% in the latest figures, wiping out a year's worth of modest progress in reducing the number.

Read more: http://www.businessinsider.com/france-ended-75-super-tax-2015-1#ixzz3NgwYyhSm

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Seriously how big a dumb ass is this guy? Every business leader in France and the EU told him this would fail. How did he not see this coming?

Blows my mind that someone this daft is in charge of a nation.

[nucklehead]

More insane is that he thinks that suffling the deck will solve anything. Same lunatic in charge...doesn't beget confidence.

[taxi]

Seriously how big a dumb ass is this guy? Every business leader in France and the EU told him this would fail. How did he not see this coming?

Blows my mind that someone this daft is in charge of a nation.

Ummm.. have you read half the threads on this forum. There are obviously a ton of people who think that ultra socialist theoretical policies will work, despite the fact they've been tried over and over and never work.

You simply cannot make it undesirable to work and expect an economy to work. Overtaxing high earners or giving too high of a guaranteed income never work.

Why did France try this... Again.... Votes. It's simple, give the general populace the illusion that you've come up with some brilliant new scheme that will only hurt people who aren't them and you win an election.

[kyledude]

Uh oh, the hippie communists here aren't going to like this...

[D-Money]

Most truly wealthy people get little of their income via payroll.

The best idea for a new tax I've heard is a proposal to tax public stock purchases. The actual percentage was extremely low, but enough to scare off speculators who rapidly buy and sell stocks. Such a tax would raise a lot of money directly from those who can most afford it, and greatly reduce volatility in the market.

Suffice to say, the bigwigs would have none of that...

[nuckin_futz]

Why did France try this... Again.... Votes. It's simple, give the general populace the illusion that you've come up with some brilliant new scheme that will only hurt people who aren't them and you win an election.

So basically, people are very gullible/stupid and will believe anything they are told. Nothing new here.

[nuckin_futz]

Most truly wealthy people get little of their income via payroll.

The best idea for a new tax I've heard is a proposal to tax public stock purchases. The actual percentage was extremely low, but enough to scare off speculators who rapidly buy and sell stocks. Such a tax would raise a lot of money directly from those who can most afford it, and greatly reduce volatility in the market.

Suffice to say, the bigwigs would have none of that...

This is the best idea you've heard, really????

First of all "speculators" play a vital role in financial markets. Without them they would be a massive lack of liquidity.

Liquidity is far and away the most important thing to any market.

This exact idea of a tax has been tried in Sweden from 1984-1991 with disastrous results. ...........

Market reaction

Even though the tax on fixed-income securities was much lower than that on equities, the impact on market trading was much more dramatic. During the first week of the tax, the volume of bond trading fell by 85%, even though the tax rate on five-year bonds was only 0.003%. The volume of futures trading fell by 98% and the options trading market disappeared. 60% of the trading volume of the eleven most actively traded Swedish share classes moved to the UK after the announcement in 1986 that the tax rate would double. 30% of all Swedish equity trading moved offshore. By 1990, more than 50% of all Swedish trading had moved to London. Foreign investors reacted to the tax by moving their trading offshore while domestic investors reacted by reducing the number of their equity trades.

Revenues

As a result, revenues from these taxes were disappointing. For example, revenues from the tax on fixed-income securities were initially expected to amount to 1,500 million Swedish kronor per year. They did not amount to more than 80 million Swedish kronor in any year and the average was closer to 50 million. In addition, as taxable trading volumes fell, so did revenues from capital gains taxes, entirely offsetting revenues from the equity transactions tax that had grown to 4,000 million Swedish kronor by 1988.

Implementing this would guarantee wider spreads and way less liquidity which would result in more volatility not less.

There's a reason why US Congressman Peter DeFazio's (yes he's a Democrat) bill proposing this tax that he peddles every year since 2009 fails. That's because anyone with any know how of financial markets can tell it's the equivalent of fishing with dynamite.

[taxi]

Most truly wealthy people get little of their income via payroll.

The best idea for a new tax I've heard is a proposal to tax public stock purchases. The actual percentage was extremely low, but enough to scare off speculators who rapidly buy and sell stocks. Such a tax would raise a lot of money directly from those who can most afford it, and greatly reduce volatility in the market.

Suffice to say, the bigwigs would have none of that...

Not sure where you get this idea that only the uber rich invest. Most working people I know have RRSP accounts filled with stocks and mutual funds. The uber rich tend to own their own companies, which they've inherited. They don't make that much money investing in other people's companies.

Most of the "speculators" you're talking about are actually fund managers, which means they are using the money of the people who invest into the mutual funds. Increased taxes won't result in them making less commission. Speculators come in all sizes, but it's the ones managing billions of other people's money that really have the power.

Canada really needs to find ways to make things easier for the working middle class. They don't need to be further burdened with tax grabs.

[BabychStache]

Want to make things easier for the middle class? Reduce income tax and increase sales tax. Give people the opportunity to save and invest.

Probably won't work though as people's spending follows income.

[taxi]

Want to make things easier for the middle class? Reduce income tax and increase sales tax. Give people the opportunity to save and invest.

Probably won't work though as people's spending follows income.

I think that's a great idea. Especially in BC where so many people under report their income and earn income abroad.

[Miss Korea Bob.Loblaw]

Ummm.. have you read half the threads on this forum. There are obviously a ton of people who think that ultra socialist theoretical policies will work, despite the fact they've been tried over and over and never work.

You simply cannot make it undesirable to work and expect an economy to work. Overtaxing high earners or giving too high of a guaranteed income never work.

Why did France try this... Again.... Votes. It's simple, give the general populace the illusion that you've come up with some brilliant new scheme that will only hurt people who aren't them and you win an election.

They wanted Sarkozy out. They HATED him.

[William_Clarkson]

75%, WTF?

[Armada]

Communism > french people

[Lancaster]

Social programs, government sponsored entities and everything socialistic is fine and dandy.... but it just needs to be applied in a fiscally financial manner. A concept politicians and bureaucrats forgets and/or ignore to protect themselves.

The French has been running a budget deficit for like 30+ years now and are slowly becoming another EU state that will need funding from the Germans.

[Bocivus]

Uh oh, the hippie communists here aren't going to like this...

[aeromotacanucks]

Social programs, government sponsored entities and everything socialistic is fine and dandy.... but it just needs to be applied in a fiscally financial manner. A concept politicians and bureaucrats forgets and/or ignore to protect themselves.

The French has been running a budget deficit for like 30+ years now and are slowly becoming another EU state that will need funding from the Germans.

wierd how the world spin aroung eh?

Germany had 2 wars trying to conquer France. lost twice. and now by economy power Germany will finally win this. The European union should be called "Germany-England Union" since only these 2 countries are well and helping the entire Europe...

[taxi]

wierd how the world spin aroung eh?

Germany had 2 wars trying to conquer France. lost twice. and now by economy power Germany will finally win this. The European union should be called "Germany-England Union" since only these 2 countries are well and helping the entire Europe...

Not true. There are several Scandinavian and Eastern European countries doing great right now. The UK is only so so.

France is in trouble and Greece and Spain are royally f-ed.

[William_Clarkson]

Not true. There are several Scandinavian and Eastern European countries doing great right now. The UK is only so so.

France is in trouble and Greece and Spain are royally f-ed.

The Germans and to the less degree the British are the ones who have to pay up though for the other countries' mistakes, which was his main point.

Despite this, however, Germany doesn't give that much per capita, it's just they are the largest country in the EU and they have the biggest economy in it.

Really though, I don't know a whole lot about the EU, but what benefit does Germany really get from it? Other than free trade obviously.

[RUPERTKBD]

Want to make things easier for the middle class? Reduce income tax and increase sales tax. Give people the opportunity to save and invest.

Probably won't work though as people's spending follows income.

Unfortunately, I think this is probably true. People with more discretionary income in their pockets will likely use it to by more toys, like big screen TVs, boats and trailers, etc., instead of investing in things like stocks and RRSPs.

However, more consumer spending is good for the economy and at least this way, you are allowing the consumer to make his or her own decision.

[DonLever]

Its a matter of numbers, as there are not many "Super Rich". I don't know the cutoff to qualify for the super tax but the small numbers likely did not raise much additional revenue. If they want to raise a huge amount of tax revenue they would have to tax the largest segment of the population - The Middle Class.

Of course it is political suicide to tax the middle class since that is where most of the votes are. The rich are easy targets since they form a small proportion of the population.