The Daily Telegraph’s Thomas Pascoe takes a look at what France’s new president has been up to:
…Mr Hollande’s attempts to rectify the French [debt etc. ] problem have so far involved the following:
Lowering the pension age from 62 to 60 [to be fair, only in certain cases].
Increasing the minimum wage above inflation (albeit not much above inflation).
Demanding that the EU take even more money from the national governments than was planned, violating a prior agreement and potentially adding £3bn to Britain’s annual tribute.
Introducing a top rate of income tax at 75pc for those earning €1m or more – a move which gives a marginal rate of tax of 90.5pct on certain types of income.
Introducing a tax on anyone owning assets in France but living abroad which will see 15.5pc of the rent or capital gain on property transferred to the state.
Introducing a one off wealth tax at double the rate which had been previously trailed.
These reforms may have had some chance of working in the 1960s, when there were sufficient exchange rate and immigration controls in Europe to prevent the mass exodus of people and capital overseas. They have not the slightest prospect of working now.
Britain discovered, when it raised taxes on what it termed the ‘super-rich’, that these do not raise any additional income. The very wealthy now are too footloose to submit to any taxation regime they decide in iniquitous. Those who get hammered tend to be the mid-level operatives nearing the end of their career. The really big catch often gets away.
Yup. And that’s almost always the way.
And another thing: those cheering the prospect of higher taxation on “the one percent” over here will soon discover that there is the traditional “mathematical” one percent and then there is the infinitely more expansive “one percent” as calculated by governments on the grab. The Buffetts of this world will, of course, do very well out of that. A few percentage points of their own net worth is a small price to pay for keeping everyone else down – which is, of course, a partial explanation of why so many super-rich liberals vote the way they do. They are smart enough to understand that, to no small extent, wealth is a relative thing.
As for France, the best guess must be that Hollande will drive it into the ground.