France’s new, but Neanderthal, President Hollande wants his citizens (and that’s clearly how he sees them, as serfs) to know that they should not dream too high.
The FT has a report on the top marginal rate of income tax that Hollande is looking to introduce next year (on incomes above €1 million):
The chief finance officer of a big industrial company says the first question asked by investors – French and foreign – is now about the government’s policies and whether the tax rises will affect senior management. But he says the main effect will be to drive away owners of smaller businesses who fear not being able to cash in their wealth when they want to sell their companies. “It will be like the UK in the 1970s,” he says. “We will lose a generation and they won’t come back.”
…The president has always been clear that the 75 per cent tax rate, which he says will affect only 3,000 households, is much more important as a symbol to deter excessive executive pay than as a revenue-raising measure. But James Johnston, private client lawyer and head of the French group at London-based Bircham Dyson Bell, expects the increase to lead to the departure of wealthy French citizens to the UK, Switzerland and Belgium.
“France already has one of the highest tax rates for high-net-worth individuals. A 75 per cent top rate of income tax would bring the total theoretical marginal rate of tax, with everything added in, up to 90 per cent. This is a rate that the rest of the world is not resorting to.”
It’s a symbol all right. It’s a symbol of a state set on putting an absolute cap on individual ambition, a symbol of a state run amok. Needless to say, it’s popular. Some of those cheering Hollande on need to remember that once the principle of a maximum income has been conceded, the ceiling can always come down…
And yet there are those that argue that Germany should underwrite this regime’s debt. Extraordinary.