Im not saying corporate or capital gains taxes are too low. I think they are reasonable in France, but they should take a look at loopholes. I am just telling you that your point is wrong. Income taxes do not decrease profit, because profit is not taxed under income tax. They might try to increase corporate taxes, but that will make companies run away, and French politicians don't want that to happen. Instead, they will try to force rest of Europe to increase their corporate taxes.
Yes loopholes are a plauge ever where and only benefit the rich and companies who can afford hiring someone to abuse the system.
And the income tax proposed by Hollande is way too high. The reason the income tax was "only" 40% earlier, was because they already pay high social security taxes. (20-40%) and other taxes. Now that they increase it to 75% for anything over a million, then there is no reason to earn more than a million in France.
Well is there any reason to earn a million other than personal vanity? Once your living expenses are paid and you are comfortable, then what is the point? Vanity..
But other than that, you are using a text book theory in real life and it simply does not work. Taxes in many countries for high earners are higher than in France and they have not seen a flux of people. I am not saying that 75% might not do it, but I am also questioning if it is a realistic policy. Most of the candidates, including Sarkozy and Le Pen, have been advocating hard hitting taxes on the rich.. funny how you forget to mention that.
I have already responded to that. First off Reagan decreased the tax to 28%. Secondly, effective tax rate was at 45%, not 85+%. Thirdly, the rich was less international back then and it was difficult to leave. Today, it is easy to leave because people are international and many governments are head-hunting rich people.
Well actually, he increased taxes on the rich too and removed loopholes. But that is a whole other discussion.. other than he started the top down trickle effect tax system that has been totally disproved in the US and elsewhere.
Point is that having high taxes on the last earned dollar over a certain limit does not hurt growth in the economy and does not make people flee. And the world was just as international back then as it is now. The rich were highly mobile and could easily leave countries because they could afford it. That is how we have tax havens and places like Monte Carlo, Monaco and Marbella... they were formed long ago.
French wealthy eye escape exit as tax burden rises | Reuters
According to goverment data, 1 millionare leave France every day.
Well are they French or are they non french? Seems the article tends to forget that France has been the play ground of the rich and famous for many decades.
Old article, by a US newspaper during a time where anti-French sentiment in the US was still very high thanks to Bush and the Iraq war. Sorry but even if it is the Washington Post, then the time of the article makes all sorts of red flags go up.
But companies are leaving France, and Spain.. not because of the taxes, but because of the labour laws. In fact most companies rate taxes far down on the list of important things when investing in a country. If taxes was nr. 1 then places with next to no corporate tax levels would be company havens, but they are not.
Yes, there are heaps of other factors, and it is also dependant on how much rent control there is. From what I know there are already some rent control in France. Hence, he wants to expand it. How much rent control affects, is dependant on how intrusive it is.
Yes there are heaps of other factors and rent control is a very minor part of it.
It is more intrusive, because it is an abuse of property rights. Many places where you have rent control, you are not even allowed to evict the person inside it. And when you get imposed rent control on your house, then the property value of the house collapses immediately.
yea yea, I have seen movies too. In reality, the problem is not the rent control. Not allowing to evict people has nothing to do with rent control, but other regulations to prevent abuses by landlords. In fact rent controls have been slowly but surely done away with in city centres in most countries and only in social housing, owned often by the local government, is rent controls in place. And you have to be careful in painting rent controls as the movie version... rent control can be many things.. including a version where rents are soft controlled, as in made sure the owners dont abuse the tenants who often are the weakest in society. It is much the same principles being used in the healthcare industry in Europe when it comes to drugs.
Prices are high, because Norwegian salaries are very high. Some prices in Norway are quite low, especially in technology. I don't know what regulations you are talking about, but Norway beats France in every single survey about economic freedom or regulatory burden. Taxes in Norway are high, but nothing like the kind of taxes France wants. Top marginal tax rate is 55%, and a 25% GST, pluss some other indirect taxes. So rich people in Norway get about 30-45% of their income with a very high income. However, in France if Hollande gets what he wants, then a very rich person only get 10-15% of their income. And on that small income, then you have to pay a 1-2% wealth tax.
So that is why is that when my Norwegian friends come to Spain and Denmark they marvel over the low prices on food, beer and cloths? Why is that people from Norway stream to Northern Denmark to buy meat? Prices are high in Norway because of high taxes, regulation and so on. When people in Norway go to Sweden to buy food and drinks, then you know something is wrong. But it does not matter that much because Norway has one industry other than oil, and that is fish. And as long as it has oil and the massive wealth fund, then it is not a major problem because they dont have to be competitive with other countries.
So imagine this. I have a company who has a net profit of 20 million euro. I have shares of 100 million euro. So I need to pay 2 million euro in wealth tax. But if I take out all 20 million in income, then after income and wealth taxes I have no income. What if I moved to Switzerland? Zurich has about 0.3% in wealth tax, and effective income tax around 40%. Then I can keep 13.7 million euro, which I can invest in a new company. No one in their right mind will stay, if they happen to be in that situaton. They can't afford it.
Yes national pride and loyalty does seem to have given away to greed. Gone are the days when wealthy people invested in their home country out of national pride.. and welcome to the greed fest thanks to Reagan and America. But then again, the richest person in France as asked to pay more taxes to save the nation, and as has many other rich people.. so guessing greed has not totally ruined people.
But some rich people will stay. The ones who stay are the gamblers and the retired. They have 100 million euro in stock, buy the right companies, find a way to get their stocks to increase and sell. That is, people like Mitt Romney. However, big investors who need to use the profit of their company, will leave. That means, new companies are not going to be created in France. France will decline.
Seriously the empirical evidence does not show this. Denmark and Sweden have high tax rates and yet their rich did not flee.. why is that? According to you, they should have jumped ship years ago.. but nope.
Another point that is rarely mentioned about France is their high poverty rate. No, I am not talking about their relative poverty rate, but their absolute. Their absolute poverty rate adjusted for cost of living is the same as America. And it is a problem. People started rioting all over France in 2005, because of their low standard of living.
absolute poverty rates.. another way of muddling the field. There is no way to accurately do absolute poverty rates with an adjustment for cost of living because cost of living varies so much internally in a country. People in parts of Paris or New York have higher cost of living than people other parts of Paris and New York, and when compared to rural areas.. wow. 30k is a lot of money in rural France, where it is nothing in Paris. 30k is a bunch of money in the deep dark south in the US but in New York it is far below the poverty level.
Then you can do average, but that is just average. The Median income in the US is 50k.. and yet 70+% of the population earn 50k or less.
They don't have to reduce the retirement age because they got oil? That makes no sense. I said, Labour is not advocating to reduce the retirement age to 60 years. That sounds like something a left wing oil-rich country would do. In fact if Norway had fiscal problems, Labour would probably increase it to 65, 70.
Dude, Norway is a left wing oil rich country. They did not have to raise the retirement age because they can afford in the short and medium and even long term not too, because of the oil.
Actually Denmark increased their retirement age to 67 and the new government has no plans of reversing it.
You mean the new left wing government?
In Norway the work hours are 37.5. In France it is 35.
Well that is a whole other matter. France has labour market problems including the 35 hour a week work limit that is not flexible like elsewhere.
In Norway there is no rent control, even in Oslo where prices are higher. In France there already is rent control and Hollande want to expand it.
Again, rent control has nothing to do with higher prices. There is very little rent control in Hong Kong or London, and yet their property prices and rents are the highest in the world. Dubai has no rent controls, and their rents are insane.
Fact is, Norway is to the right of France. Labour in Norway would say the policies of Hollande is irresponsible. I come from Norway, I have been active in politics in Norway. If Hollande came to Norway and proposed the same policies, I would assume he is from SV. SV is not communist at all. The scary part is that Left Front got 15%, and they want an income cap at about 200K. Even Rødt would not propose having an income cap, and they don't get 15% They get 1%.
Let me guess you supported the same lot that Brevik supported right?
