Cuba without the sun: that went well

Oh dear, the 75 per cent super income tax for those earning more than a million euros per year has been scrapped by the French government.

Quelle horreur and one of the reasons that the great unread Thomas Piketty refused his nomination for France’s greatest honour, the Legion of Honour.  I guess that another upside, come to think about it.

It is of course ironic that France’s President, Monsieur Hollande, is himself a wealthy man, owning several properties in the south of France.  (His former partner, Segolene Royal – still in the ministry – is also wealthy, notwithstanding her socialist label. )That’s the French for you, I guess.

Here’s the news:

François Hollande

François Hollande’s unpopular tax changes that imposed a 75% rate on earnings above €1m (£780,000) will quietly disappear into the history books from Thursday.

The French socialist president announced plans for the controversial measure during his 2012 election campaign as a means of forcing the wealthiest to help dig the country out of economic crisis.

Although supported by the left, the reform sparked accusations of an anti-business agenda. After the “supertax” was announced in September 2012 the government was accused of shooting itself in the foot by risking an exodus of high-profile personalities. Business leaders expressed fears that investors would pull out of France.

France’s richest man, Bernard Arnault, the chief executive of luxury group LVMH, took out Belgian nationality, and the actor Gérard Depardieu also moved across the border to Belgium before obtaining Russian citizenship.

High-earning French footballers threatened strike action, while league bosses warned they would no longer be able to attract world class players.

A majority of French taxpayers disapproved of the 75% rate, although polls showed that six out of 10 voters were in favour of raising income taxes on the wealthy.

Despite the backlash Hollande clung to the principle of the supertax even after it was dismissed by the country’s highest court, fearing a revolt by his leftwing allies. The tax was subsequently adjusted to a 50% rate payable by companies after the constitutional council ruling in December 2012.

The final nail in the coffin came from the former investment banker who is now France’s economy minister, Emmanuel Macron. A former economic adviser to Hollande, Macron described the supertax as “Cuba without the sun”.

With the party leftwingers having marched out of government in the days and months following the appointment of the openly pro-business Manuel Valls as prime minister last March, it was only a matter of time before the tax was dropped. The prime minister confirmed it would not be renewed in 2015 during a visit to London in October, where he addressed business leaders.

“The reform clearly damaged France’s reputation and competitiveness,” said Jorg Stegemann, the head of the executive search firm Kennedy Executive. “It clearly has become harder to attract international senior managers to come to France than it was.”

Tax lawyer Jean-Philippe Delsol, author on a book on tax exiles called Why I Am Going To Leave France, said last month many high earners had agreed with their companies that salaries would be limited during the two years the tax rate applied, and they would “come to an arrangement afterwards”.

Finance ministry studies showed that despite all the publicity, the sums obtained from the supertax were meagre, standing at €260m in 2013 and €160m in 2014, and affecting 1,000 staff in 470 companies. Over the same period, the budget deficit soared to €84.7bn.

The decision to drop the tax is a personal blow for Hollande and only one of a number of government U-turns since he was elected, fuelling criticism that he is indecisive and lacking presidential authority.

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24 Responses to Cuba without the sun: that went well

  1. rickw says:

    Why I Am Going To Leave France

    Following the sensible logic:

    Why I Am Going To Leave France Australia

  2. Elizabeth (Lizzie) B. says:

    All socialist feel-good talk and bluster but so little real cash raked up; same here too with our ‘tax the rich and destroy the economy’ schemes.

    When will someone show them that the way to improve things is to turn the economy around, not to hinder its growth engine? It doesn’t work any other way.

  3. Geoff says:

    Was Wayne Swan involved in the design of this at all?

  4. mundi says:

    I am seriously considering leaving Australia, sad to say.

    I can buy a bigger house in a better area closer to a bigger cbd in places like Texas for less than a third of the housing here.

    My families weekly grocery was half when in USA, and clothing costs even lower than that.

    The income tax is almost half what I pay here, thanks to joint tax returns.

    I can’t get the same pay I get here, but that is mainly an experience thing.

    All up I would easily be $600 per week better off without even trying.

  5. Robbo says:

    Hollande showed his real self the day he was sworn in and it has all been downhill since that day. Last year my wife and I were having dinner at a small bistro in Paris and the two couples at the next table were having a very animated conversation about their President and they weren’t holding back with comments on how much they despised him. Polling in France at that time, and since, show that a significant majority feel the same way. Indecisive, incompetent and vindictive are the hallmarks of Hollande who is maintaining the great French post war tradition of spending big, saving small and running up a massive mounting debt. Unfortunately the French, just like the Americans on the other side of the Atlantic, have little to cheer for when the Presidential elections come around because they too are left to choose from dumb or dumber.

  6. mareeS says:

    Why the Beatles and the Stones and most sensible people left UK: 95% tax rate. The most communist government ever was the UK in the 1960s.

  7. rickw says:

    I can buy a bigger house in a better area closer to a bigger cbd in places like Texas for less than a third of the housing here.

    Mundi, I’m facing that decision in about 6 months. No assets in OZ, all disposed of, currently living O/S, why would I make OZ my base when I can go to Houston, buy a house on lake Conroe, a boat, a pick up and all the AR-15’s and other guns I want and still have several 100k in the bank. All this on just having disposed of assets in OZ.

    Plus lower taxes and not living in a socialist nanny state…..

  8. Barry says:

    Gerard Depardieu is one of the more famous tax refugees from France.

    Meanwhile, in Germany, citizens protest against their socialist government.

  9. Token says:

    The decision to drop the tax is a personal blow for Hollande and only one of a number of government U-turns since he was elected, fuelling criticism that he is indecisive and lacking presidential authority.

    Wow, did it fail again.

    We know how it will be spun, it is a perfect system incorrectly implemented…

  10. Lem says:

    Ah, Monsieur treize pour-cent .

  11. Old School Conservative says:

    The decision to drop the tax is a personal blow for Hollande and only one of a number of government U-turns since he was elected, fuelling criticism that he is indecisive and lacking presidential authority.
    Is Tony Abbott capable of learning from others’ mistakes?

  12. H B Bear says:

    The next time the German tanks roll down the Champs Eleysees they will be working for the liquidator of this Socialist sinkhole.

  13. Bruce of Newcastle says:

    I wonder if asked what Dr Picketty would say about Venezuela?

    “Now There’s Not Even Soap” Maduro Heads To China To ‘Save’ Socialist Utopia Venezuela

    …lines reach for miles for milk and soap… and the people defy governmental bans on photographing empty market shelves… “We couldn’t find shampoo, so we washed our hair with soap. Now there’s not even soap.”

    Its getting bad when the government has to ban taking photos of empty shelves in supermarkets.

    I’m sure socialism will work if they just get the right mix of carefully designed policies. Did I see a flying pig? How odd.

  14. notafan says:

    The people in Venezuelawho can’t buy soap. Would they be the same people who have been getting free money from the government?
    My grandpa used to make soap. Aren’t there are any people there with basic live skills or has Daddy government been handing out the free stuff for too long?

  15. Dr Faustus says:

    Is Tony Abbott capable of learning from others’ mistakes?

    My concern is that Abbott will pick the wrong mistake to learn from.

    Abbott will be just as open to populist fiscal policy and pillaging the lazy $2 trillion in Australian supernnuation balances as Shorten or Milne. None of them have any intention of shutting the tap on growth in the welfare state.

  16. thefrollickingmole says:

    This will be chiselled onto the tombstone of France.

    the sums obtained from the supertax were meagre, standing at €260m in 2013 and €160m in 2014, and affecting 1,000 staff in 470 companies. Over the same period, the budget deficit soared to €84.7bn.

    Unfortunately it appears it will also be chiselled onto the tombstone of most wetern countries in the next 50 or so years.

    The gods of the copybook headings is waiting..
    …..
    In the Carboniferous Epoch we were promised abundance for all,
    By robbing selected Peter to pay for collective Paul;
    But, though we had plenty of money, there was nothing our money could buy,
    And the Gods of the Copybook Headings said: “If you don’t work you die.”

    Then the Gods of the Market tumbled, and their smooth-tongued wizards withdrew
    And the hearts of the meanest were humbled and began to believe it was true
    That All is not Gold that Glitters, and Two and Two make Four
    And the Gods of the Copybook Headings limped up to explain it once more.

    As it will be in the future, it was at the birth of Man
    There are only four things certain since Social Progress began.
    That the Dog returns to his Vomit and the Sow returns to her Mire,
    And the burnt Fool’s bandaged finger goes wabbling back to the Fire;

    And that after this is accomplished, and the brave new world begins
    When all men are paid for existing and no man must pay for his sins,
    As surely as Water will wet us, as surely as Fire will burn,
    The Gods of the Copybook Headings with terror and slaughter return!

  17. Fisky says:

    I wonder if asked what Dr Picketty would say about Venezuela?

    I’d like to see every Leftist ideologue from the Pope down to John Kwiggin answer this:

    Which policies of the Venezuelan and Argentinian governments do you DISAGREE with, and why?

    No evasions. I bet the answer is “none”.

  18. rickw says:

    Which policies of the Venezuelan and Argentinian governments do you DISAGREE with, and why?

    Argentina should be THE lesson for Australians on socialism, approximately the same arable land area, population and mineral resources. A socialist basket case littered with beautiful buildings from when it wasn’t a socialist basket case.

  19. rickw says:

    My grandpa used to make soap. Aren’t there are any people there with basic live skills or has Daddy government been handing out the free stuff for too long?

    I think the problems with the country are now more than skin deep.

  20. Baldrick says:

    Is Tony Abbott capable of learning from others’ mistakes?

    That would imply they’re listening.

  21. old bloke says:

    mundi
    #1559803, posted on January 6, 2015 at 11:51 am

    I am seriously considering leaving Australia, sad to say.

    Mundi, I found this interesting….

  22. Leigh Lowe says:

    The next time the German tanks roll down the Champs Eleysees they will be working for the liquidator of this Socialist sinkhole.

    The Germans will arrive by Mercedes and Lear Jet next time, with foreclosure papers in the briefcases.

  23. JohnA says:

    This reminds me of the old right-wing joke (yes, Hammy, I am at least up-front about it):

    Communist speech-maker and Party haranguer to the French members gathered (before they won significant power), concludes an hour-long speech on the wonders of socialism like this:
    “Comrades, come the quiet revolution, you will all enjoy the benefits of the socialist system – everyone will have equal resources, calculated at 5000 francs each.”

    One crusty old gent handed in his Party membership card straight after the meeting. When quizzed about why, he said “I have 10,0000 francs already.”

  24. Mayan says:

    What then of the current Australian junta and its new, top marginal rate of 49% (plus Medicare levy)?

    Australia? You’re standing in it.

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