75% Tax Rate: The Madness of Monsieur Hollandé

The French constitutional court has finally ruled that Socialist President Francois Hollandé’s desired 75% income tax on earners over 1 million euro can go into effect. The exorbitant tax rate was initially disapproved by the same French court nearly one year ago, but was re-tooled to make employers liable for salaries instead of individuals.

As Bloomberg reports:

Under Hollandé’s proposal, companies will have to pay a 50 percent duty on wages above 1 million euros ($1.4 million). In combination with other taxes and social charges, the rate will amount to 75 percent of salaries above the threshold, the court wrote in a decision published today.

Hollandé, who once said he “didn’t like” the rich, announced the 75 percent tax in February 2012 as part of his presidential campaign to appeal to his Socialist base. It has become a symbol of his government’s record-high taxation rate.

France is teetering on the brink of severe recession. Yields on government bonds have skyrocketed within the past 2 years as lenders become increasingly unnerved by the French Government’s seemingly uncontrollable deficit spending. It is becoming more expensive for the French government to borrow; therefore, they must either inflate, tax, or cut spending. Inflation is not an option, due to France’s adoption of the euro. The German government will not allow it. Furthermore, successive French governments have shown time-and-time again that an insane commitment to massive government spending is somehow ingrained into the French psyche; therefore, I sincerely doubt Hollandé will pursue any meaningful cuts in government spending anytime soon.

Hollandé has heartily chosen to head the taxation route. Already, numerous high-earning Frenchmen have left the country as a result of Hollande’s policies. Even French soccer clubs have protested, threatening to move elsewhere. Hollandé has, of course, dismissed these people as greedy and unpatriotic, and insists that the 75% tax rate will lead France into healthier economic times while also promoting an egalitarian social agenda. You can be sure of this: the French People are going to face a great deal of suffering and misery in the near future as Monsieur Hollandé’s confiscatory economics of the badge and the gun drive business and investment out of France.

As the 1600’s French politician Jean-Baptiste Colbert once quipped, “The art of taxation consists in so plucking the goose as to obtain the largest amount of feathers with the least possible amount of hissing”. To Hollandé, France’s wealthier businesses and citizens are his gooses to be plucked; but Monsieur Hollandé will soon find that it is not just the wealthy, but indeed all of France that hisses back at him.

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