Monday, March 5, 2012

French Presidential Candidate Francois Hollande Proves Political Idiocy is Not Limited to Conservatives

Proposed Tax Rate of 75% on High Incomes Gets Prize for Stupid Idea of the Week

The French Presidential election that will take place next month is pitting incumbent Nicolas Sarkozy against Socialist Francois Hollande (and a host of others in the first round).  Mr. Sarkozy is the center right candidate, and Mr. Hollande, as is obvious from his party affiliation is the candidate of the center left.  The key element here in France, as in the United States, is the term “center”.  Voters will reject candidates too far to either extreme so candidates have to rush to the center.  This phenomena will take place later this year in the United States.

Which one is the Socialist Candidate for
the Presidency of France and Which One is the Goat?
Hard to Tell

So one wonders what possible motive Mr. Hollande would have for proposing at top tax rate of 75%.  But that is what he has done.

French presidential front-runner Fran├žois Hollande said taxpayers earning over €1 million ($1.35 million) a year would be subjected to a special 75% tax bracket should he be elected, underscoring heightened interest across Europe in raising taxes on the wealthiest individuals

This policy is not for the purpose of increasing revenue, unlike the United States it appears there are just not a whole lot of French taxpayers who would be subjected to the new levy.

According to a 2009 French Senate study, the 0.01% richest French taxpayers, or 3,523 households, had an average yearly revenue of €1.22 million.

"It's a populist measure, because it concerns very few people and it's not going to bring a significant amount of money into the public coffers," said Emiliano Grossman, a political-science professor at Sciences Po in Paris.

so all that happens is that Mr. Hollande is depicted as an out of control leftist.

Of course, like the United States the wealthy taxpayers in France are able to evade the high de jure tax rates anyway

The wealthiest taxpayers usually manage to cut their overall tax rate substantially. In France, the wealthiest 0.1% of taxpayers have an overall tax rate of 17.5%, according to the 2009 study.

So it is hard to see how a high, punitive rate will correct those abuses.  But it will do substantial damage to Mr. Hollande’s campaign.  Mr. Hollande is a newcomer to Presidential politics in France, and if this policy is a sample of his rhetoric his stay is not likely to be long.

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