French Constitutional Court Approves 75% Tax On High Earners

reply to post by Flatfish


That was my assumption as well. I think this is just to create downward pressure on executive salaries.

I can't even comprehend this......

Rockpuck
This tax rate effectively taxes only the ultra wealthy. Good or bad, it's hard to say, personally I think the destructive power of the Oligarchs in Western Society is severe enough to curb through means such as this.

Yes it has reached that point. When the oligarchs have all the money, the only choice is to tax it away from them or have the people revolt and take it from them. I think taxation is the better route.

Bassago
reply to post by antonia

 

Having 400K euros left over after taxes sounds like a lot, if you are an individual. Unfortunately if you're a small business owner with say 10 employees this tax hit would wipe them out (and the employees too.) The article were slim on details about that sort of thing though. Any info on these type situations?

You are kidding right? If not no wonder the oligarchs have all the money. Don't mean to be rude, but shouldn't you learn a bit about things before commenting? And likely taking an opinion against yourself as well?

If you are a small business owner, the tax, like all income tax only applies after you have paid your employees which is a business expense.

If you make only $1 million you will not pay any tax at this rate. Only the amount over $1 million is taxed at this rate. A business making over $1 million a year is not small regardless f the number of employees. Again please discern between revenue(sales) and profit(earnings).

This tax will have zero effect on small business, although it may even help them as the high earners decide to pay their employees better rather than pay 75% of that payroll savings in taxes. Those higher wages will spur at least some economic growth and more small businesses being opened. .

reply to post by antonia


A corporations payroll is not delegated to a single country if they do business internationally. There are easy ways to ensure you're compensated through another country. This is why the US has the ex-pat taxation laws, no matter where you earn your money as an American, you always pay American taxes so long as you hold American citizenship. France, as far as I know, does not have this kind of regulation.

I look at 75% taxation on your salary (basically your hourly wages) this way:

We all work to earn those no matter how much they happen to be at the end of the day. We all effectively have the exact same number of productive hours in a day, give or take a couple. So, when you are talking about taxing salaries and wages, you are really talking about forcing someone to spend a certain fixed percentage of those productive hours working for the government and only the government instead of working for themselves and their family.

So, why should someone spend 75% of their productive working hours working for the government?

Why is that fair when so many others are only spending so much less of their time working for the government or none at all?

Why do you think people whose skill sets are so specialized or sought after that they can command a certain amount in salary (pro athlete or actor) should be practically enslaved to the government?

reply to post by Rockpuck


And this is why so many have begun dropping their American citizenship recently.

reply to post by sligtlyskeptical


As I said the original article was sketchy on specific details. So was the Bloomberg article it was sourced from. I've also read about this months ago when it was first attempted but even in the Frace24 news articles detailed information was very limited.

Didn't try downloading the new updated French tax code though. Sometimes it's nice just to talk about issues and have others who may have more information add to the thread.

SLAYER69
reply to post by antonia

 

Well that's a good deal then. In 1998 I paid almost $450.00 for mine.

Who picks up the rest of the Dental tab?

read up on dr weston price and his work on root treatment a new study has found 97% of cancer patients have had root treatment

reply to post by Rockpuck

3.2.1. Resident in France

To be ‘fiscally resident’ in France, under Article 4B of the Code Général des Impôts (CGI) only one of the following three conditions need apply:

It is considered you have your main home in France;
You carry on a professional activity in France, either self-employed or as an employee;
Your centre of economic interests is in France, e.g. investments, business.

If you have a mailing address in France you are screwed, they are taxing you. The French are much smarter than American's about this stuff. France is my fallback position. I know the rules.

reply to post by ketsuko

So, why should someone spend 75% of their productive working hours working for the government?

This is also my question. I'm all for people not starving, etc but something about an honest person who works and creates value to the world having government of any type (basically) stealing 75% of it. That's just wrong, criminal even.

Not talking about overpaid manipulative Wall Street or banker types here. They steal enough from us as it is but when people are robbed of a majority of their money by the gov It just shows how broken things really are. We do need a new system but it's not free market (neo) capitalism or socialism.

Mamatus
So yes there will be an exodus of wealthy leaving.

When Hollande was elected, there were a few celebrities which made a big show of leaving the country to avoid these tax rates he had said he'd put into motion.
I was sure we'd see an exodus of the wealthy, but that hasn't happened.
As we have watched our neighbors falling apart (Spain, Greece....) it seems to have motivated everyone to do whatever they can to keep us from falling similarly.

Some of the largest corporations are leaving- I know the company my daughter works for is moving to Switzerland) but France has always put smaller business as a priority anyway. As they say, "Small is beautiful".

SLAYER69
On the flip side don't they have 'Free' health care?

I have never liked the american way of calling it "free".... as we pay for it with our taxes, but I guess you can say that. It is a multi-payer system, and social security works on a sliding scale- they pay 100% at a certain level of income, and that can go down to as little as 70% at higher incomes. You can also have a "mutual" (non-profit insurance, for those who aren't familiar with the term) that will fill in the rest of the cost.

(dental work is much less covered by the way.)

Bassago
reply to post by ketsuko

 

So, why should someone spend 75% of their productive working hours working for the government?

This is also my question. I'm all for people not starving, etc but something about an honest person who works and creates value to the world having government of any type (basically) stealing 75% of it. That's just wrong, criminal even.

Not talking about overpaid manipulative Wall Street or banker types here. They steal enough from us as it is but when people are robbed of a majority of their money by the gov It just shows how broken things really are. We do need a new system but it's not free market (neo) capitalism or socialism.

This is a different country, with a different culture, and different perspective.
You say "the government" as if it is a separate entity from "the people".
The french would say, "75% of my money is going to the people".
Some may say that as a good thing,
some may feel it is a bad thing.

The ones that would say that as a negative fact usually do so with the explanation that immigrants from other countries come to collect that money, and many do not work.
Even if someone might feel it, nobody would say "I don't want to help my fellow countrymen, each person for himself" the way an american would. That is so much against their culture, it would shock and anger everyone around. Solidarity is held high in value and individualism is called "egoism".
In the same way we tend to automatically associate "collectivism" as a negative, egoism is a "bad" thing for them.

One of the things I found weird at first, but now understand better is that much of the state aid goes to everyone- even if they don't need it. Like there is money people get each month for their children, and everyone gets it, even if they are rich. The money comes back to the people.

On the other hand, they do not have such a big and powerful military as the US to gobble up that money... so everything has it's positive and negative sides to it!

Some here seem confused by this (mainly Yanks, it seems)

The 75% is not a tax on company profits, or the dividends someone would get from their business (that would come under a corporation tax or capital gains tax respectively).

Also, this is not a 75% tax on the entire £1 million+. It is only a tax on earnings over £1 million. For example, if someone earn't £1.5m, they would only pay 75% on the 500K (375K). The prior £1m would be taxed at the lower rates (40-50%?), so someone earning £1.5 million would still bring home a good packet.

And I doubt we'll see a massive flight of wealth, as France has tax rules designed to stop that, otherwise they'd all just hop over the Channel to the UK which has the lowest tax rates in Europe.