French president refuses to renege on new “supertax,” despite soccer teams’ protestations

posted at 7:01 pm on October 26, 2013 by Erika Johnsen

While some European economists and finance ministers are all about the optimism and are acting quite pleased with the eurozone’s “achievement” of barely-there but finally above-zero economic growth numbers, others are thinking a little more cautiously about whether or not member states have really, truly created long-term growth-friendly policies that can help with lowering outsized unemployment rates, encouraging sluggish consumer spending, and etcetera. Hint: Very probably not, via the WSJ:

The Centre for Economic Policy Research, a network of more than 700 economists primarily based in European universities, dates periods of expansion and recession. Its Euro Area Business Cycle Dating Committee provides judgments on the currency area’s entry into and emergence from recession that is independent of policy makers in much the same way as the National Bureau of Economic Research’s Business Cycle Dating Committee in the U.S. …

“While it is possible that the recession ended, neither the length nor the strength of the recovery is sufficient, as of 9 October 2013, to declare that the euro area has come out of recession,” the committee said.

The committee said that for it to conclude that the euro zone had emerged from recession, it would have to see “evidence of sustained growth, corroborated by a range of indicators.”

Europe still has a lot of work to do before they substantively improve their fortunes, and France, in particular, is a heartbeat away from claiming the title of the world’s largest government-spending-to-GDP ratio (a soon-to-be 57 percent). Despite the recommendations of economists and government officials, Socialist President Francois Hollande is charging forward with adding still more taxes to the country’s already historic burden in order to try and meet his deficit-reduction targets, including a temporary “supertax” of 75 percent on incomes over a million euros. I mentioned the other day that French soccer teams were ready to revolt in the event that the government follows through with the tax, but Hollande is refusing to back off:

France’s president, François Hollande, has said French football clubs will not be exempt from paying a supertax on high salaries in response to their decision to strike next month in protest.

Football clubs are staging their first strike since 1972 over the tax, which employers must pay on salaries exceeding €1m (£854m). Top clubs complain it will add up to €20m to their tax bill.

Hollande said he had accepted a request to meet the head of France’s football federation, Noël le Graët, over the 75% supertax, but saw no need to create an exception.

“When the tax law is voted, the law will be the same for all companies regardless of what they are,” Hollande told a news conference in Brussels. The bill is due in coming weeks to be passed by parliament. “This does not stop us from having a dialogue on the difficulties facing professional clubs, but everyone needs to be aware of the rules.”

And that is far from the only new tax the French government is cooking up.

French parliamentarians on Thursday (24 October) voted for a new tax on energy drinks, such as Red Bull.

The  vote is the second attempt to impose a charge on the products after the first was overturned in court. Members of the parliament voted to approve a tax of one euro per litre from next year on drinks that contain at least 0.22 grammes of caffeine per litre, or 0.3 grammes of taurine. …

The new tax aims at promoting health by limiting the consumption of such drinks, but does not affect ordinary coffee.

Aaaaaand there’s more:

The French government has also anounced that it will beef up the exit tax, a tax first implemented by Sarkozy in 2012 intended to slow the pace of people leaving the country for tax reasons. The exit penalty taxes capital gains at the rate of 19 percent and adds a 15.5 percent payroll-tax-like penalty. The tax isn’t paid as taxpayers exit the country, but they have to pay it if they sell their assets within eight years after their exit. Hollande that limitation to be expanded up to 15 years after the taxpayers leave the country.

Supertaxes, sin taxes, exit taxes… why do I find myself skeptical that any of this will help bring about the economic growth they’re looking for?


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Punish people for leaving – Zero Sum Economics
Attract people with minimal hurdles – Rising Tide Lifts All Boats Economics

AeroSpear on October 26, 2013 at 7:10 PM

“Ya can’t fix STUPID!” And I don’t recall anyone saying that the French were particularity smart. Other than King Barack and his Prince Kerry.

GarandFan on October 26, 2013 at 7:12 PM

What is yours is mine. Great attitude to teach.

CWchangedhisNicagain on October 26, 2013 at 7:23 PM

Supertaxes, sin taxes, exit taxes… why do I find myself skeptical that any of this will help bring about the economic growth they’re looking for?

What makes you think the socialists care about economic growth? Socialists do not think like you think.

All they care about is wealth confiscation and redistribution.

And in nominally “democratic” countries they want to get re-elected. They do that by confiscating and redistributing to those who vote for them.

If they can keep the economy from shrinking while confiscating and redistributing the only people really unhappy are those paying the higher taxes. Those people do not vote for socialists anyway.

Comrade O is doing this in the US with Obamacare. Lots of people are paying higher health insurance premiums so that health care can be redistributed to others. The economy can barely keep its head above water because of massive federal spending and higher taxes. American socialists hope to get reelected by blaming health insurance increases on evil greedy capitalists and health insurance companies executives. And if/when reelected their solution will be more socialism, more taxes, more government spending, more wealth confiscation, and more wealth redistribution. They have been doing this for over half a century.

Once one knows how socialists think, once one knows the enemy, it is not that difficult to understand what they are up to and why they do what they do.

farsighted on October 26, 2013 at 7:28 PM

For the past 5 minutes or so, I have been watching the Texas Tech/Oklahoma game on Fox News. Something happen to the feed in
TV Land? The Fox News spinning logo is still appearing in the lower third. Paging Roger Ailes…

Philly on October 26, 2013 at 7:34 PM

I expect Hollande to begin selling off the contents in the Louvre

workingclass artist on October 26, 2013 at 7:35 PM

I think Fox News is about to return to air on its normal channel. Hopefully someone at Crapcast is the proud owner of a new orifice.

Philly on October 26, 2013 at 7:38 PM

…JugEar’s brother!

KOOLAID2 on October 26, 2013 at 7:39 PM

No, I’m wrong. Fox Sports is running on the Fox News channel on my cable system. Game is back on air.

Philly on October 26, 2013 at 7:39 PM

For the past 5 minutes or so, I have been watching the Texas Tech/Oklahoma game on Fox News. Something happen to the feed in
TV Land? The Fox News spinning logo is still appearing in the lower third. Paging Roger Ailes…

Philly on October 26, 2013 at 7:34 PM

…me too!…I was checking my ice tea!

KOOLAID2 on October 26, 2013 at 7:42 PM

Aha. I just turned on the World Series game, and the announcer just said the Tech/OK game got booted for WS coverage and it is on Fox News. That was random.

Philly on October 26, 2013 at 7:43 PM

…game is still on…FOX Report…TX TECH/OU…Huckabee is next?

KOOLAID2 on October 26, 2013 at 7:45 PM

Vive la France!

Dhuka on October 26, 2013 at 7:48 PM

I am not a fan of substituting college football for news coverage.

Philly on October 26, 2013 at 7:48 PM

[i] will help bring about the economic growth they’re looking for?

What makes you think the socialists care about economic growth? Socialists do not think like you think.

farsighted [/i]

Depends on what order of ‘socialist’ we’re talking about. The 1st order socialist is a true believer; they are genuinely interested in redistribution.

The 2nd order socialist is not; he is a statist, a nominal socialist who understands that power and money can be gained by mouthing populist phrases.

2nd order soc’s are the leaders in most EU countries as is Obama and Co. They’re in it for the power and money.

Look at at the vacations, the graft, the cronyism. That’s socialism in the service of fascism.

chimney sweep on October 26, 2013 at 8:00 PM

I expect Hollande to begin selling off the contents in the Louvre

workingclass artist on October 26, 2013 at 7:35 PM

He’s more likely to declare that anything “French”, anywhere on Earth, is the “intellectual property” of his regime’, and demand appropriate compensation in the form of regular tax revenue.

I’m wondering how much he figures we owe in back taxes on the Statue of Liberty.

The trouble with a mania mindset like Hollande’s is that not only do people figure out ways to evade the taxation, it’s that sooner or later the government becomes a tyranny in its quest to collect the taxes. Interestingly enough, this was one of the complaints that resulted in the French Revolution in 1789.

And once it becomes obvious that no more taxes are forthcoming (because the government has bankrupted anyone with two sous to rub together), the regime’ inevitably turns to threats, coercion, and even war against its neighbors to prop itself up.

A “short, victorious war” has the effect of rallying the populace behind the Leader, as well as creating an opportunity for looting.

The trouble is, France really hasn’t got enough military left to pull it off. Also, all their potential targets in the EU are worse off than they are.

Well, except Germany. And I don’t think even Hollande believes that they can seriously expect to win that one.

BTW, when a Leader begins to make economic demands that are starkly impossible in the real world, it’s only a short hop, skip, and jump to him ordering a strategic-level nuclear strike on a pushcart in Lisbon because he believes it’s the only thing that will stop the little purple Venusians under his bed from going “bleevle” at him all night.

Just thought you should know.

clear ether

eon

eon on October 26, 2013 at 8:25 PM

What Ray Stevens said…

http://www.youtube.com/watch?v=K2yTp2qQCcc

Fallon on October 26, 2013 at 8:29 PM

He’s more likely to declare that anything “French”, anywhere on Earth, is the “intellectual property” of his regime’, and demand appropriate compensation in the form of regular tax revenue.

I’m wondering how much he figures we owe in back taxes on the Statue of Liberty.

eon on October 26, 2013 at 8:25 PM

In general, the art of government consists of taking as much money as possible from one class of citizens to give to another. – Voltaire

workingclass artist on October 26, 2013 at 8:34 PM

France is not the only country that has an “exit tax”. (We call ours an “expatriation tax”.)

http://www.irs.gov/Individuals/International-Taxpayers/Expatriation-Tax

Solaratov on October 26, 2013 at 8:34 PM

I guess it’s time to cheer on Marine Le Pen and the Front National.

She’s got all the right enemies…

CPT. Charles on October 26, 2013 at 8:35 PM

Someone leaves and becomes a citizen of a non-Euro country, I would LOVE to see France TRY and enforce that exit tax on said person.

What’s the threat? You can never return to France? Gee, what’s the down-side?

PJ Emeritus on October 26, 2013 at 8:37 PM

Coming soon to a country near you …

ShainS on October 26, 2013 at 8:56 PM

France is not the only country that has an “exit tax”. (We call ours an “expatriation tax”.)

http://www.irs.gov/Individuals/International-Taxpayers/Expatriation-Tax

Solaratov on October 26, 2013 at 8:34 PM

Wow. I was unaware of that!

Thanks for posting …

ShainS on October 26, 2013 at 9:12 PM

It doesn’t matter. If your real policy is turning France into a ‘stan through mass immigration, you are going to get a ‘stan economy in the long run. You can run a high-growth or a low-growth policy on the way there, but that’s where you’re going.

More fundamentally, the French economy won’t matter to the French if the French are gone. Mass immigration and forced integration is white genocide. In any white country where there is endless mass non-white immigration and forced integration, the white population will cease to exist. (And that means the end of its culture too – goodbye France!)

David Blue on October 26, 2013 at 11:14 PM

I expect Hollande to begin selling off the contents in the Louvre

workingclass artist on October 26, 2013 at 7:35 PM

He might as well. A Muslim-majority country may in future burn the contents anyway, as un-Islamic.

Preserving your nation’s culture matters once you have decided that the historic nation must be preserved.

Preserving your nation’s economy matters once you have decided that the historic nation must be preserved.

France hasn’t made that decision yet.

David Blue on October 26, 2013 at 11:20 PM

frankie, i am with you. whatever ya gotta do to keep the frogs in france and not wander around the rest of the world polluting it with french “culture”, so precious that even the french needed help to sustain it twice in the last century, please go right ahead. perhaps a wall around france to keep them in. we’ll toss in some clean underwear changes, soap and deodorant occasionally as i know you all have a scarcity already of those.

t8stlikchkn on October 27, 2013 at 8:01 AM

The “exit tax”, such as we have long enjoyed here, is generally one of the last gasp efforts to control capital flight from your failing economy. Those of you who claim not to know we are already there, obviously missed the spectacle of Chuck Schumer screeching when that founder of FaceBook left he country last year without “paying his fair share” of the IPO profits. On the other hand, I understand the impulse to change the channel when Schumer comes on, in any context.

Hucklebuck on October 27, 2013 at 4:19 PM