Bad news: France in $14b euro hole after overestimating the haul from that swell 75% millionaire tax

posted at 9:21 pm on May 28, 2014 by Mary Katharine Ham

Overly sunny tax revenue predictions are not a problem unique to socialists, but you can see how those who adhere to an ideology that refuses to admit to basic human nature and the economic downsides of ludicrous tax rates might fall more dramatically than most. Timber:

The French government faces a 14bn-euro black hole in its public finances after overestimating tax income for the last financial year.

French President Francois Hollande has raised income tax, VAT and corporation tax since he was elected two years ago.

The Court of Auditors said receipts from all three taxes amounted to an extra 16bn euros in 2013.

That was a little more than half the government’s forecast of 30bn euros of extra tax income.

The Court of Auditors, which oversees the government’s accounts, said the Elysee Palace’s forecasts of tax revenue in 2013 were so wildly inaccurate that they cast doubt on its forecasts for this year.

It added the forecasts were overly optimistic and based on inaccurate projections.

Hollande, who endures a public approval rating of 20 percent (!), had first levied the whopping 75 percent tax rate on individuals making over a million euros. This prompted notable protests from actors and soccer teams, as well as the populace at which his populism was aimed.

How’d that work out for the country?

Meanwhile, economic growth has been inconsistent and the unemployment rate hit a record high of 11% at the end of 2013.

The French economy saw zero growth in the first three months of 2014, compared with 0.2% growth three months earlier.

Brainstorm: Maybe we should hire a guy who can take France and turn 70 percent of them into veritable Tea Partiers on the tax issue.

On the upside, as Dan Mitchell notes, at least one French politician of the Socialist Party is acknowledging the Laffer Curve. If he can do it, anyone can!

“The level of taxes in our country has become intolerable,” Valls said in the National Assembly. “Too much tax, kills tax” receipts, he said on the evening newscast of TF1 television May 11.

Charles C.W. Cooke notes, “the British learned the same lesson in 2012, when a new 50 percent rate proved to be counter-productive.”

The New York Times would no doubt still like us to unlearn these lessons.

Every action has an equal and opposite reaction?


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Obviously then, taxes aren’t high enough and need to be raised …

ShainS on May 28, 2014 at 9:24 PM

France…
Giggle, snort, giggle…

Doc Holliday on May 28, 2014 at 9:24 PM

Well, duh, raise taxes.

Murphy9 on May 28, 2014 at 9:25 PM

Embrasse le sucer, France…

Évêque

Newtie and the Beauty on May 28, 2014 at 9:25 PM

Let them eat frogs….

viking01 on May 28, 2014 at 9:26 PM

I’m sure this news will not deter Bill DiBlasio from enacting his own millionaire tax on NYC because it will Definitely work if it’s done right.

BeachBum on May 28, 2014 at 9:26 PM

Hollande, who endures a public approval rating of 20 percent (!)…

We should send him the minions of CNN, MSNBC, NBC, CBS, NPR, ABC…

Newtie and the Beauty on May 28, 2014 at 9:27 PM

The Gerard Depardieu picture is priceless!

Judge_Dredd on May 28, 2014 at 9:27 PM

Laffer Curve. Live it. Love it.

lorien1973 on May 28, 2014 at 9:27 PM

Sure, Hollande’s at 20% approval, but are the socialists? And have the people of France finally figured out how to put 2 and 2 together and blame the socialist for this mess? Until they get the big picture, it’s not going to get better.
They need a French Thatcher or Reagan.

Doc Holliday on May 28, 2014 at 9:29 PM

. . . like watching a psych ward fight over a bag of potato chips.

Axe on May 28, 2014 at 9:29 PM

Human nature foils liberal economics. Raise taxes and you get less effort and less activity. Purchasing is decreased or it goes underground to avert taxation. Is it really that hard to figure out?

jaywemm on May 28, 2014 at 9:31 PM

And have the people of France finally figured out how to put 2 and 2 together and blame the socialist for this mess?

Doc Holliday on May 28, 2014 at 9:29 PM

Good question. Have we?

Judge_Dredd on May 28, 2014 at 9:31 PM

On a more serious note, how does this utterly average French dude get all the Hotties? He has had a bevy of them. I guess socialist chicks love them some money, power, and a chance to bash “the rich.”

Doc Holliday on May 28, 2014 at 9:31 PM

They haven’t tried the 100% tax on all income yet. So the frogs have that to look forward to.

RickB on May 28, 2014 at 9:31 PM

Good question. Have we?

Judge_Dredd on May 28, 2014 at 9:31 PM

Define “We” :)

The folks on Hot Air? We have, yup.

The American public? Eh, maybe not. Change only comes when pain of staying the same exceeds pain of change…

Doc Holliday on May 28, 2014 at 9:33 PM

I guess socialist chicks love them some money, power . . ., and a chance to bash “the rich.”

Doc Holliday on May 28, 2014 at 9:31 PM

riiiiggghhhtttt. Socialist chicks.

Axe on May 28, 2014 at 9:33 PM

They should just mint a 14 billion euro platinum coin.

wolly4321 on May 28, 2014 at 9:35 PM

On a more serious note, how does this utterly average French dude get all the Hotties? He has had a bevy of them. I guess socialist chicks love them some money, power, and a chance to bash “the rich.”

Doc Holliday on May 28, 2014 at 9:31 PM

Oscar *ahem!* misplaced his Most Dashing Smile some time ago…*gasp!* You don’t think… o_O

Newtie and the Beauty on May 28, 2014 at 9:36 PM

The Gerard Depardieu picture is priceless!

Judge_Dredd on May 28, 2014 at 9:27 PM

.
Yeah, it is ! . . . . . Couldn’t pick a better illustration for this thread . . . : )

listens2glenn on May 28, 2014 at 9:37 PM

The American public? Eh, maybe not. Change only comes when pain of staying the same exceeds pain of change…

Doc Holliday on May 28, 2014 at 9:33 PM

Yes. The collective “We”. Especially the 65 million idiots who voted for president clowncar the second time.

Judge_Dredd on May 28, 2014 at 9:37 PM

I guess socialist chicks love them some money, power . . ., and a chance to bash “the rich.”

Doc Holliday on May 28, 2014 at 9:31 PM

riiiiggghhhtttt. Socialist chicks.

Axe on May 28, 2014 at 9:33 PM

♫Well the Ukraine girls really knock me out. They leave the West
behind.

And Moscow girls make me sing and shout. That Georgia’s always on my, my, my, my, my mind…♫

viking01 on May 28, 2014 at 9:38 PM

Tôt ou tard vous manquez de l’argent des autres.

de rigueur on May 28, 2014 at 9:38 PM

Zero growth? Zero growth. ZERO? Congo had a 3% rise in their economic growth, even Haiti saw a slight uptick.

Zero %? HAHAHAHAHAHAHAHAHA

Bishop on May 28, 2014 at 9:40 PM

They need a French Thatcher or Reagan.

Doc Holliday on May 28, 2014 at 9:29 PM

.
They sure do.
.
HOLY CRAP ! . . . . . So do we.

listens2glenn on May 28, 2014 at 9:40 PM

They should just mint a 14 billion euro platinum coin.

wolly4321 on May 28, 2014 at 9:35 PM

They tried that once on the Simpsons. Castro ended up with it somehow. Les bons temps rouler.

Judge_Dredd on May 28, 2014 at 9:40 PM

Tôt ou tard vous manquez de l’argent des autres.

de rigueur on May 28, 2014 at 9:38 PM

Truer mots n’ont jamais parlés. Comment qui élabore pour vous, France ?

Newtie and the Beauty on May 28, 2014 at 9:42 PM

Human nature foils liberal economics. Raise taxes and you get less effort and less activity. Purchasing is decreased or it goes underground to avert taxation. Is it really that hard to figure out?

jaywemm on May 28, 2014 at 9:31 PM

Look at all of the people around us like coolrepublica before you ask lol

non-nonpartisan on May 28, 2014 at 9:43 PM

The rich frogs took a powder and they aren’t coming back.

Tard on May 28, 2014 at 9:43 PM

When it comes to liberals and taxes (which they avoid), you can’t fix ‘stuck on STUPID’.

GarandFan on May 28, 2014 at 9:46 PM

They tried that once on the Simpsons. Castro ended up with it somehow. Les bons temps rouler. Judge_Dredd on May 28, 2014 at 9:40 PM

Paul Krugman must have missed that episode.

wolly4321 on May 28, 2014 at 9:46 PM

Doc Holliday on May 28, 2014 at 9:31 PM

Oscar *ahem!* misplaced his Most Dashing Smile some time ago…*gasp!* You don’t think… o_O

Newtie and the Beauty on May 28, 2014 at 9:36 PM

Don’t be silly, that wasn’t a Dashing smile, that was a dramatic glance… <— Flashes NATB Dashing smile…

oscarwilde on May 28, 2014 at 9:48 PM

Look at all of the people around us like coolrepublica before you ask lol

non-nonpartisan on May 28, 2014 at 9:43 PM

Hmm. Good point. And I wonder if they outnumber us yet.

Judge_Dredd on May 28, 2014 at 9:48 PM

oscarwilde on May 28, 2014 at 9:48 PM

*sigh*

[THUMP!]

[Dang recliner...need a slip-slide stop...]

Newtie and the Beauty on May 28, 2014 at 9:50 PM

Doc Holliday on May 28, 2014 at 9:29 PM

So, I was over at this stock forum (Investors Hub) today, and… Shock, their was a Doc Holliday posting there… Somebody done stole your nic Doc… <— Insert rueful laughter here…

oscarwilde on May 28, 2014 at 9:52 PM

Zero growth? Zero growth. ZERO? Congo had a 3% rise in their economic growth, even Haiti saw a slight uptick.

Zero %? HAHAHAHAHAHAHAHAHA

Bishop on May 28, 2014 at 9:40 PM

See me at 7:42 am tomorrow morning (assuming Ed gets the post up 11 minutes after the Thursday Economic Dump happens). The markets are expecting the second look at 1Q2014 GDP to be -0.5%.

Steve Eggleston on May 28, 2014 at 9:57 PM

Steve Eggleston on May 28, 2014 at 9:57 PM

Thanks for the heads up. Another “summer recovery” happening…esh

CoffeeLover on May 28, 2014 at 9:59 PM

‘Diminishing returns’ must not translate into French.

les lulz.

frost_ on May 28, 2014 at 10:00 PM

OT….VA Hearing just broke for a 5 minute recess. Going back for a second round of questions.

CoffeeLover on May 28, 2014 at 10:00 PM

Thanks for the heads up. Another “summer recovery” happening…esh

CoffeeLover on May 28, 2014 at 9:59 PM

Dang, Girlfriend! Your ears must’ve been burning!

Newtie and the Beauty on May 28, 2014 at 10:01 PM

Bishop on May 28, 2014 at 9:40 PM

See me at 7:42 am tomorrow morning (assuming Ed gets the post up 11 minutes after the Thursday Economic Dump happens). The markets are expecting the second look at 1Q2014 GDP to be -0.5%.

Steve Eggleston on May 28, 2014 at 9:57 PM

Wow… And I was thinking that France should be embarrassed. Now the Smartest man in the world is under performing even the barking lunatics in France. Somehow, though, I suspect Jay Carney will spin a -0.5 percent as a positive sign of our never ending Summer of Recovery.

oscarwilde on May 28, 2014 at 10:01 PM

Dang, I wish HA had opened a thread for that VA hearing tonight–they’re taking a break now before starting Round Two…

Newtie and the Beauty on May 28, 2014 at 10:02 PM

Paging Arthur Laffer..

JamesB on May 28, 2014 at 10:02 PM

On a more serious note, how does this utterly average French dude get all the Hotties? He has had a bevy of them. I guess socialist chicks love them some money, power, and a chance to bash “the rich.”

Doc Holliday on May 28, 2014 at 9:31 PM

Believe me, half of France wonders about the same :)…nobody came up with a good answer yet, others than those chicks are nuts :)…on second thought, might be the mysterious sexual vibes that Hollande sends :)

jimver on May 28, 2014 at 10:03 PM

Steve Eggleston on May 28, 2014 at 9:57 PM

Thanks for the heads up. Another “summer recovery” happening…esh

CoffeeLover on May 28, 2014 at 9:59 PM

Obama’s Summer’s of Recovery have half of America praying for another Great Depression, so things can get better

oscarwilde on May 28, 2014 at 10:04 PM

The markets are expecting the second look at 1Q2014 GDP to be -0.5%.

Steve Eggleston on May 28, 2014 at 9:57 PM

Wow… And I was thinking that France should be embarrassed. Now the Smartest man in the world is under performing even the barking lunatics in France. Somehow, though, I suspect Jay Carney will spin a -0.5 percent as a positive sign of our never ending Summer of Recovery.

oscarwilde on May 28, 2014 at 10:01 PM

Obama managed to shave the internal projection of -1% by a whopping 50%. So, right-wing-nut-jobs:

The GDP improved 50%.

Axe on May 28, 2014 at 10:09 PM

Laffer’s Curve was fully accurate, despite the deficits that followed.

His projections were based on two assumptions: a 30% across-the-board reduction in the marginal rate, effective in the first year, and holding the growth of discretionary spending to the rate of inflation.

Unfortunately, it quickly became evident to Reagan that Carter’s briefing team had deceived him about the true state of our defenses (Jane’s Review, the respected independent British military publication, had rated the USSR the world’s strongest military power for the first time ever at the end of 1979) and that a massive rebuilding was required.

→→→

However, Tip O’Neill would only agree to more military spending if allowed to spend more on social programs as well, increasing deficits. Reagan felt he had no choice but to agree.

Also, O’Neill would only pass the tax cuts in stages, with 5% cut the first year, then 10% each of the next two years.

So the spending line was busted, the tax cut was less than estimated, and implemented over three years instead of at once. Laffer was not wrong, the government just didn’t follow his prescription.

Adjoran on May 28, 2014 at 10:10 PM

Adjoran on May 28, 2014 at 10:10 PM

And Tip O’Neill lied about the tax cuts–what he cut in income taxes, he raise/created elsewhere.

Newtie and the Beauty on May 28, 2014 at 10:15 PM

Newtie and the Beauty on May 28, 2014 at 10:01 PM

LOL, there sure is a lot of us from the Sunshine State.

CoffeeLover on May 28, 2014 at 10:17 PM

Good to see that MKH has taken the torch from the departing Erika and continuing with the French posts.

whoishe on May 28, 2014 at 10:18 PM

oscarwilde on May 28, 2014 at 10:01 PM

Obama managed to shave the internal projection of -1% by a whopping 50%. So, right-wing-nut-jobs:

The GDP improved 50%.

Axe on May 28, 2014 at 10:09 PM

BWAHAHAHAH….

oscarwilde on May 28, 2014 at 10:20 PM

The cool think about internal projections is that no one would be able to see them until you made them up. Like I made up that one.

Also, try this: “See? I was right.” It doesn’t matter what it is. Kim Kardashian marries a dolphin: “See? I was right.” You don’t have to know anything about Kim Kardashian. Also, you needn’t have said anything before. It sounds like you did, which is all that really matters.

Erica is leaving. “See? I was right.” <– Ten thousand people now think you are in the loop.

The GDP is revised downward to -0.5%. "See? I was right. It's a good thing we this'd and that'd, or it would have been the worst case number of -1%." <– Ten million people now think you are keeping your eye on the canoe's water level, bailing as hard as you can, everything is under control, and you'll let them know if they need to know anything.

Axe on May 28, 2014 at 10:24 PM

BWAHAHAHAH….

oscarwilde on May 28, 2014 at 10:20 PM

I could totally do that job, dude. :)

Axe on May 28, 2014 at 10:26 PM

France needs to plant more trees along the Rues to keep the Sharia boys cool when they march in to take over.

docflash on May 28, 2014 at 10:28 PM

Socialism doesn’t work. And in other news, Water Still Wet, film at 11:00.

Liberals are not morons…they’re the definition of insane.

“We just didn’t do it big enough! Next time, we’ll tax 100%! Yeah, that’s the ticket!”

a5minmajor on May 28, 2014 at 10:48 PM

Wow… And I was thinking that France should be embarrassed. Now the Smartest man in the world is under performing even the barking lunatics in France. Somehow, though, I suspect Jay Carney will spin a -0.5 percent as a positive sign of our never ending Summer of Recovery.

oscarwilde on May 28, 2014 at 10:01 PM

Obama managed to shave the internal projection of -1% by a whopping 50%. So, right-wing-nut-jobs:

The GDP improved 50%.

Axe on May 28, 2014 at 10:09 PM

Something tells me it will be closer to -0.3%, which will allow the administration and their Presstorian Guard to claim victory in the War of Expectations.

Steve Eggleston on May 28, 2014 at 11:03 PM

I saw a broadcast of a Will Smith interview on a French show. Will boy was saying something about not minding if he had to pay higher taxes because he could afford to. The Frog doing the interview informed Mr. Smith if he was French his tax rate would be 75&. Jaden dang near lost his pops. Daddy Smith nearly had a terminal heart attack. Laughed till my sides hurt.

I wonder if Johnny (I can’t stand being American, that’s why I live in France) Depp has scooted his worthless a$$ back to the states yet? France can keep his sorry butt.

flatlander on May 28, 2014 at 11:05 PM

The libs love to beat everyone over the head with how superior Europe is to us lowly americans. See they have trains! See they have socialized medicine. See they have culture. See they have 30 hour work weeks with paid family leave. They forget that somehow you got to pay for all this. France is exhibit A on what happens if you let the libs loose on the economy. It’s only a disaster if you look at things rationally. One would think Obama would see what is happening there and get an epiphany. Whoops I forgot that if you think a failing economy is a good thing than my whole post is moot. It sure helps to get in the other person’s shoes for a new perspective…

warmairfan on May 28, 2014 at 11:10 PM

By Jove, I’ve got it! France should invite 3 million more Muslims into the country to increase the tax base. Of course there can be just a few itty bitty problems associated with that-among them being an extra $5 in welfare costs for every $1 gain in taxes plus the social and infrastructure destruction of an entire nation–but in theory it sounds good.

MaiDee on May 28, 2014 at 11:13 PM

What, France is going to be completely and utterly bankrupted by the time the muslems take it over?

Excellent.

Rebar on May 28, 2014 at 11:25 PM

MK, I don’t think that’s the symbol for Euros.

Jaibones on May 28, 2014 at 11:29 PM

By Jove, I’ve got it! France should invite 3 million more Muslims into the country to increase the tax base. Of course there can be just a few itty bitty problems associated with that-among them being an extra $5 in welfare costs for every $1 gain in taxes plus the social and infrastructure destruction of an entire nation–but in theory it sounds good.

MaiDee on May 28, 2014 at 11:13 PM

80% of the Maghrebis in France (a.o. of the same peaceful cult) are on welfare. So, don’t think they’ll invite more of them to the communal French soup. Though they don’t need to, according to the population bureau, by 2030 France’s muslim population will be at 40%.

jimver on May 28, 2014 at 11:29 PM

What, France is going to be completely and utterly bankrupted by the time the muslems take it over?

Excellent.

Rebar on May 28, 2014 at 11:25 PM

But they’ll make it into a prosperous land, as they do with every land they touch :)… think of the desert that the Palis turned into a lil heaven and a flourishing, vibrant economy :)..

jimver on May 28, 2014 at 11:57 PM

“but you can see how those who adhere to an ideology that refuses to admit to basic human nature and the economic downsides of ludicrous tax rates might fall more dramatically than most. Timber.”

You got that exactly right. They”re at war with human nature. Well said!

ncjetsfan on May 29, 2014 at 12:05 AM

And THIS is the reason Schadenfreude is NOT a French word.

gekkobear on May 29, 2014 at 2:12 AM

the french have now unleashed their ultimate weapon! Piketty! if the french rich leave, Piketty will convice other countries to tax them as much as in france until their return!

global 1% wealth tax still seems a great idea. just do it!

nathor on May 29, 2014 at 2:26 AM

He looks like Quasimodo! Hey Hollende, go back to Notre Dame and ring those bells, their troll is missing!

edgarthered on May 29, 2014 at 6:22 AM

I wrote Mr. Porter at the NYT this morning, calling his attention to his 2012 article and the referenced Bloomberg article. Other than correcting two typos, the following is what I gave him:

“But now, a growing body of research suggests not only that the government could raise much more revenue by sharply raising the top tax rates paid by the richest Americans, but it could do so without slowing economic growth. Top tax rates could go as high as 80 percent or more.”

And you are a effing idiot for not understanding basic human nature. Who wants to work and then give away virtually everything they make? Who wants to submit to highway robbery?

“Hollande has promised no further increases in taxes and, in an attempt to head-off complaints, Prime Minister Manuel Valls is now promising to reduce payments for 650,000 of the lowest-paid workers.

“The level of taxes in our country has become intolerable,” Valls said in the National Assembly. “Too much tax, kills tax” receipts, he said on the evening newscast of TF1 television May 11.” (http://www.businessweek.com/news/2014-05-13/hollande-economic-recovery-elusive-as-french-face-taxes-cuts)

Geez, France’s top rate is 75%, and you proposed 80%!

Well, with geniuses like you writing about economic matters, no wonder this nation is in trouble. What did you do, come from Mexico just to bring the United States down? If so, the idiots in Washington DC really don’t need your help. They do just fine at screwing it up all by themselves. After all, most of them were trained in the same socialist drivel that you were.

Maybe, if you pull your head out of your ass, you might just realize there is another way of looking a things – one that is not so disastrous to economies, nations, and the human condition in general.

In Liberty,

Paul W. Davis

pdavisnwa on May 29, 2014 at 7:48 AM

You know France’s immigration problems with Muslims is highly similar to ours with Hispanics-low skilled laborers with high fecundity rates high crime rates and high welfare rates–brought in because they increase the voter base for liberal politicians who favor them over both our native population and our veterans. What has happened to France is a mirror image of ourselves in the future.

MaiDee on May 29, 2014 at 8:03 AM

No, that’s GOOD news. French Socialists are only beginning to get their just desserts.

WannabeAnglican on May 29, 2014 at 8:11 AM

those who adhere to an ideology that refuses to admit to basic human nature

And that’s why you get Piketty coming out of the woodwork now. Wealth taxes, global enforcement with sanctions against countries that refused to go along. His prescriptions are the heavy handed approach to those that refuse to admit to basic human nature. Leave no place they can hide and demonize savings and investment. If people can mitigate the effects of higher income taxes then let’s get their accumulated capital. Someone who says he isn’t a Marxist as he doesn’t think government is very good at allocating resources yet wants to divert a huge portion of the accumulated wealth of the world into governments hands to kinda even things out.

JohnnyL on May 29, 2014 at 8:41 AM

The French are always broke its kind of amusing really.

sorrowen on May 29, 2014 at 8:41 AM

With King Obama’s vacations and his unwillingness to STOP SPENDING this is what he is doing to America! And after he leaves office… he will laugh all the way to the bank at America expense!

karlinsync on May 29, 2014 at 8:51 AM

NYC did that to the rich of the City with a new law and when the rich moved out and the tally was taken it found that they were millions short due to the rich moving out and to make matters worse they spent the anticipated money already, Rush was one of the ones that moved out and he had a lot of fun on the radio from Florida.

mixplix on May 29, 2014 at 8:56 AM

typical libidiot logic in reply to these obvious facts:
“the problem was the rate wasn’t high enough, it should have been 90% not 75%”

just like when idiots like Krugman tried to explain the abject failure of Obozo’s stimulus plan:
“we should have spent $4 trillion not $1 trillion, it was just too small”

thurman on May 29, 2014 at 9:28 AM

Hmmm…a shortfall of 14 billion euros? Just where are all these rich socialists that claim they can afford the higher taxes? Oh, yes, fleeing their country, and having the rest of France pick up the tab. The Progressives here in the States do the exact same thing…must be yet another European socialist trait they love…

The Ogre on May 29, 2014 at 9:53 AM

Someone call Prince Charles and show him how that tax is working out in France.

Fleuries on May 29, 2014 at 10:01 AM

A math problem.
New York City takes one million a year in tax on cigarettes, if they double the tax they will….

A) take in two million
B) take in one million
C) take in less than one million because people will buy cigarettes in New Jersey

Mordaukar on May 29, 2014 at 11:01 AM

Seriously, I think liberals are about the slowest people on earth. Everybody with a brain could see it wasn’t going to work.

Indefatigable on May 29, 2014 at 11:37 AM

And have the people of France finally figured out how to put 2 and 2 together and blame the socialist for this mess?

Doc Holliday on May 28, 2014 at 9:29 PM

Good question. Have we?

Judge_Dredd on May 28, 2014 at 9:31 PM

It usually takes about 3 years for French people to blame socialists for economic woes and high unemployment, but then they need to wait a total of 5 years for another election. If conservatives get the majority in the National Assembly (which leads to a conservative Prime Minister), the French labor unions stage massive strikes against government agencies and the mass-transit systems and paralyze the country, so that the voters bring the Socialists back in order to restore “social peace”.

The French constitution grants the “right to strike” to government employees, which effectively gives the labor unions more power than elected officials, including the Prime Minister.

Steve Z on May 29, 2014 at 1:46 PM

Maybe Hollande should read “Taxation: The People’s Business” by Andrew Mellon (Treasury Secretary 1921-1932).

Mellon had said, (paraphrase) that excessively high tax rates aren’t paid, they cause taxpayers to withdraw their capital from productive activity. (or as the case may be, in modern times, they flee to less burdensome locales).

In 1920, taxes on incomes > $300K was about 20% of revenues and the Treasury data showed a decline in the number of taxpayers who reported incomes over $300K. Max tax rate was 73%.

By 1926, the top tax rate was 25% and the taxes on >$300K incomes had amounted to 65% of tax revenues. (Mellon also greatly reduced tax rates on low income taxpayers — he did actually believe that the higher income earners should bear the greater proportion of the tax burden, so he structured tax rates as progressive — though those critical of him would claim that by reducing top marginal rates he was shifting the burden to the low income earners).

Taxes, of course, are a factor in how an economy performs. Structural things like extensive regulations have their own impacts.

I think most would admit that you need some taxes and some regulation (the Laffer curve says so) but, in this political world, the question is “where do you stop? What is the optimal amount of either/both?” and the answer for Progressive-types is “there is no limit they can think of” (except when the actual consequences actually take hold and begins to bring down their preferred system).

Russ808 on May 29, 2014 at 2:24 PM

This is why leftists and tyrants are so in love with “tax coordination”: to eliminate any means of escape.

jr.ewing.78 on May 29, 2014 at 3:09 PM

You know France’s immigration problems with Muslims is highly similar to ours with Hispanics-low skilled laborers with high fecundity rates high crime rates and high welfare rates–brought in because they increase the voter base for liberal politicians who favor them over both our native population and our veterans. What has happened to France is a mirror image of ourselves in the future.

MaiDee on May 29, 2014 at 8:03 AM

minus the cultural implications that are less dire for the Americans (relatively benign mexicans) than for the French (not at all benign muslims). In that sense, the change in demographics is far mor troublesome for afrance (by far it’s prdicted that 40% of the Fremch population will be Muslim)

jimver on May 29, 2014 at 5:53 PM

By 2040 that is..

jimver on May 29, 2014 at 5:53 PM