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Amazingly, Socialism Isn’t Helping France

Heavy new taxes on les riches are prompting many to think about getting out of France, reports the NYT:

President François Hollande is vowing to impose a 75 percent tax on the portion of anyone’s income above a million euros ($1.24 million) a year. . . .

A chill is wafting over France’s business class as Mr. Hollande, the country’s first Socialist president since François Mitterrand in the 1980s, presses a manifesto of patriotism to “pay extra tax to get the country back on its feet again.” The 75 percent tax proposal, which Parliament plans to take up in September, is ostensibly aimed at bolstering French finances as Europe’s long-running debt crisis intensifies. . . .

Many companies are studying contingency plans to move high-paid executives outside of France, according to consultants, lawyers, accountants and real estate agents — who are highly protective of their clients and decline to identify them by name. They say some executives and wealthy people have already packed up for destinations like Britain, Belgium, Switzerland and the United States, taking their taxable income with them. . . .

At the same time, in spite of brilliant new Socialist policies, the French economy is heading back into recession, says Reuters:

France’s economy is likely to slip into a shallow recession in the third quarter, the Bank of France said on Wednesday, dashing hopes for a robust recovery this year and adding to signs that Europe’s economic prospects are worsening.

To be fair, growth estimates are being ratcheted down all over Europe, from the UK to Greece; France is not in the worst shape.

Hollande is going to face some tough choices in the next year. He has predicted economic growth but seems likely to face a recession. This will force him to make more cuts or hike more taxes or some combination of both, and the ratings agencies and the bond markets will be waiting to pounce on his every move.

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  • Jacksonian Libertarian

    “To be fair, growth estimates are being ratcheted down all over Europe, from the UK to Greece; France is not in the worst shape.”

    He hasn’t been in power long enough to implement any of his Socialist Policies. Socialism hasn’t ever worked anywhere it has been tried, so just wait. Keynesian spending will suck the French capital markets dry, and new taxes will collect even less money than before while creating a crushing burden on the French economy which cannot be supported.

  • JimK

    France has been in recession for at least the last two quarters. The Socialists are just going to bury the economy, certainly no chance of reviving it. Not when you drive off the top income earners and spenders.

  • Kenny

    Jackson is right.

    Hollande has not been in power long enough for the full effects of his anti-growth policies to bare the bitter fruit they surely will.

    This will be fun to watch.

  • James C Brown

    If the million dollar question is to know how France is going to get its job-creation machine back on track after a 30-year hiatus, I doubt this 75% tax rate issue is going to matter.

  • Tom Gates

    Where is thibault when we need a good laugh!

  • Kris

    Those fat cats should consider themselves lucky! Jean-Luc Mélenchon received over 10% of the vote in the French presidential elections. His platform? Massively increasing spending. How was this to be paid for? Easy! A 100% tax rate on earnings over €360,000.

  • Anthony

    My rent in London has gone through the roof. My lamdlord wanted a 25% raise this year. I talked him down to 12%.

    The landlords here expect lots of wealthy French to move to London. Unlike the US, France does not tax nonresident citizens.

  • alex scipio

    All I have to say in re: the upcoming economic collapse in France is – they voted for the guy.


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