It’s not just the wealthy who are raising a stink over François Hollande’s tax policies. Small French entrepreneurs are up in arms over his decision to tax capital gains at the same rate as earned income. Calling themselves “les pigeons,” which loosely translates to “suckers,” they’ve taken to Facebook and Twitter to organize their protests, spurred on by fears of investment completely drying up in France. Bone-headed comments from government officials weren’t helping things. FT:
Stoking the ill feeling were remarks made by Pierre Moscovici, the finance minister, on Friday when he referred to those “who earn while sleeping”, adding: “It is not right that capital income is taxed at a lower rate than income from work.”
That kind of economic illiteracy masquerading as populist “common sense” will do France no favors in the long run. An important goal of tax policy should be to encourage people to invest their money into businesses rather than spending it on themselves. Investment leads to growth, which means jobs for everyone. Even smart lefties like Matt Yglesias get this.Europe needs a strong and prosperous France to get out of the mess it’s slowly sinking into. Here’s to hoping that the pigeons push Hollande into a rethink — and that American politicians looking for revenue also leave small business alone. These are the people who create jobs; if government can’t help them much, it can at least get out of the way.