French 2013 budget plan confirms the 75% income tax policy for rich people

[hellheaven1987]

Death to the capitalist pigs by taxing them to death??

France has unveiled its budget for 2013, avoiding big austerity spending cuts in favour of higher taxes on the wealthy and big businesses.

French Prime Minister Jean-Marc Ayrault confirmed that there is to be a new 75% tax rate for people earning more than 1m euros (£800,000; $1.3m) a year.

But he insisted that nine out of 10 citizens will not see their income taxes rise in the new budget.

The government plans to raise 20bn euros in extra revenue.

That compares to 10bn euros in spending cuts.

The emphasis on tax rises is a policy of the new French President Francois Hollande that is against the prevailing mood of Europe where countries from Ireland to Greece are slashing spending to try to placate investors and lower borrowing costs.

The new sets of "rich tax" are:

- A new 75% tax on the richest earning more than 1m euros
- A 45% income tax rate on incomes over 150,000 euros a year
- A freeze in government spending, excluding debt repayments and pensions
- The elimination of a ceiling on "l'impot de solidarite sur la fortune", or wealth taxes, so that assets of more than 1.3m euros will be taxed at 1.5%
- The reduction of tax exemptions for loan payments by large corporations
- Capital gains and dividends will now be subject to the income tax regime

Source

Smart move or not? Afterall it is quite easy for those rich men fleed from France, together with their money, to other European countries such as Germany or UK, so the actual effect of rich tax probably would not be too great. However, more importantly, if France success solve their budget problem by taxing the riches, it would give a message to EU that taxing riches did work, and it is difficult to know whether EU's attitude towards the financial problems of some of its members would change or not - perhaps PIIGS would even adopt same measurement and slap the face of Germany the de-facto leader of EU.

[alhoon]

WOOOOW!
I'm not a rightwing (well, center-right) but 75% seems insane. Yes, those people earning 1M can pay it but ... it's unfair and it would lead to capital flight.

And what's that with the 1.5% in property of 1.3M Euros? If you have a villa that costs 2M Euros you pay 30K euros on top of the other taxes for your villa, or it's just the 30K and you're OK? If it's just 30K/year for a 2M Euros property it's fine. But if it is 30K/year + more property taxes it's unfair.
And is it only for property? Or for wealth you have in the bank? I.e. if a French has 2M in the bank, will he be taxed 30K/year?

Dividents should indeed be taxed though. After all you don't really do any work. You invested money and you sit in your couch while money comes in.
About the reduction of tax exemptions for loan-payment, that depends on how much these reductions were and what they are now.

[Ak1980]

WOOOOW!
Dividents should indeed be taxed though. After all you don't really do any work. You invested money and you sit in your couch while money comes in.
About the reduction of tax exemptions for loan-payment, that depends on how much these reductions were and what they are now.

But the money that you use to invest already taxed when you earn it for the first time. After you invest it to create company, the profit from the company also taxed, if dividents taxed again at standard income tax level = double taxation.

[clone]

WOOOOW!
I'm not a rightwing (well, center-right) but 75% seems insane. Yes, those people earning 1M can pay it but ... it's unfair and it would lead to capital flight.

And what's that with the 1.5% in property of 1.3M Euros? If you have a villa that costs 2M Euros you pay 30K euros on top of the other taxes for your villa, or it's just the 30K and you're OK? If it's just 30K/year for a 2M Euros property it's fine. But if it is 30K/year + more property taxes it's unfair.
And is it only for property? Or for wealth you have in the bank? I.e. if a French has 2M in the bank, will he be taxed 30K/year?

Dividents should indeed be taxed though. After all you don't really do any work. You invested money and you sit in your couch while money comes in.
About the reduction of tax exemptions for loan-payment, that depends on how much these reductions were and what they are now.

i am a right wing but (even 75 is a bit too far) i dont thing its a bad idea taxing the rich class a bit more

[Condottiere 40K]

A lot depends on whether these remain temporary measures, or become more permanent in some form or other.

[I WUB PUGS]

Just earn 999,999 euros this year instead.

[magickyleo101]

Just earn 999,999 euros this year instead.

Lol, work for a million dollars and keep 250,000. Work for 362,500 and keep 250,000...

That's 700,000 worth of work not worth doing anymore.

So much idiocy. I seriously can't believe... 75%... If I were rich I would just cut my income to € 999,999 or flee France...

At least all we right-wings/economic liberals can now sit and watch how France goes to and use it as a great example of socialism and anti-capitalism at work.

Thats something I've always found odd, but maybe its because I'm clueless about tax. Why do they use such arbitrary limits like 1 million to divide two radically different tax rates? Cant they have a tax rate which gradually increases?

In any case 75% is astounding, if I was a French millionare I'd be gone.

Irelandeb already pointed out that this isn't how income taxes work, but I think it's worth noting just how much anti-tax vitriol is based on a complete ignorance of how taxes actually function.

[Gatsby]

Irelandeb already pointed out that this isn't how income taxes work, but I think it's worth noting just how much anti-tax vitriol is based on a complete ignorance of how taxes actually function.

I'm never made an ideological anti-tax statement, I am actually quite supportive of tax increases; I simply expressed a belief that the 75% rate was too high.

And whilst originally my statement was made with a skewed idea of what the 75% actually meant, I am sure you could even find someone quite well-informed on how tax functions who disagrees with the 75% rate.

[NotYetRegistered]

Irelandeb already pointed out that this isn't how income taxes work, but I think it's worth noting just how much anti-tax vitriol is based on a complete ignorance of how taxes actually function.

That makes sense. Politicians wouldn't be as dumb to tax 75% on all their income.

Now restrict capital flight to aboard (freedom of capital my ass - not when that "free" capital is the reason we're in the we're now) and move a bunch of AMX tanks to Amsterdam and Switzerland so those sorry excuses of countries stop preying on the rest of the European Union.

Oh, and before I forget: the Netherlands out of the EU NOW!

[Nationalist]RAGE[/Nationalist]

[Thorn777]

[Nationalist]RAGE[/Nationalist]

Yes, just "rage".

Comes out of nowhere....and must be nationalistic.



Hold yours accountable, same way as we demand them to hold theirs accountable, or at least get educated and "raged" about it.

[NotYetRegistered]

Yes, just "rage".

Comes out of nowhere....and must be nationalistic.



Hold yours accountable, same way as we demand them to hold theirs accountable, or at least get educated and "raged" about it.

I thought the smiley made it clear I wasn't serious.

[Col. Tartleton]

Lol, work for a million dollars and keep 250,000. Work for 362,500 and keep 250,000...

That's 700,000 worth of work not worth doing anymore.

[removeduser_4536284751384]

Lol, work for a million dollars and keep 250,000. Work for 362,500 and keep 250,000...

That's 700,000 worth of work not worth doing anymore.

So much idiocy. I seriously can't believe... 75%... If I were rich I would just cut my income to € 999,999 or flee France...

Thats something I've always found odd, but maybe its because I'm clueless about tax. Why do they use such arbitrary limits like 1 million to divide two radically different tax rates? Cant they have a tax rate which gradually increases?

People earning over 1 million euros are not taxed at 75% with people earning less taxed at 45%. That would be crazy and that's not the case. 1 million is the cut off point, their earnings over that are at 75%, not their whole income. I will approxiamate what someone earning 1,200,000 pays:

• 200,000 @ 75% = 150,000
• 850,000 @ 45% = 382,500
• 54,000 @ 41% = 32,800
• 15,000 @ 23% = 3,450
• 11,000 tax free

The total tax they pay in this (inaccurate) example is 568,750, or 47%.

BTW will the assets of the factories or banks taxed at 1.5% of their worth, or that's just for physical persons instead of companies? I.e. if a company owns a couple of limestone mines and the machinery needed to produce the gravel etc, will these be taxed at 1.5% of their worth or just the houses of the owner etc?

Wealth tax only applies to individuals, not companies.

[alhoon]

I will approxiamate what someone earning 1,200,000 pays:

• 200,000 @ 75% = 150,000
• 850,000 @ 45% = 382,500
• 54,000 @ 41% = 32,800
• 15,000 @ 23% = 3,450
• 11,000 tax free

That's actually far more reasonable.
However the non-exemption of loan payments and the 1.5% wealth tax are going to hit the companies and the millionaires hard. Some many not be able to make ends with the new tax system since their taxes increase while their income doesn't increase.

[Treize]

Lol, work for a million dollars and keep 250,000. Work for 362,500 and keep 250,000...

That's 700,000 worth of work not worth doing anymore.

I don't think it works that way...

[Muizer]

Lol, work for a million dollars and keep 250,000. Work for 362,500 and keep 250,000...

That's 700,000 worth of work not worth doing anymore.

Such high incomes are fraudulent anyway, or rather, should be. There's really no way to justify such income.

[removeduser_4536284751384]

Such high incomes are fraudulent anyway, or rather, should be. There's really no way to justify such income.

you create stuff that is so valued people are willing to give you that much? What more justification is needed?

[Ak1980]

Such high incomes are fraudulent anyway, or rather, should be. There's really no way to justify such income.

1. Save money for 5-25 years depend on your income
2. Open business
3. ?????
4. Profit! (or repeat 1-3 if you failed)

5. Invest, expand or open new business
6. ?????
7. Profit!

Repeat step 5-7 until you are bored. Simple enough?

[CtrlAltDe1337]

Lol, work for a million dollars and keep 250,000. Work for 362,500 and keep 250,000...

That's 700,000 worth of work not worth doing anymore.

My understanding is 75% is the marginal tax rate on income over 1m euros, not the average tax rate. There is a big difference.

[Col. Tartleton]

My understanding is 75% is the marginal tax rate on income over 1m euros, not the average tax rate. There is a big difference.

I should have assumed that, but I hadn't because this was being hyped as crazy communism, not a tax hike on people who can afford it.