Multiple parties are jockeying for position in the aftermath of France’s seismic snap election. The leftist New Popular Front (NPF) insists its ideas should be implemented.
France’s left wing New Popular Front (NPF) - now the largest group in parliament - has called for a prime minister who will implement its ideas including a new wealth tax and petrol price controls.
The leftist alliance secured the most seats in the recent French elections but fell short of the 289 needed for a majority in the National Assembly, France’s lower house of parliament.
President Emmanuel Macron’s Together bloc came in second and Marine Le Pen’s far-right National Rally (RN) party finished third.
France’s parties are now jockeying for position and it’s unclear exactly how things will shake out, but the NPF has insisted it will implement its radical set of ideas.
a new 90% tax on any annual income above €400,000
Lmao. Probably not gonna happen but based af
I think it’s a great target to aim for. That’s an unfathomable income to most people, so it should at least have popular support
Some will, but there’s an ever growing movement against gross wealth inequality. When simply buying groceries becomes a struggle for more and more people, that’s usually a telltale sign that the working class is going to start getting angry at the insatiable greed of those at the top.
The most likely thing that will happen is the rich renouncing citizenship and leaving the country.
Taxes don’t work like that. It’s only the portion above a level that’s taxed at that level.
Worked fine in America during it’s “great” days that all these Trump voters seem to yearn for
Funny how they want to ‘mAkE aMeRiCa GrEaT aGaIn’ but don’t want any of the policies that made America great, just the shitty racist ones that made life awful for non-white males. I’m just waiting for them to further limit it by land holding or wealth at some point… Really take us back to when we were ‘really great’
Love it. Wealthy in France is 200k, anyone who makes over 400k is uberwealthy
400k is a monthly salary of 33000€
You can live very comfortably from a tenth of that where i live in germany, which is a notoriously expensive city. So yeah even if you just barely go over the limit and have to live with a tenth of those 400k, you would still be completely fine.
This is all ignoring already saved up wealth ofcourse.
TLDR im dumb
It doesn’t even work like that: only the “extra” revenue above 400k would be subject to the 90% tax, everything below that would still be subject to standard tax rates
even if you just barely go over the limit and have to live with a tenth of those 400k
Progressive taxation doesn’t work like that, the 90% tax bracket in this case would only apply to the income someone earned over €400K. Everything they earn under that amount is taxed at much lower rates, the same rates as people who have lower income
Yea 400k won’t happen, I could see something in the low millions being palatable to populace at large
Seriously, that’s how much a doctor makes while carrying $300k in student loans. Yes, these are US numbers, and I’m sure France has both lower salaries and much lower or no student loans. But the point stands that $400k is a really high salary but not necessarily wildly wealthy if you are paying more in student loans than you do for your house.
What this will accomplish is force newly rich people to stay in their class while the wealthy class people get no change at all since they don’t have a high salary. The wealthy stay wealthy while the poor have no chance to become wealthy, only merely rich.
Student loans are tax deductible (in the US at least). So if a large portion of your salary is paying off loans you don’t get taxed on that portion at all.
I hope it gets done so they can fund social programs. But the rich will flee to Germany
Maybe I’m just not used to the income needed in major cities in France, but that seems like pretty high tax rate for the income in major cities like Lyons or Paris. Can someone give me a little context? Does France do graduated brackets like the US? If that’s the case then I could see this being pretty fair.
They do. Someone with a salary of €400,000 would take home approximately €242,000 after income tax.
Up to €10,777: 0% tax rate
From €10,778 to €27,478: 11% tax rate
From €27,479 to €78,570: 30% tax rate
From €78,571 to €168,994: 41% tax rate
More than €168,994: 45% tax rate
According to The EIU, the cost of living in Paris is similar to San Francisco.
Does France do graduated brackets like the US?
Is there any place that does taxes without brackets, just flat “pass this number and suddenly lose half of everything”? Does that even exist outside the imagination of Americans who have never understood or looked at taxes? Brackets should be the definition of income taxes, is it not? It’s not an economic tariff applied regardless the volume of merchandise passing a frontier.
Honestly, they should probably leave income alone and just double down on the wealth tax.
Wage-based taxation has always been an awkward way to target the rich.
I have very different feelings about someone from a poor background who went into massive debt to develop their skills and become a top earner vs. someone who inherited a fortune and doesn’t put any effort beyond checking their bank balance periodically.
Plus, there is the “won’t they just leave?” argument. Which is mostly FUD, but in the case where someone’s wealth is based on their skilled labor they do have a much easier time just leaving. If your wealth is from owning a portfolio of apartment buildings, good luck taking those with you.
Does no one here understand how incone taxes work? The 90% rate is on annual income over €400,000. Average annual income in France was €41,000.
I think the guy you’re responding to is more talking about the distinction between income and capital gains, with income making up far less of the wealthy’s worth than existing investments.
But yes, a lot of people also have no concept of how tax brackets work.
Right. Someone with a networth of many millions may only have a yearly income of $100k. Sometimes far less. Different tax systems can also have different definitions of income. Is inheritance income? Are growth stocks that you haven’t cashed in yet income? Are stock dividends income? You can answer yes or no to any of these, but however you answer, you can still structure the tax system around those answers to come to an equitable arrangement.
The end result is that basically no one will be subject to this tax bracket.
It is high enough that everyone at that level will mainly get their real income from stock/loan which aren’t salaries.
Having this tax bracket or not having it is, basically the same for the super wealthy. The real method to tax them is through capital tax, not income.
I see fud used on a semi regular basis. It’s fear uncertainty and doubt. And I don’t think most people know that.
Wage-based taxation has always been an awkward way to target the rich.
Is it wages or is it income? Income covers much more than wages, and in a good system one would account for everything without loopholes. A comprehensive income tax that catches everything would go pretty far.
Wealth tax can be dicey, in theory. It would require a sell-off to actually have money that can be used to pay taxes, and the sell-off would change the value of the assets. For example, the S&P 500 is “worth” 46 billion dollars. That’s more than twice the “money” that exists total, it’s literally impossible to actually manifest all of that to dollars, so most of the “worth” cannot be “realized”.
I will enjoy hearing about how the rich will just move away from their fancy mansions on the Riviera and their suites in Paris to avoid paying this tax and then seeing it not happen.
Some of them, sure, but I wonder how many would consider it worth the price. This is an income taxe I’m assuming, so it’s not like they’d lose out on actual wealth, investments, etc.
It might be worth it if even just half stay and pay the taxe.
That was my point- they won’t leave. They like living there too much. That’s just always the excuse when such taxes are proposed for not doing them. “The rich will all just leave.”
If it’s successful presumably other places will start to follow suit. Somebody’s gotta go first tho.
I never understood this argument. As a middle class person, I would highly prefer if all rich people left.
They are the ones hording the wealth.
Wealth is generated by applying labour to natural resources, that process doesn’t really include rich people, they just gate the resources.
While I agree, they most certainly will still try their damnedest to avoid it. From illegal stuff like tax fraud, to trying stuff like officially “moving” their workplace to a tax haven, while still living in France. There would definitely be more class warfare to be had, even after this were to pass (which they of course will fight tooth and nail against)
Even if rich leave, so what? They dont have to pay taxes for shit and what little they do have to pay they will just avoid anyway.
I think I’ve had this conversation with you before. Anyone who uses the “they’ll just leave” argument as a reason not to do it simply isn’t arguing in good faith.
This is a good start, for sure, but it should not be the end at all. The wealthier people get, the more effort they put into hiding/keeping that wealth.
Income/wealth/property/capital gains taxation is a balancing act. You want everyone paying their share; and everyone simultaneously agrees with that notion, while wanting to pay the absolute least for themselves. I would also argue that people need to see the benefits of that taxation in the form of maintained infrastructure and properly funded services. If it all just goes into the pockets of, e.g., the US military industrial complex, people will be less inclined to pay taxes at all.
Why would they move? This is an income tax, not a wealth tax and the wealthy typically have relatively little “income”. Sure they may have a net worth of tens, hundreds, or even thousands of millions but their “incomes” (as defined by tax codes) can be surprisingly low.
Look at the CEOs like Steve Jobs and Jeff Bezos whose salary was a single US dollar. They were incredibly wealthy but had nearly no normal income.
So unless you jigger the tax code to capture the work arounds the wealthy use this income tax will hardly touch them. It will only catch high wage earners, like a software dev working FAANG or something.
I guess that’s an argument for also having a wealth tax.
Because most of them still won’t move. Paris will not become a less desirable city to live in.
Paris will not become a less desirable city to live in.
Was it ever desirable?
Problem is that the Uber wealthy have all sorts of extra tax vehicles that even the 400k/year income folks don’t have. With various holding companies owning the various assets you use (e.g your car, house, etc.) your on-paper income can be quite a bit lower. Throw in various deductions and that’s how you get super wealthy people paying less taxes than “regular” people. Progressive tax rates already exist, and while this increases the percentage at these incomes, unless it addresses all the other loopholes, this will conveniently miss the 1% and instead impact high earning professionals.
Besides, the mere fact of implementing those tax rates makes high end luxury homes less valuable, because rich people from abroad will have less incentives to want to move there. So, if rich French people want to move from a very expensive home in France to a very expensive home in Germany, the new one will have to be less luxurious, because they won’t be able to sell the old one for that much.
This does actually happen more than you think - it’s why all the world’s football and tennis stars miraculously decide to move to Monte Carlo as soon as they hit the riches. Which is exactly why we need a coordinated tax policy at an EU, EEA or global level, to make sure that you can’t just choose a neighbouring country and pay an order of magnitude less.
“Radical set of ideas”
Rational set of ideas.
There is a slight argument to be made in order to stabilize transportation because people depend on the shipping of goods. However, there should be a differentiation between the shipment of necessities and luxuries. Ultimately this could come in the form of a higher tax on consumer goods and other for hire services.
a new 90% tax on any annual income above €400,000 (£337,954)
Sexy, but as other commenters mentioned before, taxing existing wealth is more sexy
That’s true, but taxing wealth is significantly harder than taxing income or financial transactions (including inheritances).
Inflation is probably the easiest way to achieve that. You just have to be careful that wages rise along.
Agree, focus on those loopholes that allow folks to have, for all intents and purposes, “income” without it actually counting. If you have spending money now that you didn’t have in a spending form before that point, well that’s income and we just need to make sure we cover all those scenarios that folks have figured out to “not count”.
This type of taxation I would say is a version of the Ultimatum game. If the taxation is too high, they simply move and then you get nothing
https://en.m.wikipedia.org/wiki/Ultimatum_game
It has to be high enough, but not so high that they just move to Switzerland
Exit taxes are “one shot”. You pay them when you move out and then enjoy a lower taxation level for the rest of your life. Not much of a deterrent, at best a last ditch attempt at grabbing a few more dollars as your highest tax payers leave.
You could tax based on citizenship, could make it the same €400,000 limit so it doesn’t effect normal expats and lower the rate a bit. Yeah the ultra rich can just buy citizenship in another country but many have at least a smidgeon of patriotism and won’t want to lose there citizenship.
Only the US and Eritrea are stupid enough bullies to tax on citizenship. Terrible f’cking idea.
