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.
The really wealthy don’t take income. Instead they park their wealth in stocks and trust funds and leverage those as collateral for cheap loans from their buddies at the bank.
I thought communists were intelligent but this thread is devoid of any intelligence. quite cheery about something that won’t even impact any capitalist.
Don’t you all know what "Capital"ist means?
An income tax is a tax on the working class.
You morons should stop salivating and start eating more dried fruits.
Edit: I realize calling people morons is a bit too much. Sorry about that. I was just miffed by a few who were cheering on punishing their own class. It’s so hard to find class solidarity in this day and age.
Argument is correct.
Tone is asshole.
Upvote or downvote? I’m not sure on this one.
I don’t know how France classifies “income”, so it could be good at capturing income. It’s our own fault when something that is obviously “income” doesn’t technically count, in principle a tax system can capture everything that makes sense to count.
In the US, along with wages, interest income and dividend income also count as “regular” income and are taxed appropriately. Capital gains is… weirder and this is the first area ripe for opportunity to reform to capture “rich guy income is different than normal guy income”, as long as it is intelligent about it (e.g. if you said, without qualification, all capital gains are taxed like crazy, then suddenly selling your house as part of moving becomes an unreasonable burden, which is why it already has an exemption, but just an example to say vaguely why we have to be careful about capital gains).
Then you get to the borrowing you mention, and I’ve seen a pretty reasonable approach to capture that as “income”, in theory: https://equitablegrowth.org/closing-the-billionaire-borrowing-loophole-would-strengthen-the-progressivity-of-the-u-s-tax-code/
TL;DR: Currently borrowing doesn’t count as realizing gains, change it so that borrowing counts as “selling” the stock, further mandating that the cost basis of all identical stock is a specific way rather than letting the shareholder pick and choose their most favored cost basis.
I’d be willing to concede some tax break on repayment of such a loan to reconcile “real income” being exchanged for it down the road, but at that point I think it would largely be academic because suddenly there’s no point in borrowing against the stock rather than just selling it outright.
Income from capital can be, and is, taxed differently. In the U.K. there is Capital Gains Tax, for example. Why not adjust this instead of income tax?
Because capital gains taxes are only taken when a gain is realized. Me selling my 2 shares of Boeing will get taxed capital gains, but the person holding 200,000 shares and using them as collateral for untaxed loans will get no capital gains taxes assessed.
Also because making gains in the market is one of the few ways a working class person can set themselves up for retirement (as fucked up as that is), so raising the tax would hurt them more unless you have a tiered structure like we do for income tax brackets.
Can we get a non Murdoch source on this?
This is not a tax on the rich, it’s a tax on the upper middle class.
Your instinct to search for a non-Murdoch source is correct, as they are trying to paint the entire NFP as holding the same positions as their most extreme member.
There is little to no chance of Melenchon becoming Prime Minister or having any ability to enact this tax.
However a marginal tax rate of 90% on income over €400k is well above the upper-middle class and would apply to only the wealthiest families, most of whom would still have other avenues to minimise the tax they actually pay.
The… upper middle class…? An income of 400,000 euros? that’s 10x the median income.
What tf is rich then?
People who make money by investing. In the USA, the top 1% earn their income through investments, usually the purchase and sale of stocks. These are not taxed the same as regular income because they made the argument that you can’t really tax unrealized gains on investments that are sold, and it takes a while for the gains to actually materialize. Also, they tend to store their money, their liquid assets, in countries with looser tax laws, called tax havens. Much of their net worths are tied up in investments. Businesses, homes, art, classic vehicles, precious metals futures, oil futures, boats, etc.
Assessing the value of all of that is a chore, and they also pay lobbyists to keep the IRS defanged so that they don’t have the resources needed to go after the 1%. And don’t get me started on how much more speculative the stock market has become. Investors buy stocks, not on the expected dividends they’ll receive as a share of the profits of the business, but on their ability to flip the stock and sell it at a higher price to another investor, who is only buying because they anticipate flipping the stock. It’s like if a whole neighborhood of single family homes gets bought up buy a few house flippers, who make renovations, then put the houses up for sale, and sell to new flippers, who are only buying so they can make further renovations, increasing the value of the property again to sell to yet another flipper, ad nauseam.
400’000€ yearly income is not middle class. It is roughly the top 1%. Are you maybe mistaking property for income?
I would have preferred taxing on property instead of income, but as long as interests and profits and other benefits are part of income, it sounds reasonable to me.
Back in the 50s and 60s after WW2 the UK had a 95% tax band for the highest earners. This was due to the country struggling to pay off its debts to the USA after WW2. The Beatles even wrote their song Taxman about it in 1966.
Ultimately there is a problem with these super high taxbands whereby countries that try them will often encounter something called the Laffer Curve whereby overall tax take decreases as the tax rate increases. This isn’t even necessarily tax evasion, all it takes is for wealthy people to be suitably motivated to avoid taxes.
In the UK now if your income breaches £100k then you are paying a higher rate of tax on everything earned over that amount but also you lose the £12.5k tax free allowance that all citizens are entitled to. Overall breaching £100k leads to you paying a marginal rate of tax of 60% even if you don’t earn much over it. Because of this high earning jobs often let you put money into salary sacrifice pension schemes to avoid breaching the £100k mark. It only becomes worthwhile earning over £100k when you reach the region of ~£130k, which is substantially more. Essentially the system encourages tax avoidance by having this cliff which people who are behaving like rational agents will do anything to avoid. If it were less punative then some economists argue that the government would raise more money.
Laffer Curve is junk economics from Ronald Reagan’s propaganda team. Cannot take seriously any argument that relies on it.
It’s not. If you accept that :
- Taxing at 0% brings no tax revenue
- Taxing at 100% also brings no tax revenue
Then you accept that between those two extremes there’s a tax optimum that for a given rate gives the most tax revenue. This is the Laffer curve.
no, it is propaganda. I mean, “Taxing at 100% also brings no tax revenue” is already a stupid statement, and is Tautologically contradictory, even more so in a progressive tax system (please look up what the even means, statistically believing in the Laffer curve also comes with a ton of other misconceptions about financial policy)
also some history to the Laffer curve, it is an unproven theory that basically always get trotted out by the wealthy to argue for lowering taxes, tho it ironically has been shown to have no predictive power whatsoever.
Funadmentally it makes sense that tax take is 0 at 0% and low (though not neccessarily 0) at 100%, but in practice it only ever used to advocate for lowering taxes no matter what they are set at currently. You never see people talking about governments being on the left side of the Laffer curve and therfore we should raise taxes.
There’s also no evidence that I’m aware of that the curve is smooth, single peaked or even single valued and it is also likely highly dependent on myriad other factors, in short it’s effectively useless except as a rhetorical device for small-staters to advocate slashing taxes and public services.
You make it sound like a cliff, but you lose £1 of the £12.5k allowance for every £2 over £100k you earn. You don’t suddenly lose the whole allowance at £100,001.
That’s interesting - I had read it being described as a cliff in various places online where people were discussing personal finances. Double checked now and you are right that it is less of a cliff than I’d thought. Good to know in case I ever get close to that tax bracket!
Oh yeah, those personal finance places all want to talk about the laffer curve, right up until you remind people how high the X value would be. Then, as if by magic, they dont want to talk about them anymore.
To me, those places always seems full of AstroTurfing for the idea of lowering taxes for rich people. There might be some good stuff in there but I would take them main political thrusts made with about as much salt as you can find.
Never ask a man his salary, a woman her age or a neoclassical economist what economic problems tax breaks for the rich won’t fix.
To much money to spend on health care?
Tax breaks for the rich.
To little money to spend on healthcare?
Tax cuts for the rich.
Just the right amount of money to spend on healthcare?
Just the right time to cut taxes for the rich.
That’s uh… pretty fucking dumb.
How the fuck did anyone think a cliff like that would be smart.
It’s especially bad with the recent inflation here causing fiscal drag. People are being dragged into higher tax brackets by their incomes rising in line with inflation (if they are lucky) but the tax bands are remaining at their pre-inflation levels so in real terms we are taxed more while earning less.
I think “the cliff” ended up being introduced in better times when £100k was an extremely good salary. It still is a good salary but it seems like when they introduced the policy they were likely thinking that folks earning it were making so much that it wouldn’t be worth their while to put the effort into avoiding it. However with recent cost of living challenges the demand for avenues to avoid the cliff rose and employers started to respond by offering schemes like the salary sacrifice pension one I mentioned in order to keep their employees happy.
Edit: There are many ways to avoid taxes such as creating your own limited company, paying for your lifestyle as a business expense and then only paying corporation tax on those expenses (currently 20% in the UK). At the same time you draw a “salary” from your own company which is substantially lower than what you would be getting if you include the expenses and then pay income tax for a lower band. The reason most people don’t do this - aside from the obvious moral implications - is that it’s usually more effort than it’s worth for them. At a certain point though, tax avoidance becomes so worthwhile that the temptation is too great for many to ignore.
The kkk references an organization common to the American Midwest and Deep South known as the “Klu Klux Klan”, most notorious for its domestic terrorist activities aimed at wealthy and well-organized communities of color following the end of the American Civil War. They were also a powerful political caucus stretching across both major American parties for over a century. Often conceived of as a “secret society” with a certain practices bordering on the occult as part of initiation and promotion, the real influence of the organization tended to boil down to its control of state and local police agencies and prosecuting offices.
A cracker is a stale white salty piece of bread, often served with soup or stew.
Gotchya.
For a second there I thought they were using it to say they’d take all of someone’s money based on the color of their skin as well as associating all white people with the KKK.
The sad thing about high taxes like that is that it can penalize normal people with a normal, high income job. 400k won’t probably matter but in my experience, I have a high salary and I don’t have the time or even the money to hire a bunch of people to optimize my taxes in a tax free-heaven paradise.
Normal working people shouldn’t be taxed like crazy. Corporation is the thing we want to target. Large corporations. They have the mean to evade the laws.
The common man and women does not. Even if you have a small company, you do not have the time or the money to ignore the laws or taxes.
Capitalism isn’t made for big corporations. It is made for small company competing with each other. How the fuck the common Man is supposed to compete with Walmart? Like, what??
Oh look, someone who doesn’t understand how progressive tax brackets work.
The 90% only kicks in on any money made over €400k, bro. That means they’re already making that 400k (less whatever the prior tax brackets are), and if they make €400,100 then only that extra €100 is taxed at 90%. This is so far from hurting “normal working people” that I can hardly believe your take isn’t a deliberate troll.
I know how tax brackets work. That’s exactly how you can optimize your taxes. You try to lower your income as much as possible with all the shenanigans that exists in the law. That’s what I’m saying.
If I do 410k and I don’t have time to optimize my shit, I’m penalized because very rich bro that owns company and shit can hire other bros to optimize their taxes.
I think “rich” nowadays starts at $1m usd/y. No one really needs more than that. I think 90% is a bit steep, but that leaves a lot of wiggle room for negotiation.
It depends on cost of living. $1M in the US doesn’t buy the same as $1M in France.
