In 2011, 8,000 French households’ tax bills topped 100 percent. It is so shocking that it is worth repeating: The French government was taxing some of its citizens at a rate that exceeded their income. These were not the super-wealthy; the tax hit families that had household assets (not necessarily income) that exceeded $1.67 million.
As most people know, the French elected a socialist president, Francois Hollande, in May of last year, and a socialist government in parliamentary elections held about a month later. Hollande and his socialist comrades ran on the platform that the wealthy in France were not paying enough in taxes. When is enough, enough for people who believe the government should constantly grow and that only a small percentage of the population should bear the burden of that growth?
It seems that in France they are still pushing the goalposts to the left — and are prepared to continue doing so, even when the tax burden on some citizens exceeds 100 percent.
This type of tax burden is really only the most egregious part of the approach. The rate for thousands of other French people was set at 75 percent. According to the governing elite, those folks were fortunate that they got to keep 25 percent of what they worked to earn instead of having it all taxed away.
In response to this populist expropriation, the people of France who were subjected to this tax regime are doing what is logical. They are moving, or moving their income, or — one presumes — simply stopping being productive.
When the most productive people lose their incentive to be productive, the economic growth of any nation is badly affected. It inevitably leads not only to less energy in the economy as a whole but to less revenue for the government as the economy hits stall speed.
It would seem easy to just dismiss this outrage with a phrase like “There go the French again” and move on with life here in the United States. But we are already seeing similar patterns here.