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French Introduce New Tax On High Incomes

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http://www.bbc.co.uk/news/business-14656486

The French government is to impose an extra tax of 3% on annual income above 500,000 euros (£440,000; $721,000).

It is part of a package of measures to try to cut the country's deficit by 12bn euros over two years.

The tax increase came after some of France's wealthiest people had called on the government to tackle its deficit by raising taxes on the rich.

Paris has also reduced its economic growth forecast for 2012 to 1.75% from a previous 2.25%.

'Rigorous' And it has cut its 2011 growth forecast from 2% to 1.75%, Prime Minister Francois Fillon has said.

He said the new tax would remain in place until France reduces its budget deficit back under the EU's intended limit of 3% of GDP, which should occur in 2013.

France plans to trim its public deficit to 5.7 % this year, 4.6 % next year and 3% in 2013.

"This is a rigorous policy that will allow France to remain relaxed," Mr Fillon said. "Our country must stick to its [deficit] commitments. It's in the interest of all French people."

Faced with flat growth, the persistent threat to the country's precious AAA rating, and all sorts of turmoil on the nervous financial markets, President Sarkozy is wielding the axe. In total he's proposing 12bn euros of savings over the next two years.

Higher taxes for big companies, a cap on tax deductions applying to overtime - and a new "special contribution" from the wealthiest in the country.

It's a U-turn - in so many ways - designed to reassure investors and voters alike that only he can be trusted with the French economy.

Sixteen executives, including Europe's richest woman, the L'Oreal heiress Liliane Bettencourt, had offered in an open letter to pay a "special contribution" in a spirit of "solidarity".

It appeared on the website of the French magazine Le Nouvel Observateur.

It was signed by some of France's most high-profile chief executives, including Christophe de Margerie of oil firm Total, Frederic Oudea of bank Societe Generale, and Air France's Jean-Cyril Spinetta.

They said: "We, the presidents and leaders of industry, businessmen and women, bankers and wealthy citizens would like the richest people to have to pay a 'special contribution'."

They said they had benefited from the French system and that: "When the public finances deficit and the prospects of a worsening state debt threaten the future of France and Europe and when the government is asking everybody for solidarity, it seems necessary for us to contribute."

Perhaps they were getting a tad worried about what happened to their aristocracy last time around.

Le taxy taxy.

Come on Osborne - we're all in this together.

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Whatever.

How many well to do 'French' folk on these kinds of salaries have accounts in Lichtenstein, Monaco, Luxembourg, Zurich, Cayman Islands and the rest?

Folk like this never pay tax anyway, so its just vote garnishing rhetoric for Sarky after his failed attempts at igniting the good ol' colonial bandwagon in Libya.

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We need higher taxes on all the elites, ie the top 0.1%, they have hoarded the wealth now it's time to pay out of the bubble wealth they've hoarded.

Uh huh...

And just who is going to make them pony up?

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We need higher taxes on all the elites, ie the top 0.1%, they have hoarded the wealth now it's time to pay out of the bubble wealth they've hoarded.

Top 0.1% earners is not the same as those who hoarded wealth from bubbles.

The sets overlap but are not the same.

The former include the people whose ideas create wealth, the latter are parasites. Got to be careful that in taking out one you don't lose the other.

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They're begging to pay more tax.

Just like Buffett.

Game theory (and common sense with a healthy does of self-preservation thrown in)

http://www.bbc.co.uk/news/business-14649194

Pity Henry Ford isn't still around, it would be interesting to hear what he would say on the current situation.

http://en.wikipedia.org/wiki/Henry_Ford

Ford astonished the world in 1914 by offering a $5 per day wage ($110 today), which more than doubled the rate of most of his workers.[23] A Cleveland, Ohio newspaper editorialized that the announcement "shot like a blinding rocket through the dark clouds of the present industrial depression."[24] The move proved extremely profitable; instead of constant turnover of employees, the best mechanics in Detroit flocked to Ford, bringing their human capital and expertise, raising productivity, and lowering training costs.[25][26] Ford announced his $5-per-day program on January 5, 1914, raising the minimum daily pay from $2.34 to $5 for qualifying workers. (Using the consumer price index, this was equivalent to $111.10 per day in 2008 dollars.) It also set a new, reduced workweek, although the details vary in different accounts. Ford and Crowther in 1922 described it as six 8-hour days, giving a 48-hour week,[27] while in 1926 they described it as five 8-hour days, giving a 40-hour week.[28] (Apparently the program started with Saturdays as workdays and sometime later it was changed to a day off.)

Detroit was already a high-wage city, but competitors were forced to raise wages or lose their best workers.[29] Ford's policy proved, however, that paying people more would enable Ford workers to afford the cars they were producing and be good for the economy. Ford explained the policy as profit-sharing rather than wages.[30] It may have been Couzzens who convinced Ford to adopt the $5 day.[31]

The profit-sharing was offered to employees who had worked at the company for six months or more, and, importantly, conducted their lives in a manner of which Ford's "Social Department" approved. They frowned on heavy drinking, gambling, and what might today be called "deadbeat dads". The Social Department used 50 investigators, plus support staff, to maintain employee standards; a large percentage of workers were able to qualify for this "profit-sharing."

Although..

Was about to link to a page which would say that Ford caused the depression with his high wages, unfortunately the page appears to have been reported for malware. So no link.

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This is all part of Sarko's desperate attempt to preserve France's AAA rating (and hence save the Euro).

Sarkozy Raises Taxes to Meet Deficit Target

French President Nicolas Sarkozy’s government announced tax increases on the highest earners, capital gains, alcohol, tobacco, and sugared drinks to meet deficit targets and avoid the worst of the euro debt crisis.

However, it's unclear to what extent these measures can be taken seriously.

An exceptional tax of 3 percent on those with incomes above 500,000 euros will generate about 200 million euros next year.

200 million? Is that all? <_<

And the following is just downright bizarre

The tax on alcohol excludes wine :blink: , rum and local products.

EDIT to add: Gallic BTLetters are in biggg trouble though :)

The biggest revenue raiser would yield 2.2 billion euros next year and 200 million euros in 2011. The measure would cancel the capital-gains exemption from property sales, excluding the principal residence. A stricter inflation-based standard will be applied to the calculation.
Edited by Deckard

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Whatever.

How many well to do 'French' folk on these kinds of salaries have accounts in Lichtenstein, Monaco, Luxembourg, Zurich, Cayman Islands and the rest?

Folk like this never pay tax anyway, so its just vote garnishing rhetoric for Sarky after his failed attempts at igniting the good ol' colonial bandwagon in Libya.

I was speaking to someone knowledgeable about these things only two weeks ago, He told me the problem in France is that all wealthy people in France have now hidden their money in trusts and so don't contribute a penny to the state.

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Pity Henry Ford isn't still around, it would be interesting to hear what he would say on the current situation.

http://en.wikipedia.org/wiki/Henry_Ford

Although..

Was about to link to a page which would say that Ford caused the depression with his high wages, unfortunately the page appears to have been reported for malware. So no link.

Not this Ford thing again.

Ford was just an enlightened businessman who realised that he could make higher profits by paying more for the better people, having stability and high skill so he could concentrate on his big thing of lowering production costs and supplying a huge market.

Nothing at all to do with having the dosh to buy his cars; his own workforce would have represented 0.00001% of his market and their changed status would be irrelevent, but it's a convenient cloak to wear I guess. Think about it; how is it profitable to pay someone to buy your stuff? Easier just to keep the 100% than hand it over and hope some of it comes back so you can make your margin on it.

Nothing else. Pure profit maximisation, and good on him.

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Perhaps they were getting a tad worried about what happened to their aristocracy last time around.

Le taxy taxy.

Come on Osborne - we're all in this together.

What does that make their top rate? Higher than our 50%?

All gesture stuff anyway, it raises no money at all to implement these premium rates on top earners.

EDIT: To answer my own question, their top rate is currently 41%, so it looks like our wealthiest are already considerably more "in it together" than these lot. No need for "Osborne" to act then?

Edited by bogbrush

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Not this Ford thing again.

Ford was just an enlightened businessman ...

Nothing else. Pure profit maximisation, and good on him.

We ought to tax all idle land the way Henry George said — tax it heavily, so that its owners would have to make it productive. - Henry Ford

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[/b]

Yeah? Sounds like more self-interest to me, and certainly nothing whatsoever to do with Fords wage policy, which is what the earlier poster was writing about.

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Not this Ford thing again.

Ford was just an enlightened businessman who realised that he could make higher profits by paying more for the better people, having stability and high skill so he could concentrate on his big thing of lowering production costs and supplying a huge market.

Nothing at all to do with having the dosh to buy his cars; his own workforce would have represented 0.00001% of his market and their changed status would be irrelevent, but it's a convenient cloak to wear I guess. Think about it; how is it profitable to pay someone to buy your stuff? Easier just to keep the 100% than hand it over and hope some of it comes back so you can make your margin on it.

Nothing else. Pure profit maximisation, and good on him.

Ford himself claimed otherwise:

Detroit was already a high-wage city, but competitors were forced to raise wages or lose their best workers.[29] Ford's policy proved, however, that paying people more would enable Ford workers to afford the cars they were producing and be good for the economy. Ford explained the policy as profit-sharing rather than wages.

http://en.wikipedia.org/wiki/Henry_Ford

So yes- profit maximisation but not at the expense of the workforce. Ford, unlike his modern day counterparts, was smart enough to see that a race the the bottom in wages would in the long run destroy his customer base. In today's world demand is fast becoming the scarcest resource of all due to the idiotic policy of driving down wages via arbitrage.

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Whatever.

How many well to do 'French' folk on these kinds of salaries have accounts in Lichtenstein, Monaco, Luxembourg, Zurich, Cayman Islands and the rest?

Folk like this never pay tax anyway, so its just vote garnishing rhetoric for Sarky after his failed attempts at igniting the good ol' colonial bandwagon in Libya.

+1

Salaries are for plebs I would assume a good number of the mega rich are shareholders in some form of offshore investment vehicle which never makes any profit and you declare yourself non dom etc.

Scrap council tax and stamp duty and replace it with 1% property value tax or 10% rental value tax on property this will get more tax in than this kind of thing.

Edited by Fromage Frais

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  • 343 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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