French Government Now Wants 75% !

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French President Francois Hollande and his increasingly unpopular government continue to look for new and innovative ways to squeeze yet more money from hard pressed French citizens.

One of their latest plans is to implement a new tax rate of 75% on those earning more than a €1million per year. Many people will have little sympathy BUT The implications could be far reaching. Earlier in the year one of France’s top actors, Gerard Depardieu famously renounced his citizenship over the issue. As Depardieu (holder of 7 different passports, which is a really smart way of keeping one step ahead of governments greedy clutches) says he has already paid many millions of taxes over the last 30 years but now enough is enough. The net result for France is that this year he will pay €0 into the French coffers.

There is also a danger that the French national football league will collapse. Usually football players have special tax arrangements because of the fact their career is on average less than 10 years. This exemption will not apply to players nor clubs and could see an exodus of top players (and their current tax payments).

In the 1960’s the Beatles and other famous musicians, entrepreneurs and scientists left Britain when their tax rate was increased to 97.5% – can you imagine anyone agreeing to stay in a country where you get to keep $25 from every $1000 that you earn!

Other options the French are implementing or considering are

Increased Pension Tax. France is currently broke and yet it has some of the most generous pension arrangements in the world where its citizens can retire on a full pension aged just 55. Clearly the system can not continue in its current format, but instead of over hauling it in the same way that other countries have dealt with the problem by increasing the age of retirement from the average 65 to 67/68 years of age. France’s solution is to change nothing (its difficult to get re-elected without pensioners votes) and increase the tax on current workers.

Not content with the aforementioned there is further talk of taxing energy drinks at a special, ultra high rate. Increasing property tax based on valuations- property prices in France have fallen over 25% in the last few years and are still falling, so how can the tax possibly go up based on those calculations? They are even trying to tax data transfers outside of the EU ad finally they have just cancelled the promised “tax pause” that was scheduled for 2014. So politicians broken promises once more should come as no surprise, but the lengths to which they are prepared to go to for more tax income should concern all of us.

Finally and probably the most stupid thing they have come up with is at a time of high unemployment and with a need to get more people working and investing they have made it more difficult by implementing new regulations and restrictions and placing hurdles in the way of those willing to establish new businesses. It’s the economics of the mad house once more.

The last time France was in such an economic turmoil it ended in the French Revolution.

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