France abandons 75% tax rate

I’m happy for pensioners to receive money from the state but I think the time when it’s just handed over as a reward for reaching a certain age should be over – it should all be means tested like other social benefits.

Problem is, the people I’ve spoken with, mistakenly think that their pension is / will be, the result of the Gov taking all the tax they’ve paid, ever. Saved / invested that money, during their career, which is then paid back to them in retirement.
Which as we know, isn’t the case. So before you test, to see who actually needs a state pension, in retirement. It might help to educate the population on this matter.

I agree Solo – it’s the same problem the Police have – there is no ‘pot’ it’s all paid out of current income and once the number of people claiming exceeds the amount being chipped in by those paying it becomes a problem.

And another thing…

Newspapers go on about ‘benefit scroungers’ spending their lives on the dole and how ‘something should be done’

Once these people hit 65 and get the State Pension suddenly they’re the salt of the earth and deserve every penny they get – you never hear a squeak from a tabloid paper about them.

you never hear a squeak from a tabloid paper about them

Because old people don’t just vote, they buy the paper as well.

It’s an idea I find flawed but it’s pointless arguing as those who believe it just can’t see any flaws.

On the contrary, I can see plenty of flaws in ideas like these. Problem is I can also see flaws in the alternatives. It’s best to strike a balance, of course, but the difference between tories and me is where we put that balance. Do you favour maximum reward for playing the game well, or do you prioritise helping those in need?

I wouldn’t have said 75% on earnings over €1m was a good idea, though.

@footflaps come on, that’s clearly not true. William Hague spoke at 17 years old. the Young Conservatives are pretty well represented

Well at least this time you’re using facts, even if they’re more than 25 years out of date! (He’s 53 now)

Since then membership of all parties has been ageing and shrinking dramatically! The CP won’t actually release current figures (rumoured to be less than 100,000 now, down from more than 3 million in the 50s).

jambalaya
what these stats really tell you is the very large cost of state sector final salary pensions. This is actually why many state sector businesses have been privatised, its to get rid of the pension liability. Means testing the state pension wouldn’t actually change those stats very much and would be political suicide for any party that tried to implement it including the Labour party.

Actually I’m fairly sure that is just the state pension (£113.10 per week for everyone over 65) of which there are roughly 11 million people. This doesn’t include the additional cost of public sector employment related pensions. I do agree means testing would be crazy though as (i) people accepted paying NI on the expectation of their pension when they reached that age (ii) it would be a disincentive for people of working age to address their own pension if doing so reduced state pension.

Tough one this. we need more tax income, rather than specifically higher tax rates, so avoidance etc needs to be looked at.

I can see how – if I earned enough for it to be a problem! – I could live with paying 40% of my earnings above £x a year toward the wider public good, and I would be comfortable doing so.

I can also see that if someone then said they were going to take 50% off me, I might feel aggrieved enough to loo at how I could wriggle out of it, hence a reduction in the tax I ultimately paid

Tough one this. we need more tax income, rather than specifically higher tax rates, so avoidance etc needs to be looked at.

Which is why this anaemic austerity led recovery is so bad, most of the new jobs still quality for tax credits and don’t generate any tax revenue at all. Hence we have employment up but tax receipts unchanged.

Good job that ironically under a Tory government austerity has largely been a myth in the UK? One reason why the economy has grown relatively strongly. The other irony is the fact that socialist governments have run tighter fiscal policies.

Funny topsy-turvy, old world.

No surprise that Fr is abandoning a tax policy that flies in the face of plenty of research on where the optimal rate of tax is to generate the most income. Sure as hell is not 75%!

No surprise that Fr is abandoning a tax policy…..

It was only ever introduced as a two year emergency tax, why are you pretending that they are “abandoning” it ?

That, we now know, will take the form of a two-year emergency tax of 75% on individuals earning more than €1.1m (£900,000) a year as part of his government’s efforts to fill a €30bn hole in the public finances.

From an article dated Sept 2012 :

http://www.theguardian.com/world/2012/sep/15/paris-dispatch-tax-traitors

So no not surprising, we knew two years ago.

Abandoned because it hasn’t worked – the original time line isn’t relevant, it was there for a reason. It hasn’t worked (ie hasn’t addressed the reason for it’s implementation) and is now being abandoned – quite sensibly. You can try and spin it any way you like…..

Valls is more honest….

“When we came to power, we made a strategic error. We didn’t tell the French people what the condition of the country really was: the level of the deficit, the debt and the trade balance,” he said. “The welfare state and everything the Left stands for has been blown up by the shock of globalisation, which was much greater than people realised. When we were beaten, we fell back on our Old Left ideology. We spent 10 years failing to prepare, and now we have to push through our ideological revolution while in government, which is much more difficult,” he said

So socialists pushing through austerity and Tories doing the opposite. As I said a topsy turvy world.

You can try and spin it any way you like…..

😆 That’s exactly what you are doing !

We knew two years ago that it was a two year limited measure, but you are now trying to spin it that it is being “abandoned” !

@eric, the two year period was political doublespeak. The left keew people would move so they tried to say it was temporary to stem that flow. Everyone saw through that they knew the government would try and extend the tax, to make it permanent.

It has been popular with rank and file supporters of the left and yet the scale of the financial disaster means they’ve abandoned

And Hollande last month described his tax rises as “that’s a lot….that’s to say, too much.” Following his finance minister who said that the French were fed up with paying too much tax.

Meanwhile the deficit will close on 100% of GDP next year. Bravo M Hollande, bien joue!

Austerity. The issue here is governments had very little choice, whilist the economic sun shone they borrowed and borrowed. Then the music stopped and the investors reduced their willingness to lend to governments. So at that point there really was no choice.

the two year period was political doublespeak.

No it was absolutely crystal clear, we knew two years ago. Let me repeat the quote from the article written two years ago in the Guardian :

we now know, will take the form of a two-year emergency tax of 75%

There’s no “double-speak” there. It says exactly what it means.

Keep spinning it Ernie – Hollande has one consistent track record and that is volte faces on most of his tax policies. This is just the latest in a well established trend.

No wonder his mates call him La FFer Hollande.

This is just the latest

😀 “just the latest” was news two years ago !

Two years ago we knew that the 75% emergency tax would expire after two years. But now you claim, quote : “No surprise that Fr is abandoning a tax policy”.

Of course it ain’t a **** surprise…….we knew two years ago !!!!!

And you accuse me of “spinning” ?!! 😆

Hollande has one consistent track record and that is volte faces on most of his tax policies. This is just the latest in a well established trend.

ahaha hahahaha let’s get this straight – Hollande doing exactly what he said he was going to do two years ago is a volte face? the volte face is a failure to execute a volte face? spintastic!

Aren’t we meant to eat the rich, not tax them?

that would worry big Gerry…

Well KB it helps if you follow French fiscal policy closely. Over the past two years, he has introduced, changed, withdrawn (even abandoned) many apaects of his tax regime (not just the 75% policy which he struggled to implement). Usually accompanied by headlines mentioning U-turns! The only certainty about French fiscal policy is that it has been, and is, an inconsistent mess marked by failed initiatives. No wonder the poor guy is so unpopular.

Cutting corporate tax rates while cutting spending – all from a socialist government. Tres amusant.

Usually accompanied by headlines mentioning U-turns!

Even if you had countless examples of Hollande U-turns this isn’t one of them, despite your spin.

The closest it might have come to a U-turn would have been if he had ignored his own two year limit on the emergency tax and continued with it, despite what he had previously said.

But of course he hasn’t, on this issue at least he’s done exactly what he said he would do. Despite all your deliberately misleading spin.

Usually accompanied by headlines mentioning U-turns!

but there’s no headline about a U-turn on this policy, is there? what’s happened is exactly what he said was going to happen. your spinning (misleading) is a little pathetic.

Two years ago we knew that the 75% emergency tax would expire after two years.

Although we also know that it could have been extended…..

So why did the French allow the policy to expire?

Edit:
emergency tax
Love this phrase, “Quick, we’ve failed to adequatley provde for a down turn and now we’re strapped for cash… What shall we do? Rob the rich!”
Yay !
😆

@ernie, everyone on the left expect the tax to be extended, France has more of an emergency today than it had when Hollande came in, so had the tax actually worked it would be been extended as the emergency deepens. Hollande the least popular President of all time is trying to save face. The imposition of this headline grabbing 75% tax was one of his main election promises (“tax the rich they’ll pay more”) and it’s been a disaster. As for other U turns the most significant has been further tax cuts elsewhere, mainly business related tax breaks (rather than personal) and an admission that France needs budget cuts (they won’t call them austerity). He also promised to save a number of businesses from closure in Northern France inc a Michelin tyre factory which he has failed to do. Hollande rejected austerity and France’s situation has deteriorated, it is the sick man of Europe. That’s why his popularity is at rock bottom, his approval rating is 13%

Well if anyone wants to be pedantic about it, the policy wasn’t abandoned it was aborted at the early stage and replaced by another version.

Bottom line – France has attempted to use higher taxes to reduce its deficit (along aside much needed supply-side reforms). Raising taxes has not worked and is now being reversed. It’s all right our little socialist friends, it is ok to admit when things go wrong. Even GO did this and abandoned his austerity plans. It would be silly for Tories to pretend otherwise. The Tories and the Socialists have changed course – and so they should have done.

J’lya – agreed, just talked to French colleague and she was clear, the policy would have been extended if successful.

What exactly is a wealthy pensioner?

They all live on our estate. One chap has a swimming pool and was bending my ear about how much it costs to heat it so he doesn’t bother any more.

Every Saturday morning all the old folk get into their 5 Series and rive the 400 yards to the newspaper shop to buy their Daily Mails. Honestly, the newspaper guy doesn’t buy any other newspapers, just this huge pile of hate.

Then they all drive back to their houses and read up on how immigrants (like the newspaper shop guy), are taking all our jobs.

So why did the French allow the policy to expire?

Hollandes policies have obviously failed, reforms across the EU on tax etc would have to be harmonized for it to work

It lasted for its intended 2 years and wasn’t extended because it was unpopular and didnt raise enough money

As far as I can see a stronger economy would’ve been needed to support the upper level of taxation.

The French still live longer than us and work less, who’s really laughing ?

France is blue, uk is red;

Of course in the UK we just provide tax cuts/ pay incentives for the big corporations, so they will come here and contribute to our society, I mean it worked well in Ireland, they had some great boom years….

: of the 44 companies that received over £1m in government grants between 2005 and 2011, 13 didn’t pay any corporation tax at all; a further 17 didn’t pay any corporation tax either the year before or the year of receiving their public money. These aren’t two-bit firms, either: Farnsworth’s list includes Tesco Personal Finance, Dell and Plusnet.

@kimbers, well the government workers work less, a lot of private sector businesses especially in the big cities work UK hours (9-7 is typical although they do have a proper lunch). One of the reforms Valls mention was abandoning the EU working time directive (35hrs).

The French aren’t really laughing as their country is looking increasingly bust so all those great unemployment benefits and generous pensions are in grave danger. They are just unafordable.

@samuri, good luck to those pensioners who have worked all their lives and been financially prudent. Most wouldn’t have had access to credit cards or large mortgages as they where building their lives. It would have been the “mortgage queue” (ie save for many years with your building society and then wait your turn for a loan). UK pensions are subject to income tax just like your wages.

The 75% tax was ruled illegal when first mooted (2012?), the rate was so high it was determined to be confiscatory, ie theft, by the courts. The government then modified the proposals to make the tax payable by the employer and got that through the courts in late 2013. I think it may not have actually been in place even last year. However the threat of it has caused people to plan ahead and relocate, change their business practices etc etc. It has been financial disaster, totally counterproductive, they have lost tax revenue today even before the new tax has been put in place. Depardieu (bizzare though his move to Russia was) has paid over 100m euros in taxes in his lifetime, I recall his last tax bill in France was around 15m euros and now he pays zero there.

People on here have asked for examples of where high tax rates result in less money being collected and here is one, a glaring example of how counterproductive such measures are.

The 75% tax rate was an election sound bite for Hollande’s campaign and it’s turned round and bitten him and the French people in the @rse.

As far as I can see a stronger economy would’ve been needed to support the upper level of taxation.
😆

The French still live longer than us and work less, who’s really laughing ?
Right, yeah, I can hear them laughing from here…. Oh, wait a minute, that’s because… They are here.
😆

People on here have asked for examples of where high tax rates result in less money being collected and here is one, a glaring example of how counterproductive such measures are.

😆

a glaring example of how counterproductive such measures are.

Wait. You’re sayign that because this particular effort failed, then that proves ALL higher taxes result in less income?

Are you saying that if the UK 40% was raised to 41%, the same thing would happen?

Wait. You’re sayign that because this particular effort failed, then that proves ALL higher taxes result in less income?

Are you saying that if the UK 40% was raised to 41%, the same thing would happen?

That is silly. Stop it!

Jamby, why do I get the impression that you are literally erect and throbbing with excitement as you type that? 😉

It was a very high rate, too high in the wrong place at the wrong time.
Scandinavian countries seem to do very well with relatively high tax levels, but with decent public services and better relationships between unions and business.

Getting all ‘Tea Party’ excited about seeing Hollande struggling in France as the right seem to be, doesn’t help have a real debate.

Jamby, why do I get the impression that you are literally erect and throbbing with excitement as you type that?

What? is that how you’d react….
😉
A thief thinks everyone steals….

doesn’t help have a real debate.
Way amusing, as the leftites have decided what the conclusion of any debate should be, before it’s begun.
😉

Wait. You’re saying that because this particular effort failed, then that proves ALL higher taxes result in less income?

No, he appears to be suggesting that increasing tax rates beyond a certain point will be counter-productive for raising further tax revenue. A discussion commonly expressed through the well know ‘Laffer curve’ – something that we’ve been told for years by the STW lefties is unproven fantasy – in fact I recall one of the usual suspects on here stating “The laffer curve is a theory only given credence by the right wing. there is no proof of it and many reputable economists deny its existence.

Well, congratulations lefties, here’s your proof 😆