No so don’t suggest this.

In which case:

it is overly complex and inefficient to run

is whataboutery. We were discussing the general principle of a progressive taxation system with more than one tax band – do you agree that this isn’t in itself complex and inefficient?

No. I agree, to a point.

Good. You do realise that one is a corollary of the other?

But where do you stop hittin-up the Riche.

I think most on this thread agree somewhere between 40% and 75% (I suspect we could narrow it down more, but I’m not confident by how much).

As to 25k being peanuts,it’s still 10x more than the other person in my example.

Yes, but if the £250k person paid £30k instead, they would barely notice. Their life would still be fine and dandy. They would still be taking foreign holidays, driving Audis, educating their kids privately etc. Whereas even an extra £1k for the £25k person would go a long way towards helping them take holidays with their kids, maybe even go to a foreign country, perhaps use a bit of language… maybe it’d buy the kid a decent bike so they could compete well at local races and be picked up by Team GB talent scouts.. maybe they could use it to take their kids to atheltics meets where their talents could shine. Perhaps they could have a week in London where the Science Museum inspires them to a career in science where they make a great discovery.. etc etc.

Maybe the other £4k of Mr £250k’s pay packet could help pay for a nurse, or another teacher for the local school, and so on.

Money in the hands of the state CAN do far more good than in the hands of individuals. CAN, of course it doesn’t necessarily always as we know.

is whataboutery.

One man’s whataboutery is another man’s discussing the exact situation we face.

We were discussing the general principle of a progressive taxation system with more than one tax band

Sorry I thought we were discussing France’s broken tax policy and lessons to be learned. My mistake. Carry on….

We did principles of taxation last week BTW.

I think most on this thread agree somewhere between 40% and 75% (I suspect we could narrow it down more, but I’m not confident by how much).

It’s all there you just have to know where to look. Ever wonder why labour didn’t raise MRT to 50% before. Despite appearances to the contrary, they were not stupid.

I think most on this thread agree somewhere between 40% and 75% (I suspect we could narrow it down more, but I’m not confident by how much).
Thank you. For my part, much closer to 40-something% although I’m still undecided at where to set the threshold for that 40% to kick in.

Edit:
I was refering to personal tax, not CT.

Of course I completely agree, I’m not a monster. I honestly believe that collecting UK corporate tax from companies like Starbucks, Google, etc would make a considerably bigger impact on revenues than soaking the wealthy, which I feel is more of a smokescreen for the ineptness of our governments ability to do so. I expect (but really can’t prove right now, sorry) that corporate avoidance is worth much more than even raising the highest tax band to 50%

Sorry I thought we were discussing France’s broken tax policy and lessons to be learned

The argument seemed to be that because France’s tax policy was not working that progressive taxation as a concept was wrong. That’s what we’re arguing against.

Jools – Starbucks paid theirs, but yes you make a good point. It’s not an easy fix mind.

The argument seemed to be that because France’s tax policy was not working that progressive taxation as a concept was wrong.

Oh, missed that bit.

That’s what we’re arguing against.

As you were then

I may start a religion thread soon, based on Ben Affleck being a bit out of his depth last week.

Oh, missed that bit.

Presumably you didn’t read what I was replying to (which I quoted and you snipped) when you quoted me to start this particular little thread then? 🙄

I’ll include your comment which Mr Woppit was replying to (which I snipped – yes I know it’s complicated) for context (my sic)

There are plenty of sound arguments why taking higher propositions (sic) from higher earners is neither morally or legally better

Putting aside what may or may not be “legal” or “moral” and focusing on what may be practical, I direct your attention to the opening post. The French tried this and it didn’t work.[/quote]

Putting aside what may or may not be “legal” or “moral”
Well.
to introduce a 75% tax rate on earnings over 1m euro (£800k) which was initially ruled illegal (confiscatory, ie stealing)
Don’t argue with them French Judges.

Just to go to Solo’s question, back of the envelope

£250k earnings is roughly £110k in taxes (note someone on that amount has no tax free personal allowance, effectively their first £10k is taxed at 47%). Also their employer will pay about £40k in employers NI.

The person on 25k pays £6k in tax and NI

So the 250/25 ratio is 10x pay and the tax ratio is 18x and that’s without the employers NI. The high earners pay a lot and out system is very progressive already.

Of course I completely agree, I’m not a monster. I honestly believe that collecting UK corporate tax from companies like Starbucks, Google, etc would make a considerably bigger impact on revenues than soaking the wealthy, which I feel is more of a smokescreen for the ineptness of our governments ability to do so. I expect (but really can’t prove right now, sorry) that corporate avoidance is worth much more than even raising the highest tax band to 50%

@jools I agree with this. Apple/Google/Starbucks/Amazon/eBay/Facebook/etc pay very little UK corporation tax despite making lots and lots of profit here (all diverted via Ireland/Luxembourg and an abuse of EU tax treaties)

So the 250/25 ratio is 10x pay and the tax ratio is 18x and that’s without the employers NI. The high earners pay a lot and out system is very progressive already.

Sounds fine to me, but then I’m not arguing there’s anything that wrong with the current rates.

Apple/Google/Starbucks/Amazon/eBay/Facebook/etc pay very little UK corporation tax despite making lots and lots of profit here

I think we’d all like them to pay more – the question is how do you propose to do that?

jambalaya – Member

@ernie, everyone on the left expect the tax to be extended

😀 Don’t be so daft, very few on the left expected Hollande to extend it. In fact until it was actually implemented most on the left remained unconvinced that Hollande had any real commitment to the election pledges he made.

Everyone knew full well that the announcement of the 75% tax policy was a panic measure by Hollande because the far left candidate Jean-Luc Mélenchon was polling strongly and drawing support away from him.

It was an attempt by Hollande to appear left-wing, credible, and radical, three things which he certainly isn’t. Most people, certainly those on the left, expected him to try and wriggle out of the commitment. Making it a two year temporary emergency tax was the best compromise that Hollande could come up with.

And as you quite rightly point out jambalaya Hollande is now deeply unpopular with the French electorate. Obviously this wasn’t always the case otherwise he wouldn’t have won the presidential election.

In 2012 he stood on a supposedly left-wing ticket and he received the approval of the majority of the French electorate. Since then, as THM quite rightly points out, Hollande has preformed numerous U-turns (letting the 75% tax expire as he said he would 2 years ago obviously isn’t one of them)

He has in fact moved more and more to the right. Has this translated into greater approval ratings ? Not at all in fact the complete opposite, ie, he is now considerably less popular than when he was pretending to be left-wing.

I think we’d all like them to pay more – the question is how do you propose to do that?

local turnover tax as a corporation tax floor (say 1-3%, industry specific) to a profit tax.

OR EBITDA tax floor (say 5-10%) so as to exclude accounting engineering wrt interest and depreciation.

I think we’d all like them to pay more – the question is how do you propose to do that?

Perhaps we need a new thread 8) or perhaps not !

I would have a special taxes, offsetable against taxes paid in the UK (ie to encourage them to have UK employees). So an online sales tax (Amazon/eBay) plus a tax on advertising revenue based upon users/views etc (Google/Facebook). Apple/Starbucks are a bit trickier but I would not allow them to tax deduct intellectual Property/Brand costs (Starbucks) or have dubious transfer pricing (Apple). The toughest part is that the EU tax rules have allowed huge abuses by certain countries, primarily Ireland and Luxembourg. For the sake of creating a few 100 jobs in Cork Ireland has allowed Apple to dodge billions in taxes which should be due in other EU states.

He has in fact moved more and more to the right. Has this translated into greater approval ratings ? Not at all in fact the complete opposite, ie, he is now considerably less popular than when he was pretending to be left-wing.

Though how do you know that he wouldn’t be even more unpopular had he carried on pretending?

Their high net worth earners are fleeing the country and their economy is (not surprisingly, except for perhaps the most fervent believers in the Magic Money Tree) down the crapper.

They went to Belgium. They came to the UK. So will they go back? How much of an effect on us will them pulling their money or their business out have?

Anyone care to comment?

@ernie – well all the well off French I know knew they would try and extend the 75% and I think the average left wing voter had no idea it was limited to 2 years. This is based on talking to people so I appreciate it’s anecdotal. Hollande was elected as he wasn’t Sarkozy. Cameron was elected as he wasn’t Brown. Most countries had a switch post the financial crises, it didn’t matter if it was left or right. Hollande has moved his policies as that was the correct thing to do (and he is being told to by the Germans). If being financially prudent is a right wing policy then he moved to the right (your comment) but knowing you shouldn’t spend more than you earn shouldn’t be seen as a left vs right policy.

Frankly it doesn’t matter which way he moves – droite ou gauche – like everyone else he is constrained but the same issues. Excess leverage affects fiscal policy (gov debt levels perceived as being unsustainable) and monetary policy (banks still need to de leverage further therefore making monetary policy largely impotent) so that leaves supply side reforms. They are great – how do you produce more for less – but they take time. No politicians magic button.

So as M Lagardere noted the other day – Europe faces a long period of low/non-existent growth ahead. The € is the elephant in the room at the core of all this.

Anyone care to comment?

It would have a negative impact, the question is how significant. Cameron famously said he would roll out the red carpet to French entrepreneurs when the 75% tax was annnouced, the French response was that their citizens would be too patriotic to leave and would stay and pay the taxes. Oh how we laugh now ! There are 400,000 French in London, many are high earners. Rental prices in South Ken and local restaurants and business would certainly suffer 😉 I imagine they have paid quite a lot of UK stamp duty too.

EDIT: Belgium has been the biggest beneficiary as it’s a short train ride/drive from Paris and they speak French so they can run their business easily from there. The French in the UK are mostly here for better employment prospects, tax has been secondary.

The € is the elephant in the room at the core of all this.

TMH but it’s all going to be OK as Valls wants a decent devaluation to make his exports more attractive, never mind the immediate inflationary shock of increased energy prices etc vs static wages.

…and he want les rosbifs to stop calling him “left wing and anti business” 😉

jambalaya – Member

Cameron was elected as he wasn’t Brown.

And yet despite not being Brown he couldn’t win the election. Staggering isn’t it ?

aracer – Member

Though how do you know that he wouldn’t be even more unpopular had he carried on pretending?

I don’t know. In fact my abilities are so limited that I can’t be sure of anything beyond what has actually happened.

What I do know is that Hollande has moved more and more to the right and he is now considerably less popular than he was. I’m sure of that.

Causation? 😉

You know I’m easily confused ernie – thanks for the clarification that you weren’t trying to connect the two.

Read the post again THM :

He has in fact moved more and more to the right. Has this translated into greater approval ratings ? Not at all in fact the complete opposite, ie, he is now considerably less popular than when he was pretending to be left-wing.

Moving to the right has not translated into greater approval ratings for Hollande. We can be fairly sure of that.

Thanks for repeating it Ernie. Still not clear that the two are linked. He has changed his bed partner and his popularity hasn’t improved is about as relevant.

His approval ratings reflect his incompetence. Then again watching Sarkozy at the moment! it desont look good either way. Mes pauvres amis!

But to repeat, I think political allegiances are less relevant than at any time. They are stuck with the same problems with no easy solution and no guide book of how to get out of it. On top of that, they have the €. Les pauvres.

It’s not really hard to understand THM. jambalaya pointed out that Hollande is deeply unpopular, and you pointed out that he has reformed numerous U-turns.

I pointed out that despite moving more and and more to the right Hollande approval ratings have not increased, in fact the opposite has happened – he is now more unpopular than ever. It is a perfectly fair point to make.

Obviously that doesn’t sit too comfortably with right-wingers like you and jambalaya who would prefer to portray him a leftie.

EDIT : btw THM do yourself a favour and drop the pretentious french speak, it makes you sound like Del Boy

What I do know is that Hollande has moved more and more to the right and he is now considerably less popular than he was. I’m sure of that.

You’ve got the wrong cause and effect there. It’s bit like saying putting your umbrella up causes it to rain. He is unpopular as his policies aren’t working, so he’s changing them to ones that have a shot.

As I posted above if running a prudent spending policy is right wing then classify it as such but any working class housewife will know how the run a budget. He is unpopular because he has failed abjectly to deliver the economic miracle he promised the left (and in fact his voters are all worse off), his laisse-faire approach to immigration has seen huge defections from the far left to the far right and of course the right wing voters in France (not really right more center-ist in UK terms) always thought he was an idiot. Plus he’s been spending 500,000 euro a year of the state’s money keeping his girlfriend as “first lady” whilst nipping out every night on a scooter to see his mistress.

And yet despite not being Brown he couldn’t win the election. Staggering isn’t it ?

Well he got closer than Labour to a win and from the polls he’s going to do better this time.

Well he got closer than Labour to a win and from the polls he’s going to do better this time

I am a Conservative voter but which polls ?
All i see of either of the 3 major parties at the mo is them all trying to tear themselves apart – except the lib dems, the electorate will do that for them ….

Apparently British Cycling now has more members than the conservatives ….

His views are almost always at odds with reality/facts

JY Scottish Referendum ? 😉 My views are at often at odds with the accepted STW standpoint in a number of areas, not least in that I seem to agree with Government policy quite a lot both at home and abroad.

@andyfla Poll momentum with the Tories I think. Party funding these days is more about donors than members. I suspect the Tory party has more £ than British Cycling

There’s an interesting conflation of popularity/personal rating and electability, which is often more connected with other ratings like economic competency and statesmanship. Nor does short term populism equate to good policy in the longer term.

Does anyone actually know how income tax actually works in France? Or is this thread just lots of hot air mostly about politics from people who are not aware how individuals, or say groups of individuals living under the same roof ( :wink:) pay their income tax? and what they actually get as a result of paying their income tax, compared to say other near-shore members of the EU? Or am I getting into semantics?

I would actually like to learn something, which is why I started reading this trhead, as it is quite relevant to me (and maybe more than most of you who may/ may not know what you are talking about), but unfortunately it all is ‘a bit high up’ for me to disseminate sufficiently……

Since when have the Belgians spoke French? or at least more so than English?

I haven’t read the last two pages but BigDummy’s posts about executive pay piqued my interest.

I personally think there is no causation between low income tax rates and growth in high earners incomes. This is much more to do with the growth of private equity. Managers of private equity backed companies can make multiple millions, therefore FTSE CEO argue they should have equivalent compensation to stop them jumping ship to a PE house. I don’t propose to argue the merits of this argument but I think it is the driving force.

Why has private equity become so important? Because the post-tax cost of debt is cheap compared to equity – before the crisis this was principally driven by Gordon Brown’s raid on pension funds and is one of those unintended consequences. By abolishing the tax credit he massively changed the relative cost of equity to debt to the detriment of equity. Hence debt become dominant. To those of a more technical bent, we became much more of a classical taxation system. If you look at classical systems, as opposed to imputation systems, they invariably have a higher level of corporate debt, hence the ubiquity of the leveraged buyout in the US, a classical system, and the UK, a predominately classical system.

Ernie, perhaps if you also chose to read, I have made the point that politics in this regards is largely irrelevant. It’s “absurde” to suggest that Hollande is not left wing – albeit not excessively so. But the policy mix across Europe is very confused and it is also true that we have weird situations where LW-ish parties are implementing policies that are generally considered RW and vice versa. However, you only have to look at the subject or the thread and see what Hollande tried and failed to do to falsify any idea that he is right wing.

If he was, why would Valls be pleading not the be called LW?

As an aside, GO relaxation of austerity does put his policy mix in an interesting spot.