Even though he is a foolish statist, I wanted Francois Hollande to win the French presidency. Sarkozy was a statist as well, after all, and my “Richard Nixon Disinfectant Rule” says that it’s better to have the out-of-the-closet statist prevail in such contests in hopes that the supposedly right-of-center party can then regroup and offer voters a true choice in the next election.
But I have another reason for wanting Monsieur Hollande. Simply stated, we need role models. Not only role models to show the effects of good policy (like Estonia and Hong Kong), but also clear-cut examples of nations that do the wrong thing.
I fully expect France to be that kind of role model over the next few years. Particularly if Hollande follows through on his scheme to push the top tax rate to 75 percent.
I’ve already written about the experiment America conducted in the 1980s, when Reagan lowered the top tax rate from 70 percent to 28 percent. Hollande wants to conduct a similar experiment, but in reverse.
Indeed, we’re already seeing the potential impact of class-warfare tax policy in France. Here are the key passages from a report in the Financial Times.
Wealthy French people are looking to London as a refuge from fresh taxes on high earners pledged by candidates in the country’s presidential elections. The “soak the rich” rhetoric that has punctuated the presidential campaign has prompted a sharp rise in the numbers weighing a move across the Channel, according to London-based wealth managers, lawyers and property agents specialising in French clients. François Hollande, the Socialist candidate…, wants to impose a tax rate of 75 per cent on income above €1m… Inquiries from French clients had risen by roughly 40 per cent since the speech, says David Blanc, a partner at Vestra Wealth, a London-based wealth manager. …The prospect of a Gallic diaspora of high earners was backed up by Knight Frank, the property agent, which said numbers of French web users searching online for its prime London properties online in the past three months had risen 19 per cent compared with the same period last year. The equivalent figure for Europe as a whole fell 9 per cent. …Mr Blanc says some French clients were even contemplating acquiring British or other nationality in order to safeguard assets from fears that France could move to collect more tax from citizens overseas. “A lot of people are extremely worried,” he said. Alexandre Terrasse, a partner in corporate and property law at Jeffrey Green Russell, says he had seen a 25 per cent rise in activity from French clients over the past six months, “The 75 per cent tax is clearly a sign that the politicians will hit the wealthy and they don’t want to have to deal with that.”
In other words, just a productive people “vote with their feet” by escaping from high-tax hell-holes like California to zero-income-tax states such as Texas, the same phenomenon exists for people crossing national borders.
This means Mr. Hollande is going to learn an interesting math lesson: 75 percent of zero is a very small number.
The Laffer Curve lives! And left wingers who pretend it doesn’t exist learn very unhappy lessons.
P.S. Here’s a good joke about Texas and California, and here’s a serious post about the differences between the two states.
[…] escape high-tax jurisdictions, whether we’re looking at New Jersey and California, or France and the United […]
[…] I had some very good (or should I say bad?) options for that award, including the Supreme Court’s Obamacare decision, the IRS’s lawless decision to make American banks act as tax collectors for foreign governments, Japan’s higher VAT tax, the California vote for a class-warfare tax hike, and France’s 75 percent income tax rate. […]
[…] The article continues with some observations about how the geese with the golden eggs are tired of being mistreated. […]
[…] other successful taxpayers escape to jurisdiction with less oppressive fiscal regimes. France is a glaring example. On […]
[…] other successful taxpayers escape to jurisdiction with less oppressive fiscal regimes. France is a glaring example. On […]
[…] Was it the French government’s punitive decision to impose a 75-percent top tax rate? This is a spectacularly misguided policy, and it’s already resulting in an exodus of […]
[…] predicted back in May that well-to-do French taxpayers weren’t fools who would meekly sit still while the hyenas in the political class confiscated ever-larger shares of their […]
[…] already posted about productive people escaping France, so that’s not exactly a new […]
[…] Well, the same thing happens internationally, as France’s greedy politicians are now learning. […]
[…] already posted about productive people escaping France, so that’s not exactly a new […]
[…] predicted back in May that well-to-do French taxpayers weren’t fools who would meekly sit still while the hyenas in the political class confiscated ever-larger shares of their […]
[…] particularly happy that the geese with the golden eggs are flying away. And the flock seems to get bigger every […]
[…] already written about French entrepreneurs and investors leaving the country because of Hollande’s class-warfare tax agenda. It’s gotten so bad that even Hollywood types […]
[…] Was it the French government’s punitive decision to impose a 75-percent top tax rate? This is a spectacularly misguided policy, and it’s already resulting in an exodus of […]
[…] Was it the French government’s punitive decision to impose a 75-percent top tax rate? This is a spectacularly misguided policy, and it’s already resulting in an exodus of […]
[…] already written about French entrepreneurs and investors leaving the country because of Hollande’s class-warfare tax agenda. It’s gotten so bad that even Hollywood types […]
[…] Now, it’s the nation’s most famous actor. Gerard Depardieu has officially announced – in a letter to France’s thuggish Prime Minister – that he is tired of paying 85 percent of his income to finance the vote-buying actions of France’s kleptocratic political elite. […]
[…] Jersey as low-tax states, a point that even the host thought was a bit kooky. I guess this means France is a low-tax country in Jared’s fantasy […]
[…] Now, it’s the nation’s most famous actor. Gerard Depardieu has officially announced – in a letter to France’s thuggish Prime Minister – that he is tired of paying 85 percent of his income to finance the vote-buying actions of France’s kleptocratic political elite. […]
[…] predicted back in May that well-to-do French taxpayers weren’t fools who would meekly sit still while the hyenas in the political class confiscated ever-larger shares of their […]
[…] predicted back in May that well-to-do French taxpayers weren’t fools who would meekly sit still while the hyenas in the political class confiscated ever-larger shares of their […]
[…] predicted back in May that well-to-do French taxpayers weren’t fools who would meekly sit still while the hyenas in the political class confiscated ever-larger shares of their […]
[…] at stake, now let’s mock Hollande’s latest bright idea. I’ve previously highlighted his support for a 75 percent income tax rate on the so-called rich. Well, he also wants to increase the wealth tax so that the French government […]
[…] already posted about productive people escaping France, so that’s not exactly a new […]
[…] already written about French entrepreneurs and investors leaving the country because of Hollande’s class-warfare tax agenda. It’s gotten so bad that even Hollywood […]
[…] largely has pursued a statist agenda of higher taxes and more wasteful spending since taking office, which is par for the course, but I will give him credit for cutting back on […]
[…] Jersey as low-tax states, a point that even the host thought was a bit kooky. I guess this means France is a low-tax country in Jared’s fantasy […]
[…] The nation’s dwindling productive class, meanwhile, will get even smaller since we’re already seeing evidence that investors and entrepreneurs are going to escape to other nations with less punitive tax regimes. […]
[…] as well!In reality, the Laffer Curve will kick in because France’s dwindling productive class isn’t going to passively submit as the political jackals start looking for a new meal.But while France is driving into a fiscal […]
[…] reality, the Laffer Curve will kick in because France’s dwindling productive class isn’t going to passively submit as the political jackals start looking for a new […]
[…] Jersey as low-tax states, a point that even the host thought was a bit kooky. I guess this means France is a low-tax country in Jared’s fantasy […]
[…] wonder so many investors and entrepreneurs are looking to move to places where hard work and success are rewarded rather than […]
[…] also lots of evidence of taxpayers escaping countries controlled bypoliticians who get too greedy. Mr. Saverin is just the latest example. And I […]
[…] also lots of evidence of taxpayers escaping countries controlled bypoliticians who get too greedy. Mr. Saverin is just the latest example. And I […]
[…] there’s also lots of evidence of taxpayers escaping countries controlled by politicians who get too greedy. Mr. Saverin is just the latest example. And I […]
I love the way Milton Friedman used to look at countries in his film “Free to Choose” and show what their experience has been. Dan, you are so good at doing the same!!!!
Over and over in the past Max Brantley and his liberal friends at the Arkansas Times have said that they don’t want budget cuts but they want taxes raised on the rich. In France their recipe for success is about to be tried and we will see how it works out.
The Arkansas Times blogger going by the username “Outlier” noted:
“Nothing like doubling down on a bad bet considering all the evidence coming out of Europe on the failures of austerity. Way to go repubs!”
__________
We will see how that experience in France works out.
[…] The Geese with the Golden Eggs Are Preparing to Escape France […]
I never liked Sarkozy. I welcome Hollande.
Genuinely curious as to how well the Nixon Rule has worked in Britain. Cameron doesn’t strike me as much more conservative then Tony Blair despite Brown’s brief rule. Was Brown not liberal enough to provoke a stronger backlash? Or am I selling Cameron short?
Well we clearly need one world-wide tax system so that these rich people can’t escape paying their fair share!
While in theory I agree with you about the salutary effects of lessons learned (and relearned), politicians never seem to learn; look at Pres. Obama’s plans to raise taxes in the land of Reagan.
To paraphrase; wisdom is wasted on politicians.