As a general rule, it’s not right to take pleasure at the misfortune of others.
But I think we’re allowed an exception to that Schadenfreude rule when the “others” are greedy politicians pursuing spiteful policies. We want the political elite to suffer misfortune because of our desire to promote freedom and prosperity for ordinary people.
With that in mind, I have a big smile on my face because Francois Hollande’s class-warfare tax policy in France is a bigger failure than even I predicted it would be.
I’m particularly happy that the geese with the golden eggs are flying away. And the flock seems to get bigger every day.
Here are some amusing excerpts from a story in the Financial Times.
New evidence of top French executives leaving the country has emerged as President Francois Hollande battles a stalling economy and tumbling approval ratings. Two senior executives at Moet Hennessy, the champagne and cognac arm of the LVMH luxury group, are moving to London from Paris and the head of Dassault Systemes, the software arm of Dassault Aviation, said some senior managers of his company had left and he was considering following suit. …The news follows Mr Arnault’s own application for Belgian citizenship, leaked last September, which poured fuel on a fiery debate in France about entrepreneurship, patriotism and high taxes.
Yup, just like Joe Biden, French politicians want people to think it’s patriotic to give more money to wasteful and incompetent politicians.
And then they have the gall (no pun intended) to complain when the intended victims decide they don’t want to cooperate in their own disembowelment.
You can see why I have a smile on my face.
While I’m happy that some people are escaping Hollande’s punitive tax grasp, there are plenty of victims that can’t escape. France’s economy is in the toilet and millions of ordinary people are suffering.
Figures released on Monday showing a worse-than-expected 1.2 per cent fall in industrial production in January over December underlined the grim outlook facing Mr Hollande, whose approval ratings have fallen this month to as low as 30 per cent. The economy went into reverse in the last quarter of 2012, unemployment has hit 10 per cent of the workforce
Not surprisingly, the politicians are not learning any lessons. They either have their heads buried in the sand or they lash out at those who offer constructive criticism.
The government has denied claims of a tax exodus and denounced as “French bashing” criticism such as the declaration last month by Maurice Taylor, head of tyremaker Titan International, that he would be “stupid” to buy a French factory.
Hollande and his cronies can pretend that successful taxpayers aren’t escaping, but reality will hit them over the head when they count how much tax revenue they receive this year and next year.
In other words, we’re going to see an interesting Laffer Curve experiment.
We saw in America that rich people paid a lot more to the IRS when Reagan lowered their tax rates in the 1980s.
Francois Hollande is trying to run the same experiment, only in reverse.
Anybody want to take a wild guess how that’s going to turn out?
P.S. As shown in this remarkable chart, the real problem in France is that government is far too big. And if the public sector is consuming more than 50 percent of a nation’s economic output, it’s impossible to have a good tax system.
Some big-government nations – such as Sweden and Denmark – try to minimize the damage of high tax burdens, but there’s no way to have a non-destructive tax system when the government wants to take half of what people produce.
And France is trying to maximize the pain rather than minimize the pain, so it’s a safe bet that Hollande’s policies won’t end well.
P.P.S. The debacle in France helps explain why we should celebrate tax competition. The fact that entrepreneurs can migrate to nations with better (or less worse) tax systems is a valuable way of penalizing politicians that impose bad policy.
[…] to the United States. Along with ambitious and skilled people from nations such as Italy, France, and Sweden (though our welfare state is very expensive, so I admit I’m just […]
[…] tax system is a nightmare, leading entrepreneurs to escape to other nations (hardly a surprise when tax rates can exceed 100 percent and politicians equate […]
[…] they’re avoiding France for the same reason that entrepreneurs are avoiding France. The tax burden is […]
[…] lots of young entrepreneurs also are escaping, which further exacerbates the nation’s long-run […]
[…] have a big impact. Migration patterns can alter the economic vitality of a jurisdiction. I’ve written about the exodus of French entrepreneurs who move to other countries with better tax systems, and the […]
[…] and come to the United States. Along with ambitious and skilled people from nations such as Italy, France, and Sweden (though our welfare state is very expensive, so I admit I’m just guessing at nations […]
[…] and come to the United States. Along with ambitious and skilled people from nations such as Italy, France, and Sweden (though our welfare state is very expensive, so I admit I’m just guessing at nations […]
[…] and come to the United States. Along with ambitious and skilled people from nations such as Italy, France, and Sweden (though our welfare state is very expensive, so I admit I’m just guessing at nations […]
[…] and come to the United States. Along with ambitious and skilled people from nations such as Italy, France, and Sweden (though our welfare state is very expensive, so I admit I’m just guessing at […]
[…] – that productive people already are fleeing France. Hollande’s punitive tax policy has driven many of them to other nations. French entrepreneurs in particular have flocked to […]
[…] https://danieljmitchell.wordpress.com/2013/03/13/more-entrepreneurs-say-au-revoir-to-the-administrati… […]
[…] of the nation’s most capable people are escaping – ranging from movie stars to top […]
[…] This is amazing evidence of the liberalizing impact of tax competition. New Jersey’s state legislature is dominated by leftists, yet even they realize that they won’t get any loot if their intended victims can move across states lines (a lesson that French politicians have a very hard time understanding). […]
[…] This is amazing evidence of the liberalizing impact of tax competition. New Jersey’s state legislature is dominated by leftists, yet even they realize that they won’t get any loot if their intended victims can move across states lines (a lesson that French politicians have a very hard time understanding). […]
[…] Meanwhile, those with high skills will continue to escape the country. […]
[…] fully since there are varying amounts of tax competition between nations, both for investment and people) from the consequences of their reckless […]
[…] imagine that folks escape France and Italy because of excessive taxation, while they leave the other countries because of a desire […]
[…] imagine that folks escape France and Italy because of excessive taxation, while they leave the other countries because of a desire […]
[…] are any serious reformers in France, they face an uphill battle. As I’ve previously noted, many successful people and aspiring entrepreneurs have left […]
[…] any serious reformers in France, they face an uphill battle. As I’ve previously noted, many successful people and aspiring entrepreneurs have left […]
[…] What are the French advisers going to do, propose ways to make the government even bigger? Suggest ways of driving even more entrepreneurs out of the country? […]
[…] as we saw in France, high tax rates drive out highly productive people, and we have good evidence that […]
[…] as I applaud French entrepreneurs, American companies, Italian boat owners, Spanish movie patrons (and porn aficionados), […]
[…] This has to be a kick in the gut to the class-warfare crowd. Even a total statist like Hollande is unfurling the white flag and admitting that it makes no sense to impose policies that are so punitive that some entrepreneurs even left the country. […]
[…] competition among nations. I want greedy politicians to be haunted to at least some degree by the fear of tax flight so that they will think twice before imposing new burdens. But that’s a subject we’ve […]
[…] competition among nations. I want greedy politicians to be haunted to at least some degree by the fear of tax flight so that they will think twice before imposing new burdens. But that’s a subject we’ve […]
[…] […]
[…] of the nation’s most capable people are escaping – ranging from movie stars to top […]
[…] Maybe this makes me a bad person, but I’ve openly admitted to a perverse sense of happiness at the misfortune of others when, for instance, France’s class-warfare tax policy backfired because successful taxpayers emigrated. […]
[…] Maybe this makes me a bad person, but I’ve openly admitted to a perverse sense of happiness at the misfortune of others when, for instance, France’s class-warfare tax policy backfired because successful taxpayers emigrated. […]
[…] We know that countries suffer when taxes get too high, in part because investors, entrepreneurs, and other successful taxpayers escape to jurisdiction with less oppressive fiscal regimes. France is a glaring example. On steroids. […]
[…] nice person (notwithstanding my high score for tenderness in a recent test), but I can’t help but be happy when I read bad news about fiscal policy in high-tax welfare […]
[…] be interested in escaping to the United States if they had the opportunity. And successful people already have been leaving the country because of punitive tax […]
[…] penalize those pulling the wagon, bad things happen. Doesn’t matter whether you’re looking at France or […]
[…] person (notwithstanding my high score for tenderness in a recent test), but I can’t help but be happy when I read bad news about fiscal policy in high-tax welfare […]
[…] the same thing happens internationally, as France’s greedy politicians are now […]
[…] been more than three weeks since I targeted French fiscal policy for abuse and more than one week since I wrote something negative about the French fiscal […]
[…] penalize those pulling the wagon, bad things happen. Doesn’t matter whether you’re looking at France or […]
[…] those pulling the wagon, bad things happen. Doesn’t matter whether you’re looking at France or […]
Hi from a French entrepreneur that is settling down in the beautiful Mauritius islands. I am selling a software on the web and it is very easy for me to move with my business, except that I have to fire the 4 employees (will be easily replaced here).
All taxes included (except VAT) basically I was taxed around 60% before Hollande, more than 75% after Hollande (and the brand new social tax on dividendes, genius!) and in Mauritius it will be less than 10% YEAH!!! Notice that I was ok with 60% until now but with 75%+, I went on the other side of Laffer curve thanks to Hollande!
Frankly my impression is that France is finished, this is my country, this is sad to say, but it is absolutely hopeless. Wrong government wrong timing. The economy is collapsing, only entrepreneurs could save the situation but Hollande and all socialist hate them and as a direct consequence 50.000 job are lost every months!! Soon (I’d say before 2014 Q4), the very serious problem will occurs (debt interest rate growing up insanely, very large company bankerout…) and socialists will still blame the rich, you’ll see that!
[…] https://danieljmitchell.wordpress.com/2013/03/13/more-entrepreneurs-say-au-revoir-to-the-administrati… […]
…and yes, why shouldn’t the rest of the world get access to American wallets, including the wallets of the occupy protesters and other “oppressed” groups who are really in the top 15% of wealth on a worldwide scale?
With France facing a decline of its own making…
The total number of Europeans that support democratic access to German wallets (and a few other northern countries) has now become a strong majority. All they need is voting power over those wallets and Germany is going down too at a fast rate (as opposed to its current controlled decline where it is growing on a 1-2% growth trendline in a world that is growing by 4-5% i.e. 3% annually compounding deficit only!).
And all indications are that the people of Europe will get this voting power over German wallets. After all, why shouldn’t they? If a less competent German person has a social democratic birthright to the wallets of more competent people, why shouldn’t a not so competent, Greek, Italian, Spaniard or French have the same birth-right as a European? How long will the German attitude of “Socialism for me but not for thee” last?
The “needy” majority of Europe has already started accumulating indirect voting rights over German wallets. Indirectly elected or appointed politicians such as Mario Draghi, the European commission, the European Parliament, and various other pan-European bodies are already indirectly socializing German wallets in slow motion.
Germans cannot eventually escape the fate of their wallets being controlled by a pan-European electoral majority, unless Germans themselves are the ones who initiate leaving the European Union, and there is too much accumulated momentum towards the hope of integration as a path to prosperity in the German psyche.
I see it unlikely that Germans will reach escape velocity from an ever more redistributive EU. Their wallets will be pan-Europeanized.
Wow ! Two guys said they leave France and the Conservative pundits are speaking of exodus ! What a jock of blog you are !
Now if only Peugeot would return to the North American market with a new plant in low-tax Texas, Conservatives would have even more evidence for the Liberal Left to ignore.