Wednesday, August 27, 2008
Nicolas Sarkozy has decided to impose a 1% tax on capital--dividends and rental income--to finance the Revenu de Solidarité Active (RSA). This is a stunner. It not only rescues Sarkozy's promise to institute the RSA but also turns the tables on those who have accused him of being an American neocon hidden behind aviator sunglasses. Tax capital to pay for a welfare program!! Why, the very idea stands neocon political economy on its head. It is also an incredibly astute political move as the Socialists maneuver in advance of their convention. It undercuts their most potent attack against Sarkozy, that the TEPA was a giveaway to the rich whose cost has hamstrung government action on other fronts. It sets the tone of la rentrée politique and reinvigorates Sarko's presidency at a moment when some sort of tonic is sorely needed. A very interesting move.