Tuesday, November 2, 2010

Joly: Tax the Rich

Eva Joly has unveiled her program for a return to "budgetary reality," and it features increased taxes on the wealthy, who she claims pay the lowest income tax rate in Europe (my italics, intended to signal the relative unimportance of the income tax in France). She calls for an income tax rate of 50% on those making more than 70,000 euros per year. She would also get rid of le bouclier fiscal, the reduced VAT on restaurant meals (does anyone think that achieved anything?), and the mortgage interest credit.

Not a bad program, to be sure, but a surprisingly modest one for a potential third-party candidate. One might have expected something bolder from this corner of the political spectrum, where the imagination is less fettered by the exigencies of coalition. Indeed, I expect something bolder from Sarkozy next year, since he has no other ammunition left. If the Left seriously wants the presidency, it should make a real effort to get there first with more. Can the PS go beyond Joly's modest start?


Kirk said...

There's something odd how the French know that income tax is far from being the only tax they pay, yet they still fall for the old raise/lower income tax trope. When half the people in the country don't pay _any_ income tax, the fact that they'll then vote for someone who claims to want to lower income tax is surprising.

Regarding Joly's proposal, correct me if I'm wrong, but the income tax is the only tax that can be adjusted according to whether one is rich or poor. In other words, unless they were to bring back the 33% VAT on "luxury" items (such as diamond rings and records; go figure...) there's no other way to tax the rich.

Oh, but wait... They do pay more taxes on interest income (nearly 10%), on property they own (because rich people own more property), and there's that thing called the wealth tax...

Kirk said...

Oh, one more thing. I was curious to see what the marginal tax rate was for people earning that much money. Turns out it's already 40%, so raising another 10% isn't a lot.


And, when you consider that that is the _highest_ marginal tax rate, and that it's really not _that much_ income (two decently paid jobs could easily reach that amount), it's probably not a very good idea. I'm not sure that with income at that level people are considered "rich."

FrédéricLN said...

In today's Le Monde, a materpiece by Jean Peyrelevade.

On a rigorous post-barriste tone, "Imposer le capital, une idée simpliste", he cannonades the leftist illusions about "faire payer les riches", have the richest pay for all, ... but in the same movement, he suggests increasing taxes on capital incomes by +80%!!!


Anonymous said...

In my opinion, a problem with France is how low the salaries are. I know it can be argued that it's okay since they don't have to bear the cost of higher education and health care (although outside the handful of public grandes ecoles, the Ecoles charge tuition and have very few scholarships so "free higher education" doesn"t totally hold unless you're willing to send your kid to one of these dreadful-looking places called "universités").
However, the median income for a person is E1,500 and for a family it's E 2,300.
(People with master's degrees may begin around E1,500-1,800, some in the public service at E 1,300!)
It corresponds to about E6,000/month - I only found figures for E 4,000/m, which represents the top 5% of salaries.
So the highest tax bracket isn't "rich" but it's definitively very very high compared to the average French household.
In this sense, Joly is saying "Those who earn more than 95% people in the country should pay more taxes". (In fact, if I recall correctly, 10 years ago, they used to. I don't know whether going back to 10 years ago is a good idea though.)