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A Capitalist Revolt in Socialist France
Wolf Richter www.testosteronepit.com
The French government is trying to reign in its deficit by jacking up taxes, including the capital gains tax, which it wants to bring to the same level as the tax on income earned by the sweat of your brow—an old philosophical pillar of the French left. But an explosive essay published last Friday hit a nerve with entrepreneurs, venture capital investors, artisans, and mom-and-pop business owners. And their anger, which spread across the social media, the papers, and finally TV news, turned into an open revolt.
The trigger was an editorial in La Tribune by John-David Chamboredon, Executive President of ISAI, an internet startup fund. After the Finance Law 2013 was proposed during the presidential elections, he wrote, “la France du business stopped breathing.” Investments and hiring were put on hold. The cause: the capital-gains tax provisions. An entrepreneur, for example, who risked his savings, spent 10 years growing his business, created perhaps hundreds of jobs, survived all the challenges, and then wanted to cash out, would have to pay two layers of taxes on the capital gains, totaling, according to his calculations, 60.5%. And so would investors.
It would kill entrepreneurship. Funding for startups would dry up. And growth in the private sector would wither. “If the fiscal maelstrom is confirmed, the sequence of events is quite clear,” he wrote. “Instead of hiring people and developing the business, owners threatened by this confiscation would spend the rest of 2012 imagining ways to escape it.”
There are legal ways, he said, for example by creating a holding company in Luxembourg that would retain the shares of the startup, or by relocating top management to London (which is rolling out the red carpet). Startups funded by large funds could do this. Small operations would be stuck in France. For them, it’s going to be tough. And it would put a damper on job creation in France, he said.
Articles in La Tribune are normally tweeted a few times and liked on Facebook a few more times. But this one was tweeted 1,576 times and liked 5,601 times. Over the weekend, it gave rise to the movement of the Pigeons—which in French also means “sucker.” The revolt of the bosses was born.
“We are the result of the anti-economic policy of the government that has decided to take the thousands of entrepreneurs in this country for suckers (pigeons) and annihilate entrepreneurship,” their manifesto explains. And a demonstration of the bosses in front of the National Assembly was organized on Facebook for October 7.
Anger against the “fiscal overkill” continues to grow. Entrepreneurs and those who invest in them see this law “as an act of vengeance by those who run the government or who live off it!” said Philippe Villin, an investment banker close to the entrepreneurs. “The France that is taking risks and is investing their own money in the jobs of tomorrow, and might lose everything, has the feeling of being rejected by the France that is more protected,” added Agnes Verdier-Molini, Director of iFRAP, a public policy think tank.
Money is already drying up. “We had three deals going. Since Friday, everything is suspended, because with taxes this confiscatory, it doesn’t work anymore for the business leaders,” said Bertrand Rambaud, President of Siparex, an investment fund.
“La France du business stopped breathing,” as Chamboredon wrote, has already occurred. The Services Activity Index dropped to an 11-month low. Orders plunged, and companies responded by cutting their work force at the fastest rate since December 2009. The Draghi-Bernanke effect kicked them in the teeth with higher input costs that they couldn’t pass on. And the Composite Index, which combines the service and manufacturing indices, plunged to 43.2, the lowest since March 2009—the depth of the financial crisis.
It couldn’t have come at a worse time for President François Hollande. Since his election in May, according to the latest poll, voter confidence in his ability to handle the crisis dropped from 55% to 41%. And those who were “not confident” shot up to 56%. He has become unpopular in less than six month—which in France has never happened before.
He can’t afford an open revolt by small business owners—or the label “anti-startup,” when unemployment is at a 13-year high, and when every job counts. So the government decided to do some fence-mending. It has offered to listen to the “Pigeons” and apparently is studying “solutions” to the capital-gains tax debacle to “return to the situation as it was before.” And unnamed members of the government might perhaps negotiate with the Pigeons—who in return cancelled the demonstration.
The Paris auto show, which took place at the same time, should have been exciting. Over 100 new models. Chicks next to some of them. Nausea-inducing colors, downsized motors. Something for everyone. But it had been preceded by supplier events loaded with the dire verbiage of an industry on a death march. Particularly in France, whose private sector is veering into economic fiasco. And now it became official. Read..... Worse Than The Infamous Lehman September: France’s Private Sector Gets Kicked Off A Cliff.
And here is Chriss Street’s Global Militarization Follows “9/11 Squared.” On 9-11, the US’s role to provide peace in the Western World was challenged for the first time since the collapse of the Soviet Union, he writes. But with the assassination of America’s Ambassador to Libya, that role was terminated. Read the article here.
As for me, it all started in France ... with a Japanese girl—a “funny as hell nonfiction book about wanderlust and traveling abroad,” a reader tweeted. Read the first few chapters for free on Amazon, where it’s one of the bestsellers under Japan.... BIG LIKE: CASCADE INTO AN ODYSSEY.
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We had a bad badge here in the county a while back...he was encouraged to take "disability."
At least we got rid of him.
'Americanism' is all about the group. Just telling that you can take an 'american' government job, just like that, is forgetful of that fact.
It is like the military. Just spend a few times observing what happens at the exit of a recruitment bureau. On the way out, some 'americans' cry out. They are the ones who just have been rejected.
Very often, 'americans' who moan about their 'american' government job, are just 'americans' who were rejected when asking one.
'Americanism', it is all about situational, on what side of the fence you are standing.
Chinese Shitizenism is all about the poop!
It's like trying to find a job as a dishwasher in a roadside dive serving dogs. Didn't get the job? Cry out.
Very often, Chinese Shitizenism is all about situational awareness on the side of the road. On what side of traffic are you standing when your pants are down?
.
Indeed, this is a primary focus for those living in the turd world.
Confusious say: "One who woks his neighbour's dog learns the benefits of good citizenism."
Customary practice is for Chinese citizenism citizens to squat on the dung-hand side of the road.
You took the words right out of my US 'american' Citizenism citizen mouth.
Make me laugh!
Nah, it's just our eternal nature.
ROR
I don't know about you, but I derive a great deal of satisfaction from being a member of the US 'american' king class.
I do as well. I have room to breathe.
What is the "king class" again? 'Cause I still gotta get up and work tomorrow. I've had a few beers, and I didn't even watch the Clown Show debates. (Ix-nay on the ube-tay 4 years running)
Intoxicologist asked:
Ah, seldom do people realize the demands placed upon royalty. Every day, we members of the "king class" must arise, gaze upon our kingdom, and issue commands to the peasantry. Our work is never done, as these peasants, beset with great poverty or great wealth, could scarcely survive without our guidance.
Such is the US 'american' citizenism "king class" citizen's burden.
Never thought I would agree with anything you ever wrote, but, actually, you are at least half right in this case. Our entitled overlords believe that they are perfectly justified taking money from us twice a year by threat of overwhelming physical violence (guns, SWAT, etc.) even though we make far, far less, to stuff in their already grotesquely overstuffed pockets, wallets, pension accounts, faces, etc.
They are nothing but extortionists. Protection racket. ("Hey, nice home/business you have here. Be a shame if something happened to it. You know, for just two thousand dollars a year, we can make sure you get to stay here. Otherwise, well, uh, you know, some people with guns might come in here and take it from you. [Actually, I understand that people elsewhere in the country have to pony up a couple grand A MONTH in vig to keep their houses "safe.")
It's gonna get bad, folks. The cops, teachers, fire creatures, librarians, code inspectors, administrators, et al., are not going to give up until they've taken everything - EVERYTHING! - not nailed down to steal and stuff into their greedy, never satisfied maws.
More blind bigotry, more naked assertions, more idiotic anti-American prejudicial gibberish and hate.
Yes, AnusMonotonous is back in his magical lightning-powered time-traveling flying rickshaw of Benjamin Franklin inventionism of US 'American' fabled past, blobbing-up the space-time continuum and offuscating the monolization of the speeching means.
Make me laugh!
What's a reverse guillotine called?
A Garrote.
We'll all be dependent on government sooner or later. That's the plan.
France is so fucked up that even francophiliac scumbags like Roman Polanski, Johnny Depp and Carla Bruni are packing their Louis Vuitton bags and heading for the exits.
Polanski's in jail in Switzerland. The Swissys finally gave in to US pressure. He made a GREAT film though: Carnage (based on a play)
yea, when the very people that advocate socialism leave, ha fucking ha.
about the story ina nutschell. I have a fucking plan for you; but bend over first...
this fucker(elpresidante)will give them a lip service job and cater to the ptb and same fucking story; bankster and begging at the ecb withdrawl window...
"He has become unpopular in less than six month—which in France has never happened before."
I am reading The Lords of Finance. According to that book it has happened before. In the 1920s. In France. Like modern Japan.
Stop fact checking. It fucks everything up.
The late twenties and the thirties were like that in France. A series of ambitious, corrupt and bumbling prime ministers rotated through the position like a game of musical chairs. Then the music stopped when the Germans took over. The Prime Minister in the chair at that time stayed throughout the war and was hanged at it's end.
Good times.
History is for pussies and fags.
Stupid French.
I bet they don't even have a word for entrepreneur in French talk.
(Ba-dump-bump-ppssssssssssssssssshhhhhhhhhhh)
Hello? -tap-tap- Is this thing on?
The word entrepreneur Is French
Thanks Ace!
iFRAP ??
Isn't that between .4 and 40 percent of US GDP?
Producers leave.....Muzzies stay. Should be a party.
I don't buy it. La gloire de France est departé longtemps. Non?
Viva la France.
I didn't know that John Galt was french! That explains it.
No, that was de Gaulle, as in
Charles de GaulleHe goes by the name of Jean Gaultier over there.
He's Gaulish?
A socialist rose by any other name still smells like crap.
A rose by any other name
still gives you hayfever.
OMG +1
I hope they show some spine and either leave or start using Bitcoin.
Bitcoin sucks. Who want's a hackable currency? No thanks.