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Here Is Who Gets Taxed To Fund The French 'Fairness Doctrine' Socialist Dream

Tyler Durden's picture





 

As we discussed earlier, the French budget  can be summed up as state spending will be frozen (not cut), tax and social contribution increases for households, and companies will see approximately 8% of their current after-tax profits vacuumed up by the government. But it is high-income earners that face a sharp adjustment. On the household side, SocGen notes the flagship measures will be: a new 75% income tax on incomes of €1 mln or more, the Wealth tax (ISF) band to return to the status quo ante (before Mr Sarkozy), the taxation of capital income in line with labor income, and new limits on tax breaks or the freezing of the income tax schedule (except for low income earners). The government expects income tax receipts to increase from €59bn in 2012 to €72.6bn in 2013 (+23%). Income taxes are expected to decline for the 8 lowest deciles (80% lowest incomes) and that the bulk of the income tax increases will affect the top 5% of incomes. A simple rule of thumb suggests that those latter households could experience a 40-50% increase in their income tax bills.

 

 

Source: SocGen

 


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Sun, 09/30/2012 - 22:29 | Link to Comment Western
Western's picture

The government does things for you, keep paying them.

 

Unless of course you don't want their benefits.... wait, that's not an option you say?

Sun, 09/30/2012 - 22:52 | Link to Comment ACP
ACP's picture

So does this mean Singapore will be the most cosmopolitan mecca of wealth in the world in 10 years?

I hope their military will be able to handle the jealous rage the socialist world will be thrown into. I can see the headlines now..."Sanctions against Singapore for violation of human rights...possible invasion in the cards..."

Mon, 10/01/2012 - 07:23 | Link to Comment GetZeeGold
GetZeeGold's picture

 

 

Sure I'll pay to be in your cult.....can you spot me?

 

Sun, 09/30/2012 - 22:32 | Link to Comment ShortTheUS
ShortTheUS's picture

Are you implying, Tyler, that the opportunity cost of leaving France becomes less and less for wealthy supporters of the welfare state?

Sun, 09/30/2012 - 22:32 | Link to Comment buzzsaw99
buzzsaw99's picture

boo hoo

Sun, 09/30/2012 - 22:37 | Link to Comment deki
deki's picture

God damn these "champagne drinking socialist".

Mon, 10/01/2012 - 07:11 | Link to Comment Bossuet
Bossuet's picture

Dieu ?

Saint Martin, n'a-t-il pas coupé son manteau en deux, pour le donner à un pauvre ?

En dehors d'une répartition des richesses totalement repensée, il n'existe pas d'autres portes de sorties.

TINA à l'envers ANIT. Hahahaha !

 

Sun, 09/30/2012 - 22:39 | Link to Comment pan
pan's picture

Coming to Murica soon, bitchez!

Mon, 11/12/2012 - 14:54 | Link to Comment LMAOLORI
LMAOLORI's picture

 

 

I don't know about France but in America the ultra wealthy like warren buffoon hide their money in tax exempt foundations which is something obama never discussed so changing the tax rules here wouldn't do a thing to them it would be closing the loopholes that would. Loopholes that the average person would never be wealthy enough to use. So these tax the rich schemes only end up taxing newly created wealth and the middle class.

Buffet's Will Says - The foundation must continue to satisfy the legal requirements qualifying Warren’s gift as charitable, exempt from gift or other taxes. 

In other words, the President’s "Buffett Rule" would not tax the vast majority of Buffett’s own sheltered income, including either his unrealized capital gains, which are currently taxed at 0%, or charitable contributions, which are tax deductible.

What a scam his kids will manage and make money from all this tax exempt money forever he has set up charitable organizations with billions in them for each of them to run that pay them $90 Million a year besides his hiding wealth in gate's foundation.

 

HITlary clinton tax the rich everywhere (might as well say except well connected cronies)

http://www.cnbc.com/id/49150934/Hillary_Clinton_Raise_Taxes_on_the_Rich_Everywhere


Warren Buffett Stands to Gain from Higher Taxes on the Rich

Obviously I think we should stop the spending and the government should get out of my pocketbook but I think people should be aware of how the scam for the well connected ultra wealthy works.

 

Sun, 09/30/2012 - 22:40 | Link to Comment philipat
philipat's picture

At least with DSK there would have some Bunga bunga thrown in??

Sun, 09/30/2012 - 22:53 | Link to Comment b_thunder
b_thunder's picture

This on ly starts in France,  it will spread worldwide in a few short years.

For 40 years, the top 2% have been grabbing disproportionally large piece of the economic pie, plus bought themselves tax rates lower than the rates paid by the folks on minimum wage.  And all these gains weren't even real wealth, becasue no real wealth was crearted.  It was the direct result of predatory low rates by the Fed and governemnt borrowing in 1980s and since 2001.

And what did the top 2% did with this money?  They took these massive compounded over 40 years gains out of the productive economy and dumped it into a RE, dot-com and oil speculation. 

Norway taxes wealth, with annual 1.5% wealth tax.  In a few years entire western world will have it.

 

Mon, 10/01/2012 - 00:15 | Link to Comment Non Passaran
Non Passaran's picture

I wonder how they're going to tax my silver.
Gotta come up with a fair proposal to do that and send it to the IRS.
I want to do my part ;-)

Mon, 10/01/2012 - 00:28 | Link to Comment macholatte
macholatte's picture

 

And what did the top 2% did with this money? 

World's 100 Largest Yachts

http://www.superyachts.com/largest-yachts/worlds-largest-yachts-live.htm


Mon, 10/01/2012 - 18:47 | Link to Comment RickC
RickC's picture

I seem to recall a US tax on yachts that ended up putting boat manfacturers out of business, cost a lot of jobs, and produced zero tax revenue.  So macholatte is advocating more of that?  Lovely.

Mon, 10/01/2012 - 01:42 | Link to Comment deki
deki's picture

You are so wrong sir...I am not a rich individual but i am against extra tax on anybody rich or poor...government spending is the problem, and not taxing enough rich people...taxing extra top 2% wont do shit for a large budget deficit that every Western nation have.

Mon, 10/01/2012 - 07:27 | Link to Comment Crash N. Burn
Crash N. Burn's picture

 It's not a spending problem, it is a revenue problem:

 

"Over the past 12 years, U.S. government spending has increased by a whopping 129%. Of course, by itself this number is totally meaningless. It only acquires meaning when provided with context (i.e. the inflation-rate), and more specifically, the real inflation rate......in the make-believe world of the U.S. CPI that U.S. prices have supposedly been increasing by roughly 2% per year. However in the “real world” (i.e. a place where people buy food and gasoline), prices have been increasing by roughly 8% per year.

 

Thanks to the “magic” of compound arithmetic, over that same 12-year period, prices rose by nearly 150%. Since right-wing zealots can’t operate calculators, let me help them with the math: in real dollars, U.S. government spending has been steadily falling for the past 12 years. However, we need to divide-up this spending into two categories.

On the one hand, the U.S. government has ramped-up (in real dollars) its spending for two wars, to create-and-fund the “Department of Homeland Security”, and to subsidize the $15-trillion bail-out package for Wall Street bankers. If we take away the endless, infinite $trillions which the U.S. government has wasted on funding its empire, its fascism, and its bankers, we see that the amount of money which the U.S. government is spending on people has been plummeting lower, by somewhere close to 3% per year.

For those who consider this 3% decline per year (on people) to be a relatively trivial number, let’s provide some context. The (proposed-but-never-to-be-realized) $60 billion in “spending cuts” Republicans are currently boasting about would be less than 2% of current spending."

 

Our ‘Blood-less’ Economies
Mon, 10/01/2012 - 07:30 | Link to Comment kridkrid
kridkrid's picture

He isn't completely wrong. The top 1% have benifited disproportionately... It isn't real wealth, it's the fiat/fractional reserve Ponzi scheme that has allowed them to extract real wealth from the system. But the solution isn't to tax them... That's far too kind and completely within the context that they themselves created.

And the govt spending that you bitch about... A symptom, not the cause. Take it away and the system collapses. The system will collapse anyway, but as for today, debt based govt spending is what keeps the system alive. I don't mean to imply that this is good... It is just true.

Mon, 10/01/2012 - 08:08 | Link to Comment Crash N. Burn
Crash N. Burn's picture

"The top 1% have benifited disproportionately... It isn't real wealth, it's the fiat/fractional reserve Ponzi scheme that has allowed them to extract real wealth from the system."

 

 Indeed, and what do they do with the wealth they extract?

 

" First we have the global economy, which totals somewhere in the area of $65 trillion in size. Then we have the bankers’ private, rigged casino – which they call “the derivatives market”.

Its size? Somewhere in excess of twenty times the size of the global economy. We’re not sure exactly how much in excess of twenty times that size, because the bankers have become defensive about their obscene mountain of crooked bets – and so they drastically changed how the size of their casino was “defined”.

Let me repeat this basic fact, since it is one to which the Average Joe is obviously totally oblivious. The total amount of bets on the global economy exceed the total size of the global economy by a factor of more than twenty. Put another way, more than 90% of all the “capital” in capitalism is now devoted to gambling on the global economy, while less than 10% is devoted to fueling the global economy."

The Tortoise and the Hare


Mon, 10/01/2012 - 09:23 | Link to Comment darteaus
darteaus's picture

Au contraire!

Targeting the rich creates an enemy for the politician to focus the proletariat on as the politician turns up the speed of the assembly line and cuts the food rations.

 

Mon, 10/01/2012 - 03:46 | Link to Comment Boeing Boy
Boeing Boy's picture

wealth taxes are coming, for sure.  in norway you are taxed on your global wealth, ouch.

Mon, 10/01/2012 - 08:20 | Link to Comment Crash N. Burn
Crash N. Burn's picture

Taxing "wealth" instead of "income" is the most benign form of tax (and why we don't have it).

 

""The two forms of taxation which harm economies and oppress the Little People are “income taxation” and “consumption taxation”. The benign form of taxation which treats everyone equally is wealth taxation. Again I can envision readers scratching their heads. “Wait a second,” they object, “All of the taxes in our society are income taxes or consumption taxes – and there is no wealth taxation.” Exactly."

 

The Great Western Revenue Crisis, Part II

 

The biggest freeloaders in western economies are at the TOP.  The tax system was designed to take from poor, middle class, and small businesses and redistribute the wealth to big business and the 1%ers through the use of tax breaks only they (have the wealth) to qualify for.

 

Income tax theft- Billionaire versus Joe Six Pack

Mon, 10/01/2012 - 08:57 | Link to Comment Nels
Nels's picture

Exactly how benign is taxing the wealth folks put aside to fund their retirement?  There's not enough wealth out there to fund the industrialized worlds debts, certainly not after confiscation of all investment income drops the market bid to zero.

There's no freedom without private property, only the right to work until you die.  Unless, of course, you have an inflation protected government pension.

Mon, 10/01/2012 - 10:56 | Link to Comment Crash N. Burn
Crash N. Burn's picture

Exactly how benign is taxing the wealth folks put aside to fund their retirement?

 

"With a fair tax system, everyone can be taxed at the same rate. It is also a perfect opportunity to test the integrity of the wealthy. There can be no possible objection to a flat, wealth tax. Should such a proposal be advanced – and meet the much more vehement protests of the very wealthy – this would prove what average citizens have suspected all along. Specifically, the wealthy have never been interested in “fair taxation”, but rather all they want to do is rob all the wealth of society for themselves."

 

The Solution to Sovereign Insolvency, Part III: Taxation Salvation

 

 Currently they inflate to steal folks purchasing power from their retirement funds. Dollar values may increase but the purchasing power of the fiat is dying. Here's a table showing the decline in purchasing power of fiat (versus silver) from 2001 to 2010.

 

Paid by silver, by gold or by fiat - a historical comparison

 

Agree there is no freedom without private property but if I don't pay property taxes every year, suddenly my property is no longer private, is it?

Mon, 10/01/2012 - 13:10 | Link to Comment StandardDeviant
StandardDeviant's picture

"No possible objection"?  How about, "It's not yours, you thieves!"

By what right does any gang of armed thugs, whether they call themselves a "government" or a "gang" or a "mafia", get off thinking that they can take part of what you have worked to create and save, just because?

At least the gangsters don't pretend that what they're doing is right, or try to convince people that they have a moral obligation to "contribute".

Tue, 10/16/2012 - 19:36 | Link to Comment Observer
Observer's picture

The right earned by providing the secure environment for them to be able to enjoy their wealth in peace. Is that not fair? I am not in favour of direct taxes but I can't see any argument against a reasonable wealth tax. Wealth and property taxes levied at a reasonable rate are the most justifiable and fairest form of taxation

Mon, 11/12/2012 - 15:11 | Link to Comment LMAOLORI
LMAOLORI's picture

 

 

Did you see the Federal workers want a raise - a RAISE and they already make more then the private sector who are damn lucky to even have a job. That shit has to stop!!!!!!!!!!!!!!!!

FEDERAL WORKERS WANT PAY RAISE IN OBAMA'S SECOND TERM

As for countries like Sweden they are now running out of other people's money as I understand it they stopped allowing immigrant's free schooling and are paying their own young to go to Norway.

Sweden pays jobless youth to move to Norway

http://www.telegraph.co.uk/news/worldnews/europe/sweden/9645959/Sweden-p...

and about the U.N. another organization that should be kicked out of the U.S.

UN Urges Countries To Impose Global Taxes, Raise $400 Billion

http://www.huffingtonpost.com/2012/07/05/un-global-tax_n_1651759.html

The tax list

snip

Also the UN places the same estimated value on the proposed currency tax ($40 billion), and  roughly the same thing on its proposed financial tax ($15 billion to $75  billion).

And another idea is to borrow the lines of credit allocated to rich countries themselves at the  International Monetary Fund, and  “leverage” them to create new investment  funds for the world’s poor. How to do this while preserving those credit lines  as a reserve asset that rich countries could draw on when required, the report  admits, remains to be seen.

Then the UN also wants to charge  royalties on undersea minerals more than 100 miles offshore, within what are  called “exclusive economic zones” — in effect, inside some country’s sovereign  economic territory.

The sensitive issue here is that the world’s current “exclusive economic  zones” extend 200 miles offshore — meaning that the U.N. is suggesting that it  collect royalties on mineral wealth on half the “exclusive” territory, which it  refers to in the report as part of the “global commons.”

For most nations, excluding the U.S., those 200 mile zones were established  by the U.N.-sponsored Law of the Sea Treaty, known as LOST, which came into  force in 1994 after it was signed and ratified by 162 countries. (The U.S.  signed but has not ratified LOST; its 200-mile “exclusive economic zone” was  established by presidential decree.)

The new, 100-mile royalty proposal in the U.N.’s financing report would  require a new agreement to hand over proceeds from half of that territory to the  U.N.-sponsored International Seabed Authority.  Fox News

 

Mon, 10/01/2012 - 03:49 | Link to Comment Peterus
Peterus's picture

In a few years entire western world will be in shock and readjustment after corporatist economy falls down. Hopefully we'll see reinstating capitalism... but more likely war or new totalitarian era. And this is not some plot by "the top 2%", but by guys with guns (government) and their cronies (some of them billioners, but even public school teacher, by no means rich person is still an accessory in this crime). Taxing wealth, taxing everything into oblivion will change nothing. Even if you make current rich poor and guys that do the "making" become new rich, the course of crony economy is still straight for the cliff.

Mon, 10/01/2012 - 04:28 | Link to Comment Offthebeach
Offthebeach's picture

As a sleezeball ex- Arkansas lawyer once said, "It depends on what is, is."
The saps, suckers can write from the first word of the tax code and the strong can not only avoid but profit. Large taxes keep the rich rich, preventing new young rich. Large taxes centralized wealth and power making access and profitability easier. It's better to steal, harvest, pilfer at the wholesale level then go door to door for spare change. The rich should love big gov. Big gov elites love riches. It's a natural marriage.

Mon, 10/01/2012 - 08:50 | Link to Comment RickyBobby
RickyBobby's picture

"Large taxes keep the rich rich, preventing new young rich. Large taxes centralized wealth and power making access and profitability easier. It's better to steal, harvest, pilfer at the wholesale level then go door to door for spare change. The rich should love big gov. Big gov elites love riches. It's a natural marriage."

This is exactly the case and well said. Stealing at the wholesale level is so much more civilized!

Mon, 10/01/2012 - 09:06 | Link to Comment overmedicatedun...
overmedicatedundersexed's picture

yes lets keep pouring private wealth into the gov's of the world..gov's with so many conflicted and captured agendas

that the money is oops its gone, tax more and oops its gone. if many who want higher taxes here would just stop and understand:

this is the system that makes the 1% richer every year thru corrupt pols ..even idiots would not keep doing this

but

we

keep seeing the socialists demand more and more be poured into the bucket shot full of holes.. 

 

Mon, 10/01/2012 - 04:57 | Link to Comment Dane17
Dane17's picture

All these "rich" taxes do is keep us hard working small business owners from breaking into the upper levels of wealth by locking in people's economic standing.

Its an economic feudal system designed to keep the serfs from revolting and also making sure the lowly "artisan" or "merchant class" never has a chance of upward mobility while the ruling elite could give two shits about the tax rate.

Sun, 09/30/2012 - 22:55 | Link to Comment Bear
Bear's picture

This in addition to the 1.5% tax on wealth, plus a substantial VAT ... I will continue to complain about the US taxes, but we are far better off than France

Sun, 09/30/2012 - 22:59 | Link to Comment Monedas
Monedas's picture

Let's cut to the chase .... George Soros can make all the money .... pay all the taxes .... and we all live like retired French bureaucrats on the French Riviera in modest but comfortable pensions .... lunch is served .... salad and pasta, half a roasted chicken and half a litre of wine on a red and white checkered tablecloth ?

Sun, 09/30/2012 - 22:57 | Link to Comment tmosley
tmosley's picture

Who pays?  The people who are leaving?

No, just the people who are left.

Mon, 10/01/2012 - 06:50 | Link to Comment malikai
malikai's picture

I don't know who pays, but what I do know is that this is great news for London real estate.

Sun, 09/30/2012 - 23:01 | Link to Comment philipat
philipat's picture

Actually, Singapore already has the highest propoertion of Millionaires anywhere in the world. And is clean, efficient, hard-working and safe with the best International airport in the world, unclogged streets, a superb highway infrastructure and a clean modern air-conditioned pan-island subway system It's a fantastic place to live (As folks like Jim Rogers have discovered) and it works.

 

So, yes, it will be next on the paraiah shit list. I expect the IRS will start the ball rolling?

Mon, 10/01/2012 - 01:11 | Link to Comment OpenThePodBayDoorHAL
OpenThePodBayDoorHAL's picture

Yah yah Singapore is great. Easy to do when you're entire nation is an island about 15 miles on a side, and you've got the world's largest military as a friend who keeps the waterways open for you.

Mon, 10/01/2012 - 03:11 | Link to Comment i-dog
i-dog's picture

Singapore is a stifling straight jacket ... but it is quite capable of keeping its own waterways open. (Who the fuck is trying to close them? Neither Singapore, nor Indonesia, nor Malaysia is trying to close them. Cheeses, you dumb fucking sheep are incredibly dumb!)

Mon, 10/01/2012 - 07:19 | Link to Comment j0nx
j0nx's picture

I hope you seriously don't believe what you just wrote.

Mon, 10/01/2012 - 12:22 | Link to Comment i-dog
i-dog's picture

I've lived in Singapore. You obviously haven't.

Mon, 10/01/2012 - 20:24 | Link to Comment philipat
philipat's picture

I lived there for over two years and loved it. I now live in Bali because I prefer to live on the beach but still visit monthly andstill own an Apartment there, which turned out to be the best investment I ever made. What's your problem? You still believe the US is "The land of the free" perhaps?

Mon, 10/01/2012 - 21:54 | Link to Comment i-dog
i-dog's picture

I still maintain an office there and have a great deal of respect for the Singaporean people, but I've had more than one run-in with the government over their crony capitalist policies (won a couple; lost one which cost me dearly, after they directed Straits Times editorials against me personally...they're a bunch of crooked cunts, just like they are now in the US). Singapore is the blueprint for crony capitalism and heavy state control of thought.

Why would you assume I'm American, or in the US? LOL.

Wed, 10/03/2012 - 00:13 | Link to Comment philipat
philipat's picture

Ah, now I see with the benefit of disclosure of the real reason. Neither I nor any of my close associates ever had any such problems in Singapore. In fact, we received great support from the Government and received generous tax holidays for manufacturing investments and Regional operations.

Of course, you can get into trouble anywhere.

Mon, 10/01/2012 - 09:19 | Link to Comment darteaus
darteaus's picture

It' already on the list - see the responses below.

Sun, 09/30/2012 - 22:59 | Link to Comment UGrev
UGrev's picture

Wait wait..wait..

The government expects income tax receipts to increase from €59bn in 2012 to €72.6bn in 2013 (+23%)"

let me get this straight. The French gov't just jacked the tax to 75% for those making >1MM EU and they expect revenue from that?  You want to know what I expect? NASA photo's showing blue streaks forming an exit pattern from France to .. well.. anyplace BUT France. 

What fucking delusion mind.. oh hang on a sec. This is EXACTLY what they wanted. To get rid of them so that all that remains are sheep. No, I take that back.. they're too stupid to come up with that concept. They really expect people to stay and pay. HAHAHAAHHHAHHAAHAHAHAHAHAHAHAHAAHAHAHAHAHAAHAHAHAHAHAHH!!!!

Mon, 10/01/2012 - 01:32 | Link to Comment BooMushroom
BooMushroom's picture

Population of France in 2011 was ~65 million. We can expect the top 2% to leave soon. Wonder which country will find itself with an extra 1.3 million rich frogs?

Mon, 10/01/2012 - 07:21 | Link to Comment StandardDeviant
StandardDeviant's picture

England.  London, to be precise.  David Cameron's already rolling out the red carpet.

But never fear: Mr. Hollande's government believes that patriotism will keep them at home.  Um, yes, bonne chance pour ça.

Mon, 10/01/2012 - 02:22 | Link to Comment seek
seek's picture

Yes, I was going to say "good luck with that" to the expected revenue increase. I'm guessing they've never heard of Laffer.

Even if they institute capital controls, a goodly sized portion of their 2% might decide it's not worth working so hard for that 25% they get to keep. Every income curve, no matter the segment, be it top 10% or 1%, is always heavily volume loaded at the bottom -- those folks are more likely to be working, and more likely to give up.

Mon, 10/01/2012 - 08:08 | Link to Comment UGrev
UGrev's picture

The only way they stop the exodus is to make it illegal to leave.. 

Mon, 10/01/2012 - 09:18 | Link to Comment darteaus
darteaus's picture

Maybe they can build a wall?

Mon, 10/01/2012 - 07:22 | Link to Comment j0nx
j0nx's picture

Somewhere right now Arthur Laffer laughs as he reads these French headlines. They will do this here within months if Obama is reelected. I know that there is no difference between O and R but the biggest danger to this country now are 2nd term Presidents with nothing to lose, particularly ones who are already socialist.

Sun, 09/30/2012 - 23:00 | Link to Comment Poor Grogman
Poor Grogman's picture

When do the checkpoints get installed?

Sun, 09/30/2012 - 23:11 | Link to Comment philipat
philipat's picture

Already, Ashford in Kent, UK (The UK stop on The Eurostar train from London to Paris and about one hour from Paris) is full of French businesses and it can be guaranteed that this trend will continue.

I'm not aware of any UK businesses making the reverse trip!!

Mon, 10/01/2012 - 03:50 | Link to Comment Acet
Acet's picture

Which UK businesses? The UK doesn't created much in the way of real businesses.

Sun, 09/30/2012 - 23:09 | Link to Comment Blazed
Blazed's picture

I notice Max Keiser got out, though they said it was for more studio guests and production quality. Ok?

Sun, 09/30/2012 - 23:41 | Link to Comment Abrick
Abrick's picture

If a corporation was paying $10,000.00 in taxes more than a decade ago at an average global rate of 40%, globalization reduced that to $5000.00 or less over the last 10 years. The new increases will still be lower than what was being paid in corporate tax in the 90's. A 50% increase in current corporate tax rates is still less than what was being paid back in boomtime.

Mon, 10/01/2012 - 00:03 | Link to Comment Dr. Engali
Dr. Engali's picture

You do get that corporations are just a conduit to extract taxes from us proles to the government don't you ? Here's how it works... The government sets a tax rate of let's say 35%. The corporations say " we have to make up that 35%" so then they raise their prices and voila you have just paid the tax. But it gets better because now we have multinationals and that extra 35% that you demand they pay(which you really pay it) now goes to the bottom line thanks to tax havens.

Mon, 10/01/2012 - 00:32 | Link to Comment incognito
incognito's picture

Exactly. Corporations do not pay taxes, they just collect them from customers and then hand them over.

Mon, 10/01/2012 - 09:17 | Link to Comment darteaus
darteaus's picture

Without the visible government hand...

Mon, 10/01/2012 - 04:06 | Link to Comment Acet
Acet's picture

So where does Supply & Demand go in that equation?

If before that tax hike the CEO of any Publicly Traded Company which had the possibility of increasing their prices 35% did not do so (and waited for the tax hike) then he or she would be in breach of their fiduciary duty of maximizing profit for their shareholders.

The whole "corp tax hike gets paid by the consumers" spiel rests on the assumption that companies will not try to maximize their profits. This would be the opposite of how Capitalism and the Free Market works: In the real world, if a company has a chance to hike the prices they charge by 35% without loosing customers, they will hike their prices 35%, independently of corporation tax.

Then there's the small detail that corporation tax is on profits, not revenues, and there is no strong mechanism that would make corps pass taxes on profits through to customers.

Maybe you're confusing Corporation Tax with Value Added Tax?

Mon, 10/01/2012 - 06:38 | Link to Comment Dr. Engali
Dr. Engali's picture

First of all arguing that we live in a capitalistic free market society is specious at best, you can't point to a single such market on the globe. Secondly everytime there is an increase in taxes of any type ,whether it is sales or income, prices are adjusted accordingly. The corporations goal is to maximize profits and they are not going to eat any tax increase....... period. If you don't think that a corporation calculates taxes into product pricing then it's you who are the one who is confused, being involved with a few corporations in my lifetime, I can assure you they do.

The great lie is that corporate taxes are a tax on the wealthy whereas the truth is corporate taxes are a regressive tax on the poor who feel the full brunt. Corporate taxes and inflation are the most insidious taxes of all , because they are the stealth taxes people don't know they are paying.

Mon, 10/01/2012 - 10:26 | Link to Comment Acet
Acet's picture

True if there is no competition.

When there is competition there is an incentive for the players to avoid as much as possible to pass the taxes onwards to customers for two reasons:

  1. To gain or at least maintain market share
  2. At a higher price point marginal customers might refrain from buying the product

It's a bit like the reverse of the Prisioner's Dilema in that the first player to defect (and raise prices) looses the most.

I would grant it to your that over a longer time frame, if margins are tight, an increase in corporate taxes will be passed on to consumers through the mechanism of, due to tight margins, the after tax profit after the tax hike not justifying the investment for the owners of some companies, so they exit that market (thus reducing competition and thus price pressure, so prices go up).

However, at the moment we're still in a period with large profit margins (from outsourcing), cheap money (from ZIRP) and few investment opportunities, so that mechanism is less likelly to be active.

Of course if there is no competition, it's most likelly due to regulation that increases barriers to entry, so the blame is still on the State.

Mon, 10/01/2012 - 06:54 | Link to Comment Offthebeach
Offthebeach's picture

Heard from Studabaker Motors or Magnavox Television lately? No profits no investors no company. Investors don't want to hear any crap abut tax increase coming out of their return
PR else they hire new management. Tax increase are paid by charging customers, lay offs, outsourcing. Maybe French companies have been fat and slack and there is lots of efficiencies to be had.

Mon, 10/01/2012 - 07:25 | Link to Comment BigJim
BigJim's picture

Yes, indeed! I've heard the French car industry's excessive profits are a particularly ripe target for taxation *chortle*

Mon, 10/01/2012 - 07:22 | Link to Comment BigJim
BigJim's picture

 If before that tax hike the CEO of any Publicly Traded Company which had the possibility of increasing their prices 35% did not do so (and waited for the tax hike) then he or she would be in breach of their fiduciary duty of maximizing profit for their shareholders.

Try thinking a little harder.

Corporations (unless they're part of a cartel) can't just arbitrarily raise their prices, because their competitors will undercut them, and they'll go out of business.

However, if the government imposes a 35% tax hike, this will be imposed on all of the firms, so they all raise their prices in sync... except, of course, corporations that are large enough to be multi-nationals who get offshore tax breaks. In which case the tax falls on the smaller domestic ones, meaning they are at a relative disadvantage to their larger multi-national competitors... and thus more likely to go out of business, because their costs (tax is essentially a cost) are higher.

Is this what you want? 

Mon, 10/01/2012 - 10:31 | Link to Comment Acet
Acet's picture

Don't forget that corporation tax is on the profits, not the revenue.

If the margins were big enough to begin with, on the subject of raising prices in synch there is a Prisioner's Dilema in that any company that defects from that action can gain market share from those who don't and thus end up with bigger profits (it depends on the market if this is or not an attractive enough strategy).

That said, it's a pretty good point on the multi-national vs local companies angle (arrow up). Maybe the right approach is to close those loopholes and lower corporate tax?

 

Sun, 09/30/2012 - 23:41 | Link to Comment sadpanda
sadpanda's picture

Surely they won't vote with their feet?

Mon, 10/01/2012 - 00:26 | Link to Comment masaccio
masaccio's picture

Taxes beat Madame Guillotine any day.

Mon, 10/01/2012 - 01:47 | Link to Comment zilverreiger
zilverreiger's picture

Once you do decide to tax it's important the top earners get taxed equally to the rest in real terms.

ZH should not be talking about a percentage of increase, but of absolute real percentages.

Mon, 10/01/2012 - 02:07 | Link to Comment backwardation
backwardation's picture

people have to understand that the USA have to  increase their taxes as europe already have higher taxes overall

In Holland we have 1,2 wealth tax and 52 pct on our top salary and people do not complain that much as we get lot in return.

The 1 pct in the states can do what they want and will be the reason for riots to start( and I cannot blame the people as they stole the wealth in yr country.

Also its the country where almost everyone owns a gun...

The problem is that those riots will spread to Europe even though we have a much more socialist tax regime 

Mon, 10/01/2012 - 09:00 | Link to Comment ElvisDog
ElvisDog's picture

I think part of the problem with raising taxes because we'll "get a lot in return" (in the U.S. at least) is that I have no confidence that our government will spend the increased tax revenues wisely. We'll just get more Solyndras, more aircraft carriers, more bailouts of already over-paid heavily unionized companies, etc.

Mon, 10/01/2012 - 09:12 | Link to Comment RickyBobby
RickyBobby's picture

Maybe on a statistical, per capita basis "almost everyone owns a gun" in the US but I can assure they do not. However, we in Texas more than make up for those in the north that do not. I myself, for instance, own over 10 guns all of which are all used regularly and proficiently. 

To infer that the wealthy in Holland are not self-interested, especially as compared with the US, is ignorant. And to say that riots in Holland will be the fault of the US gun toters...you have terrible logic.

Mon, 10/01/2012 - 02:07 | Link to Comment flyingpigg
flyingpigg's picture

Zilverreiger, the whole idea of focussing on percentages is a nonsensical socialist fairness argument. If a 1 percenter pays 500 k in taxes it's maybe less in percentage of his income, but it's many factors more than the abosulte tax contribution of a low wager. And the one percenters don't take advantage of all the benefits to sponsor child care, rent, foodstamps etc.

Mon, 10/01/2012 - 02:31 | Link to Comment zilverreiger
zilverreiger's picture

Ofcourse not, the state maffia should certainly not be benefitting the rich leeches in real terms.

And as the money in the bottom bracket counts more as its used for the basic life necessities, it should be taxed slightly less in comparison to higher brackets.

Mon, 10/01/2012 - 02:55 | Link to Comment Ghordius
Ghordius's picture

is anybody aware of the fact that during the Ike/Nixon presidency the highest marginal tax rate in the US was around 92%? Some say it was a golden age...

Mon, 10/01/2012 - 03:05 | Link to Comment AndrewJackson
AndrewJackson's picture

Try again. The tax revenue to gdp has never really varied much off of 20 some percent. Those rates were fake due to the insane amount of loopholes available. The fact of the matter is the top % of income earners are the most productive and most heavily stolen from via taxes. I am not talking about the billionaire's like buffet, I am talking about the small successfull business owner that brings home 250k. If you want a country to be viable, these are not the type of people you want to drive away.

Mon, 10/01/2012 - 06:08 | Link to Comment Ghordius
Ghordius's picture

well, you might want to try again. first, I was stating the facts around the highest US marginal tax rate, if you want the "official" rate for the superrich. second, the tax revenue to gdp calculation that you quote is correct, for the US. european countries extract much more, particularly the scandinavians (no, not defending this extraction a priori). third, you fail to mention that in nearly all tax environments currently at work today the small business owner is the one that has to pay the highest marginal tax rate. If you want to correct this injustice, you might want to look at facts instead of propaganda stating that additionaly to the "insane amount of loopholes available" the superrich should have also a low marginal tax rate. I understand this propaganda is know under the "job creators should not..." label, and I doubt it's really made for the interests of the small business owner.

again: what is the real, effective, legal tax rate of a US 250k business owner? compare it to the real, effective, legal tax rate of Romney and Buffet, for a non-partisan example. now, who profits currently from the greatest collection of tax code ever written again?

Mon, 10/01/2012 - 06:18 | Link to Comment egoist
egoist's picture

Would that be the golden age where we were taken off of the gold standard?

Mon, 10/01/2012 - 03:39 | Link to Comment i-dog
i-dog's picture

 

"Income taxes are expected to decline for the 8 lowest deciles (80% lowest incomes) and that the bulk of the income tax increases will affect the top 5% of incomes."

LOL ... riiiiiight!

Mon, 10/01/2012 - 04:13 | Link to Comment Urban Redneck
Urban Redneck's picture

The CBO makes similar projections for US tax changes, complete with images of how the elite will screwed and the little guy will be spared.  Somehow, it never works out that way.  Let's see what a chart of actual revenues looks like in a year's time-

Mon, 10/01/2012 - 06:55 | Link to Comment No Euros please...
No Euros please we're British's picture

Taxes are such a barberous relic.

Mon, 10/01/2012 - 07:14 | Link to Comment Bossuet
Bossuet's picture

Ben voyons, c'est votre système qui est barbare !

Mon, 10/01/2012 - 07:10 | Link to Comment overmedicatedun...
overmedicatedundersexed's picture

you tax your enemies, your wealthy friends get subsidized ala coal vs solyndra..get the scam yet?

so many still think taxes and big gov have some benefit to the poor or them..gotta laugh

Johnson started the war on poverty and trillions of dollars later there is no more poverty in USA, oh wait!

Mon, 10/01/2012 - 07:18 | Link to Comment booboo
booboo's picture

I wish the Government "Collected" the income tax, in reality they don't have the balls. IF they went door to door like a census worker there would be a better understanding between who is the "civil servant" and who is the "citizen"

I also wish everyone had to stroke the check for their income tax burden, they may have a better understanding of the "system"

And finally, No Representation Without Income Taxation. If you want to be a ward of the state you get none of the benifits of a citizen until you are off the dole. No more welches voting themselves a pay raise from the treasury.

Mon, 10/01/2012 - 08:43 | Link to Comment j0nx
j0nx's picture

Sounds raciss to me. /sarc

Mon, 10/01/2012 - 08:03 | Link to Comment agNau
agNau's picture

Never Enough...........Tax the Cayman Islands!!!!!!!
Better yet......bomb them into submission, and place a new central bank!
Spread Freedom!!!

Mon, 10/01/2012 - 08:04 | Link to Comment DrDinkus
DrDinkus's picture

what is the tax rate if somebody makes $995K a year? Got my popcorn..

Mon, 10/01/2012 - 08:37 | Link to Comment savagegoose
savagegoose's picture

ohhh fuck this means more rich french cunts comming over here being dicks. thanks alot.

Mon, 10/01/2012 - 08:44 | Link to Comment CuriousPasserby
CuriousPasserby's picture

The US is the only country in the world that taxes worldwide income (even for 10 years after you emigrate). So can't the rich French just temporarily move abroad and avoid the tax? Monaco, Andorra, Luxembourg wouldn't be bad for a few years.

Mon, 10/01/2012 - 08:49 | Link to Comment northerngirl
northerngirl's picture

Why our countries not looking at implementing a flat tax on incomes, and phasing out current income tax structures?  This whole argument of the rich v poor, one side is always looking for preferential treatment:  "Your not paying your fair share", to those paying nothing and demanding more - insane.  The other side, using the tax codes to avoid paying taxes on income and they are the ones writing the tax laws, again insane. Tax everyone equally and life will get fair in a quick hurry. Keep it simple for every dollar you earn, "X%, is taxed period, no deductions, brakes, loop-holes, etc.  "Fairness", is only found when everyone has to contribute equally.  Neither side is paying more and all are paying their fair share.

 

 

 

 

 

Mon, 10/01/2012 - 09:13 | Link to Comment Vince Clortho
Vince Clortho's picture

Government of the State, by the State, and for the State.

 

Requires an ample supply of grunts to do all the work and turn the fruits of their labor over to the State.

All Hail the State!

Mon, 10/01/2012 - 10:04 | Link to Comment roadhazard
roadhazard's picture

It's hard for the workers to pay more tax when wages do not keep up and Big Biz shifts there tax contribution to the very same workers. I feel so sad for the rich, not. If the rich don't want to pay more taxes then pay the workers a fucking decent wage.

Mon, 10/01/2012 - 10:31 | Link to Comment random thoughts
random thoughts's picture

The 1% are NOT primarily investment bankers.  Many if not most are people who have a one-off gain.  Like the sales guy for Microsoft selling his lifetime accumulation of stock options.  The dentist or plumber selling his business.  People who work for the government or universities, for instance, don't have this lifetime income profile.  They do really well with their combination of salary and benefits, which provide a low-risk steady earnings stream for their entire lives.  Some of us act like "the 1%" are a bunch of people raping the country, taking more than they deserve, out of touch with reality.  It doesn't match the facts, and going after this income bracket is only a small part of the solution for the imbalance between revenue and spending in government.  Let's talk about the big issue- entitlements- and stop the hate.

Mon, 10/01/2012 - 14:07 | Link to Comment Sheriff Douchen...
Sheriff Douchenik from AZ's picture

Can someone for the benefit of this thread clarify - aren't celebrities and sports star exempt from this ultra tax in France? If so, has Hollande come out publically and explained why they are exempt? Or does crony socialism get swept nicely under the rug? Just askin'

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