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French Constitutional Court Approves 75% Tax On High Earners

Tyler Durden's picture




 

Almost a year ago, the French constitutional court ruled against Francois Hollande's triumphal blast into socialist wealth redistribution, with his proposed 75% tax rate on high earners, and so indefinitely delayed the exodus of the bulk of French high earners (even if some, like Obelix, aka Gerard Depardieu, promptly made their way to the country that has become the land of solace for all oppressed people everywhere, Russia) into more tax-hospitable  climes. That delay is now over, when earlier today the same court approved a 75% tax on all those earning over €1 million. The proposal passed after the government modified it to make employers liable for the 75% tax. As BBC reports, the levy will last two years, affecting income earned this year and in 2014.

Bloomberg has the details of the tax hike:

Under Hollande’s proposal, companies will have to pay a 50 percent duty on wages above 1 million euros ($1.4 million). In combination with other taxes and social charges, the rate will amount to 75 percent of salaries above the threshold, the court wrote in a decision published today.

 

“The companies that pay out remuneration above 1 million euros will, as expected, be called upon for an effort of solidarity on remuneration paid in 2013 and 2014,” the Economy Ministry said in an e-mailed statement.

 

Hollande, who once said he “didn’t like” the rich, announced the 75 percent tax in February 2012 as part of his presidential campaign to appeal to his Socialist base. It has become a symbol of his government’s record-high taxation rate.

And with the tax passage, the preparations for an exodus by all high earnings begin, first among the local football teams. BBC reports:

Football clubs in France went on strike earlier this year over the issue, saying many of France's clubs are financially fragile and say the plans could spark an exodus of top players who are paid huge salaries.

 

The Qatari-owned Paris Saint-Germain has more than 10 players whose pay exceeds 1m euros, including the Swedish striker Zlatan Ibrahimovic.

 

There has also been a chorus of protest from businesses and wealthy individuals who have condemned the tax - including film star Gerard Depardieu, who left the country in protest.

 

Polls suggest a large majority in France back the temporary tax.

 

Unlike many other countries in Europe, France aims to bring down its huge public deficit by raising taxes as well as some spending cuts. The highest tax rate in the UK is 45% and is applied to individuals.

While the numerous unintended consequences of this shock and awe tax hike will be amusing to watch in real time as this move will almost certainly be the long-awaited catalyst to push France into its long-predicted recession (to the benefit of countries like Belgium where the French uber-rich are already relocating to), one wonders if the drop in the value of French ultra-high end real estate will be offset by the soaring valuations of London's already "beyond housing bubble" home prices, and just what the local response will be now that domestic real estate is even more inaccessible to anyone but the wealthiest global oligarchs and billionaires (aside from the capital gains tax of course, which as we wrote previously, is about to be launched first in London, and then everywhere else).

 

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Sun, 12/29/2013 - 13:04 | 4283230 JustPrintMoreDuh
JustPrintMoreDuh's picture

If you like your earnings, you CANT keep them.

Sun, 12/29/2013 - 13:17 | 4283261 Popo
Popo's picture

Capital controls in 5... 4... 3...

Sun, 12/29/2013 - 13:24 | 4283277 Beam Me Up Scotty
Beam Me Up Scotty's picture

Just take it all. Then everyone can retire.

Sun, 12/29/2013 - 13:42 | 4283321 remain calm
remain calm's picture

This movie will be coming to tax collector near you soon.

Sun, 12/29/2013 - 14:05 | 4283369 fonestar
fonestar's picture

Tax them all and let God sort them out.  Keep taxing, tax people everywhere 110% of their earnings if that is what it takes to make them realize they need something like Bitcoin, out of reach of government and untaxable.

Sun, 12/29/2013 - 14:30 | 4283408 PR Guy
PR Guy's picture

 

 

here's one French man with a problem

 

http://www.youtube.com/watch?v=39X4sXc0Ubc

 

Sun, 12/29/2013 - 15:09 | 4283498 DIgnified
DIgnified's picture

Here is another: http://geirsmith.wikidot.com/

He' s hilarious. I mess with him at BIN. Absolutely insane. He calls me 'O-bot antichrist'... it's a thing we have.

Sun, 12/29/2013 - 16:37 | 4283689 kaiserhoff
kaiserhoff's picture

Exit Parisian millionaires, stage right.

Sun, 12/29/2013 - 15:46 | 4283576 Skateboarder
Skateboarder's picture

Sorry fone, adoption of bitcoin outside of the nerd circle is going to be very unlikely.

Sun, 12/29/2013 - 15:53 | 4283583 fonestar
fonestar's picture

Well in that case the "nerds" will grow exceedingly rich.  Except that is not the case, Bitcoin is already spreading in use and most users will never have any clue of how it works.  Just like how they had no clue how the Federal Reserve prints money.

Sun, 12/29/2013 - 16:00 | 4283597 logicalman
logicalman's picture

If they can't get your money, they'll come for you instead.

BitCoin will be of little assistance at that point.

Governments have pretty much monolpolized violence or the threat thereof.

By the way, given you seem to be a bit of an evangelist, why not start up the Church of Bitcoin?

Hash tags in the collection plate and all that.

Sun, 12/29/2013 - 16:00 | 4283603 fonestar
fonestar's picture

It's virtually impossible to tie Bitcoin users to Bitcoin addresses.  Unless you want to get into some stupid argument about a secret government quantum computer that is maintaining an exponentially growing database of addresses.

Sun, 12/29/2013 - 16:16 | 4283646 Skateboarder
Skateboarder's picture

Pattern matching your IPs, proxied or not, is very easy.

Mon, 12/30/2013 - 11:02 | 4285019 fonestar
fonestar's picture

What are you talking about?  There's no way to associate users of Bitcoin with new Bitcoin addresses.

Sun, 12/29/2013 - 16:42 | 4283700 logicalman
logicalman's picture

If you are denied access to a computer you are fucked - simple as that

Sun, 12/29/2013 - 22:37 | 4284338 Blame Crash
Blame Crash's picture

Why would the government need your pathetic bitcoins when they can have you by the throat instead?

Sun, 12/29/2013 - 13:15 | 4283262 Mae Kadoodie
Mae Kadoodie's picture

If we like your 75% then we can keep your 75%.

Sun, 12/29/2013 - 13:26 | 4283282 silvermail
silvermail's picture

Thus, France is shooting itself in the foot? No, in the head!

Sun, 12/29/2013 - 14:37 | 4283418 zerozulu
zerozulu's picture

Take 100% and hang them all.

 

French revolution II

Sun, 12/29/2013 - 15:13 | 4283507 Harbanger
Harbanger's picture

In fairness you should only hang 75%.

Sun, 12/29/2013 - 13:25 | 4283284 RafterManFMJ
RafterManFMJ's picture

What does the Frenchman say?

 

Le Moo! Le baa! Le belement!

Sun, 12/29/2013 - 13:57 | 4283350 mvsjcl
mvsjcl's picture

"If you like your earnings, you CANT keep them."

But if you like your capital gains, YOU CAN!

Sun, 12/29/2013 - 14:21 | 4283384 TheLoveArtist
TheLoveArtist's picture

The Rich never pay taxes anyways LOL, this is just for the media and middle class who is next to get their tax rates jacked up.  Unlike the uber rich who reside primarily in Monacco etc and use shell companies, the middle class rabbit is stuck in the cage and has to pay with flesh and blood.  Expect to see their rates go up too and the govt to say well we raised them on the rich now everyone also has to bite the bullet.

Sun, 12/29/2013 - 14:39 | 4283415 Leopold B. Scotch
Leopold B. Scotch's picture

If you're counting in dollars, already we all pay the inflation tax.

Sun, 12/29/2013 - 15:08 | 4283488 garypaul
garypaul's picture

BS. The rich are more often recipients of the benefits of inflation.

Sun, 12/29/2013 - 15:21 | 4283521 Harbanger
Harbanger's picture

I'm sure the meme behind taxing 75% of their income, was to Tax the 1%.  And so it goes until socialists go bust and then blame the free market, or capitalism.

Sun, 12/29/2013 - 15:44 | 4283564 jonytk
jonytk's picture

France will be the next PIIGS in line, mark my words.

Sun, 12/29/2013 - 19:32 | 4284005 Promethus
Promethus's picture

PIFIGS?

FIPIGS?

IFPIGS?

SPIFIG?

Sun, 12/29/2013 - 23:24 | 4284426 Rory_Breaker
Rory_Breaker's picture

Once UK and Netherlands join along with France we'll have FUKINPIGS

Sun, 12/29/2013 - 16:02 | 4283601 logicalman
logicalman's picture

Free market?????

Let me know if you can find one.

Capitalism - as common as rocking horse shit.

 

Sun, 12/29/2013 - 16:10 | 4283621 Harbanger
Harbanger's picture

You know that.  But it won't stop them from blaming anything but themselves.  There's always a new Straw man to serve as cover.

Sun, 12/29/2013 - 15:07 | 4283485 garypaul
garypaul's picture

Exactly. That's the playbook 101. And to prove that I know what I'm talking about, watch this "two year" tax period get extended, and then extended again, etc.

Sun, 12/29/2013 - 15:08 | 4283496 malikai
malikai's picture

It's a crisis. We must all pitch in and do our part!

For solidarity.

Sun, 12/29/2013 - 16:05 | 4283611 silvermail
silvermail's picture

"It's a crisis. We must all pitch in and do our part! For solidarity".

When you say the word "we" who exactly do you mean - we are slaves or we - the owners of slaves?

Sun, 12/29/2013 - 14:43 | 4283435 mrdenis
mrdenis's picture

You didn't earn that money you worked  for ........your government  did.

Sun, 12/29/2013 - 15:53 | 4283582 SilverRhino
SilverRhino's picture

Wonder how Johnny Depp feels about that.    How's that socialism working out for ya champ?   

(Disagree with his politics but he had the balls to act on his 'threats') 

Sun, 12/29/2013 - 13:02 | 4283232 Timmay
Timmay's picture

And when this "Fails"?, global bank account confiscation.....

Sun, 12/29/2013 - 13:26 | 4283281 agent default
agent default's picture

Blame it on Switzerland.

Sun, 12/29/2013 - 15:11 | 4283503 Headbanger
Headbanger's picture

Non!   Blame Canada!    Blame Canada!

http://www.youtube.com/watch?v=bOR38552MJA

Sun, 12/29/2013 - 13:40 | 4283319 Long-John-Silver
Long-John-Silver's picture

Anyone with money in a Bank deserves to get what's going to happen to them.

Mon, 12/30/2013 - 08:55 | 4284806 j0nx
j0nx's picture

Says the guy who lives in his mom's basement and doesn't have any money to keep in the bank anyway. Get the fuck outa here. Where else are you supposed to keep large amounts of cash? In your house where it will burn down or get stolen? Same with gold. Unless you have your own personal vault then good luck with that.

Sun, 12/29/2013 - 13:05 | 4283233 Unpopular Truth
Unpopular Truth's picture

2 wolves and 1 sheep voting what's for dinner.

Sun, 12/29/2013 - 14:36 | 4283421 Leopold B. Scotch
Leopold B. Scotch's picture

18 morons and 1 farmer voting on who gets to run the farm.

Sun, 12/29/2013 - 15:01 | 4283473 TheGardener
TheGardener's picture

Would hate to admit to be assimilated : that one farmer on subsistence is me.

Sun, 12/29/2013 - 15:33 | 4283530 Harbanger
Harbanger's picture

Every time they try letting morons run the farm they all starve.

Sun, 12/29/2013 - 13:04 | 4283234 The Merovingian
The Merovingian's picture

I love cursing in French, it's like wiping my ass with silk ...

Fuck You ObernYellen!

 

Sun, 12/29/2013 - 13:14 | 4283260 Tinky
Tinky's picture

Poor choice of metaphor, as cotton is much more absorbent. 

Sun, 12/29/2013 - 13:28 | 4283291 RafterManFMJ
RafterManFMJ's picture

Perhaps French shit is like that of rabbits and deer; hard and pebbly?

Sun, 12/29/2013 - 13:28 | 4283293 Pure Evil
Pure Evil's picture

That's just a smear on both fabrics.

Sun, 12/29/2013 - 18:58 | 4283956 Calmyourself
Calmyourself's picture

Merovingian, your wife's hot... 

Sun, 12/29/2013 - 13:04 | 4283239 A Lunatic
A Lunatic's picture

Why bother trying to be successful anymore.......??

Sun, 12/29/2013 - 13:10 | 4283251 I am Jobe
I am Jobe's picture

Same happening in USSA

Karl Marx Won. Whoo hoo

Sun, 12/29/2013 - 13:22 | 4283278 Bananamerican
Bananamerican's picture

last i looked, the amerikan oligarchy was firmly in the saddle.....

Sun, 12/29/2013 - 13:37 | 4283314 Buckaroo Banzai
Buckaroo Banzai's picture

"As BBC reports, the levy will last two years..."

Oh shit that's funny.

Sun, 12/29/2013 - 13:50 | 4283345 seek
seek's picture

But it's true!

(in year three they raise it to 80%)

Sun, 12/29/2013 - 15:43 | 4283569 Harbanger
Harbanger's picture

That's like Boris' russian chocolate rations.

Sun, 12/29/2013 - 15:40 | 4283560 kchrisc
kchrisc's picture

But who's riding them?!

Hint: They can 'return' when the horse buckles.

Sun, 12/29/2013 - 13:13 | 4283258 Abrick
Abrick's picture

Two years of paying a lot of taxes. How many sheep spend a decade or more slogging away to get a chance at a better life?

 

Sun, 12/29/2013 - 13:28 | 4283289 IPA
IPA's picture

Yea it is only a temporary tax... Until it isn't 

Sun, 12/29/2013 - 14:05 | 4283341 Beam Me Up Scotty
Beam Me Up Scotty's picture

It becomes permanently temporary. Or temporarily permanent.

Sun, 12/29/2013 - 16:14 | 4283640 silvermail
silvermail's picture

Nixon rejection for exchange dollars to gold in 1971, too, was only "temporary".

Sun, 12/29/2013 - 15:11 | 4283497 FredFlintstone
FredFlintstone's picture

I downshifted when our leader claimed that $250,000 in annual income was rich. I work maybe 40 hours/week now instead of 50, 60, 70. Kinda bored now and not even 50 yet.

Sun, 12/29/2013 - 16:04 | 4283616 logicalman
logicalman's picture

There's lots of things you could do with the free time, you only have to look around.

Boredom comes from within, not without.

Sun, 12/29/2013 - 18:27 | 4283894 FredFlintstone
FredFlintstone's picture

I have looked around... and around and around.

Sun, 12/29/2013 - 16:02 | 4283608 logicalman
logicalman's picture

Does money equate with success?

 

Mon, 12/30/2013 - 05:53 | 4284708 trader1
trader1's picture

success is an abstract concept.  

 

Sun, 12/29/2013 - 13:09 | 4283244 JLee2027
JLee2027's picture

These idiots never figure out that raising taxes to this level does not generate any additional income.

Sun, 12/29/2013 - 13:30 | 4283296 RafterManFMJ
RafterManFMJ's picture

75%!? SACK LAY BLEW!!!

Sun, 12/29/2013 - 14:01 | 4283358 Bananamerican
Bananamerican's picture

a tootleoo and orf whar "productive class"

Sun, 12/29/2013 - 21:52 | 4284239 libertarianadvocate
libertarianadvocate's picture

Seems to me that there's something intrinsic to the nature of idiots that prevents them from figuring ANYTHING out.

Sun, 12/29/2013 - 13:13 | 4283252 Atomizer
Atomizer's picture

Cyprus bail in, Part II.

Sun, 12/29/2013 - 13:23 | 4283275 disabledvet
disabledvet's picture

I agree. For all of Japan's problems one they don't have interestingly is a huge unemployment rate. These high taxes will not aid in creating a "jobs explosion." If they need to bail out a bank (cough cough...Volcker Rule...cough, cough) the this might explain things.

Sun, 12/29/2013 - 13:28 | 4283292 Atomizer
Atomizer's picture

Basel III accord. Winks

Sun, 12/29/2013 - 13:14 | 4283253 sheikurbootie
sheikurbootie's picture

Taxing ALL government employees 95% would be a better solution.  The government produces nothing.

Sun, 12/29/2013 - 13:20 | 4283272 Uncle Remus
Uncle Remus's picture

Firing all government employees...

Sun, 12/29/2013 - 13:32 | 4283299 Pure Evil
Pure Evil's picture

Then wouldn't at least 65% or more of the French be unemployed?

Sun, 12/29/2013 - 13:48 | 4283333 Uncle Remus
Uncle Remus's picture

Put them to work at the deportation depots.

Sun, 12/29/2013 - 15:11 | 4283502 malikai
malikai's picture

That sounds like a government job.

Why not just deport all the government employees? Wait that sounds familiar..

Sun, 12/29/2013 - 18:22 | 4283874 Uncle Remus
Uncle Remus's picture

Workfare. Tell'em the guy they are repatriating probably left a job.

Sun, 12/29/2013 - 15:55 | 4283593 kchrisc
kchrisc's picture

Actually all of them destroy, most of them destroy more. Some are able to destroy even life itself.

Someone paid by theft, taxes, to sit at a desk and play Tetris produces nothing, but consumes what others have produced. I.e. they consume/destroy the production of others.

Someone paid by theft, taxes, to come up with and/or enforce regulations not only destroys current production, but future production that is hampered by the regs.

Some in the act of destroying production can and also destroy life. I.e. your local gun and badge thug.

For a good example of all three at work, search for "milk raw raids"

"The guillotine just follows orders too."

Sun, 12/29/2013 - 13:13 | 4283256 JustObserving
JustObserving's picture

Once you spy on your judges like they do in the land of the free, you can get anything passed.  They could have gotten 100% tax approved if they so desired.

The US Supreme Court will soon rule that infinite NSA spying on Americans in violation of the Constitution is valid and necessary. Fascist, police states are so predictable:

The most extraordinary passage in the memo requires that the Israeli spooks “destroy upon recognition” any communication provided by the NSA “that is either to or from an official of the US government.” It goes on to spell out that this includes “officials of the Executive Branch (including the White House, Cabinet Departments, and independent agencies); the US House of Representatives and Senate (members and staff); and the US Federal Court System (including, but not limited to, the Supreme Court).”

The stunning implication of this passage is that NSA spying targets not only ordinary American citizens, but also Supreme Court justices, members of Congress and the White House itself. One could hardly ask for a more naked exposure of a police state.

http://www.wsws.org/en/articles/2013/09/13/surv-s13.html

Sun, 12/29/2013 - 13:34 | 4283302 disabledvet
disabledvet's picture

I highly doubt the NSA isn't doing anything that every other Federal Agency isn't already doing. What matters in my view is unlike any other Agency the NSA works directly for the President. In other words any actions done wrongfully and with willful intent falls directly in the lap of the White House. I am surprised a Federal Judge has already decided to "go there" and declare the program "basically illegal." I am not surprised another has ruled it is not. No one has asked the question of whether or not anyone has been harmed by these programs however. This could have very profound implications both for Wall Street and financing "pretty much anything" if this isn't handled in the right way. "Eye Spy" is not how capital formation works. If in fact it is how capital formation is unwound...well, lays just say there are some highly capital intensive projects underway right now and it would be a good thing for everyone of these projects saw the light of day.

Sun, 12/29/2013 - 14:43 | 4283429 max2205
max2205's picture

I want to bank where the NSA banks

Sun, 12/29/2013 - 23:30 | 4284431 Plata con Carne
Plata con Carne's picture

Surprise, another judge has ruled it is not illegal.  http://www.thenewamerican.com/usnews/constitution/item/17263-ny-judge-ns...

 

Sun, 12/29/2013 - 13:16 | 4283257 bigfire
bigfire's picture

And the other club are now eyeing the coming firesale of these top talents that cannot be paid in France.  Free trade is good.

Sun, 12/29/2013 - 13:19 | 4283265 Uncle Remus
Uncle Remus's picture

"Tax the rich

feed the poor

'til the are no

rich no more."

 

http://youtu.be/8FQZVH9mBT8

Sun, 12/29/2013 - 13:17 | 4283268 Atomizer
Atomizer's picture

Larry David meets Krazee Eyez Killah. The crazy eyed Frenchman reminded me of this episode.

/sarc

 

Sun, 12/29/2013 - 13:20 | 4283270 Seasmoke
Seasmoke's picture

Looks like a perfect reason to go on vacation for ALL of 2014.

I will be back in the office in 2015. Please leave a message after the beep.

Sun, 12/29/2013 - 13:27 | 4283285 Silverhog
Silverhog's picture

Should be called the Cricket Tax. That's all they are going to hear after the wealthy jump ship. 

Sun, 12/29/2013 - 14:20 | 4283385 Jorgen
Jorgen's picture

Should be called the Cricket Tax. That's all they are going to hear after the wealthy jump ship.

U.S. style exit tax of say 90% may be next in France...

Sun, 12/29/2013 - 13:25 | 4283287 _ConanTheLibert...
_ConanTheLibertarian_'s picture

The levy will last 2 years........and will surely be extended indefinitely after that.

Sun, 12/29/2013 - 15:06 | 4283491 Winston Churchill
Winston Churchill's picture

The UK income tax was temporary to fund the Crimean war.

The war ended,the tax not so much.

Sun, 12/29/2013 - 13:31 | 4283297 redwater
redwater's picture
Guillotine

 is a french word.

Sun, 12/29/2013 - 13:35 | 4283307 GVB
GVB's picture

+1

Sun, 12/29/2013 - 13:40 | 4283324 redwater
redwater's picture

Fun fact:

1977 was the last guillotine beheading in France.

Not too long ago, qui?

Sun, 12/29/2013 - 14:07 | 4283368 A Lunatic
A Lunatic's picture

Yes and it is often translated; "might as well put your balls in a box under the bed since you won't use them".........

Sun, 12/29/2013 - 15:59 | 4283600 kchrisc
kchrisc's picture

And AR-15 is American English.

Sun, 12/29/2013 - 13:34 | 4283305 RaceToTheBottom
RaceToTheBottom's picture

But it won't kick in till wages go above the minimum wage, so onward....

Sun, 12/29/2013 - 13:34 | 4283308 El Tuco
El Tuco's picture

Does anyone think there are any rich folks left in France? If there are, it is as citizens of Bermuda, Singapore or some other tax friendly haven. The real Rich are stateless. They don't need a country to rely on. They come and go as they please on private jets. When your worth a 500 mil or more the world is your country. France is going after what has probably become the middle class. 1 m euro's is not that much. People inherit that.

What this is is the gouging of the middle class...the rich don't pay taxes....Bitchez...

Sun, 12/29/2013 - 14:37 | 4283378 Jorgen
Jorgen's picture

What will Putin do? What will he do? With flat 13% income tax, Moscow has already the highest concentration of multibillionaires of any city in the world. Adding some from France might be a nice addition to that collection...

Sun, 12/29/2013 - 14:32 | 4283412 DeliciousSteak
DeliciousSteak's picture

Funnily enough, your post is almost a copy of one of Hitler's famous speeches. And round and round the hamster wheel goes...

Sun, 12/29/2013 - 15:04 | 4283480 FredFlintstone
FredFlintstone's picture

You make some good points, but the tax starts at 1 million Euro in earned income, which is a lot. You ought to admit that much. Few CEO's in the US make that. Much of what they make is in stock options. You know $650,000 salary, $8.3M in options...

Sun, 12/29/2013 - 16:15 | 4283644 RKDS
RKDS's picture

Look at this mook saying a million bucks isn't that much.  Talk about out of touch.

Sun, 12/29/2013 - 13:35 | 4283311 redwater
redwater's picture

I like some of their yellow coins.

I have one with a rooster. Another one with an angel on it.

Sun, 12/29/2013 - 13:38 | 4283312 Atomizer
Atomizer's picture

This statist [étatisme] group is the proud founder of, ‘if it’s moving tax it.’

As city cycling grows, Chicago weighs bike tax

Sun, 12/29/2013 - 18:27 | 4283886 Uncle Remus
Uncle Remus's picture

Stevie Ray Taxman

Sun, 12/29/2013 - 13:45 | 4283329 bwh1214
bwh1214's picture

Socialism won't survive the decade.  Soon they will run out of other people’s money.

 I’ve had debates with socialists and when I bring up the parallels between the US debt 17t to their income 2.5t borrowing an additional .8t each and every year and a family with a 1.7 million dollar mortgage, 250k of income, and borrowing an additional 80k a year to maintain their standard of living I always get blow back saying a nation is nothing like a family.  While I agree a nation has more tools at its disposal to put off default, it is just as inevitable though since they have those tools to put it off, that default will be even more painful.

A family will lose its ability to borrow far sooner than say a city, which has the ability to raise taxes and access to the muni market with all its tax exemptions.  Yes where if Detroit were a family it would have been bankrupt in the ‘80’s or ‘90’s, but with those extra tools it was able to last, granted ever deteriorating until this past year, but it was much worse then it would have been back in the ‘80’s where pensioners and debt holders would have gotten a good percentage of their money back and the city would not have been destroyed.

Now look at the Nation, sure much different then a city, with even more tools.  Access to the most liquid bond market in the world, more powerful threats to our creditors, and of course the printing press. But like Detroit these tools will not stop the inevitable bankruptcy.  It will crash but be much more devastating if we were forced to face the music when a family would be forced into bankruptcy.  It should have happened for us in the late 60’s early 70’s when we still had manufacturing capital.  Now that has dwindled to next to nothing along with countless other debacles that will cause us to be worse off after the default/bankruptcy/crash.

France is in the same boat and getting desperate.  They should read their countryman’s works Fredrick Bastiat.

 

Sun, 12/29/2013 - 13:58 | 4283355 artless
artless's picture

"Socialism won't survive the decade.  Soon they will run out of other people’s money."

Haha. That's a good one. Problem is it will just be replaced with Fascism. Which in reality is what we, France, England, and pretty much everyone else already have. It's been that way in Shitmerica for generations.

THAT is coming to an end but I doubt it will end this decade. They still have a bit more killing, looting, and thugging to do. The sheeple aren't quite feelin' it just yet.

The French, however, complete fucking idiots that they are, voted en masse for this shit and in the words of Mencken they're gonna get it good and hard. Just remember these folks are the savages that brought about the Reign of Terror AFTER their so-called revolution. Not the brightest bulbs.

Shit you raise the pretty much free=as-shit tution and they start burning their own suburbs. Yes, this is gonna end well. These fucktards will end socialism and get all giddy about liberty.

Not a chance.

Sun, 12/29/2013 - 14:29 | 4283400 bwh1214
bwh1214's picture

Lol, your right, let me clarify. I guess what I was saying is this upswing in socialism will end within the next decade. The tools the US and other governments allow them to extend their social programs and redistribution for longer than would be possible under more rational monetary policy. That said they are about to the end of their rope with what these tools will allow. There will be a crash and after that crash there will be a swing back toward freedom if for no other reason the government will lose its power over the population. Socialism will increase in the coming years, but I don’t think it will work much past mid-decade and the swing back the other way will commence. I also believe since the swing toward socialism has reached such a high pinnacle the swing back will be very violent and by the end of the decade though there may be some remnants of socialism, relative to what we have now it will nearly disappear. That’s not to say it won’t rear its ugly head again in the decades to follow.
You were right I needed to be called out on that comment a bit.

Sun, 12/29/2013 - 14:45 | 4283438 El Vaquero
El Vaquero's picture

Yes, well, if you topple the dollar, you do significant damage to our ability to import oil.  Since oil is needed to do a lot of things with the way our society is currently set up, including many "vital" government functions, you will remove much of the federal government's ability to actually get things done.  (Since much of what it gets done is bullshit, this isn't exactly a bad thing.  That an enormous portion of our oil use goes towards food production and distribution is a bad thing.)  In short, based on the reduction in claims to a key natural resource, toppling the dollar would make the federal government much less relevant.  The problem is, as things go to shit, I would expect the federal government to become very dangerous as it panics trying to hold onto power. 

Sun, 12/29/2013 - 15:03 | 4283477 bwh1214
bwh1214's picture

Well said. Yes this is some of the lines down which I was thinking.  You are also right that the government could become dangerous with the wrong leaders at the helm, Obama and Hillary to a lesser extent would be some that would be dangerous.  Others like Rand Paul or even a Paul Ryan I think could point us in the right direction.  For things to go well though the “correct” people need to take power AFTER the crash, or they will be blamed for it.

Sun, 12/29/2013 - 15:09 | 4283499 El Vaquero
El Vaquero's picture

I think we are going to need the common man to step up to the plate for once.  Maybe not so much common, but people who aren't currently part of the existing power structure.  I also don't see the US surviving as a nation if our access to oil gets cut off or significantly reduced.  There is simply too much bureaucracy, taxation and bullshit in place that will be at odds with the reality of the situation and it will tear the fabric of our society.  Property tax is a big one.  As states, counties and municipalities try to extract what does not exist, then turn to confiscation to maintain their existences, it will make people very, very bitter. 

Sun, 12/29/2013 - 15:57 | 4283596 bwh1214
bwh1214's picture

Don’t be so hopeless, but be wary of that "person" you talk about that is not part of the current power structure saving us.  Not that I would be completly against it but as history shows us people that come to power after crisis can be very dangerous indeed.  You make good points but I still believe the United States will do the right thing after exhausting all other options.  Their options are just about out so I hope the right thing is coming up soon.

Sun, 12/29/2013 - 16:30 | 4283675 El Vaquero
El Vaquero's picture

Problem is, doing the right thing will take time as it involves restructuring our economy for not-so-cheap oil.  This means telling big ag, banking and medical lobbyists to fuck off when they show up with campaign contributions (bribes.)  It also means convincing people to produce and consume local products and staying out of their way when they do it.  These kinds of shifts take time, and after exhausting all other options, it will be too late.  We can't even get them to seriously consider a full audit of the Fed when it not only needs an audit, it needs to be ended. 

Sun, 12/29/2013 - 14:00 | 4283360 BAINES03
BAINES03's picture

During the "greatest" generation 1945-1963 the federal income tax on the richest in this country was over 90%.  But over the years they've brainwashed the american people into calling it Socialism.  Who are the real suckers?

Sun, 12/29/2013 - 14:45 | 4283432 bwh1214
bwh1214's picture

You on the other hand make a horrible point.  The first and most important point is those amazingly high tax rates were to fund world war 2 not for social programs.  The rich and most productive, rightly, should be more than happy to fund a war effort against a real threat in the Japanese and Nazi’s.  If not there is a real threat of being taken over and all those riches are for naught.  Common defense is a legitimate function of the federal government and properly exercised during world war 2, though those tax rates should have been immediately dropped after fighting stopped and were not.

Second, and though I have done the research I will not lay it out before you, no one and I mean no one paid those rates particularly after the war, there was loop hole after loop hole.  The numbers to look at are the percentage of total tax revenue paid by each income bracket.  The rich pay far more then they have ever done even during times of higher income tax brackets.  Please look into it, its clear. 

What is unfair is the government handing out money to the banks through QE (that’s why New York City and suburbs are so rich without producing jack we need) as well as handing money to government workers and contractors ( that’s why Washington DC is so rich with producing jack we really need).  Money going to people in all other sectors of the economy is being acquired from real wealth creation and is rightly earned and should not be taxed for the benefit of others, those others are already benefiting from the wealth created, (think of the oil companies supplying oil to the country, Apple supplying cool gadgets, builders producing houses, and farmers producing food.   

Troll, moron, or ignorant, there can be no other choice when making a comment like that.  I hope it is ignorance and you can educate yourself and see the light.

Sun, 12/29/2013 - 14:55 | 4283456 mrdenis
mrdenis's picture

Plus we now have a plethora of taxes that wern't around back then sales tax property tax lower SSI and medicare (tax)...taxes and fees on utilities .Most Americans are paying 60% + of their incomes in taxes already ...but their too interested in DWTS to realize it ...yet 

Sun, 12/29/2013 - 14:58 | 4283471 FredFlintstone
FredFlintstone's picture

Throw in the Alternative Minimum Tax, AKA The Millionaires Tax that hits a lot of upper middle income families.

Sun, 12/29/2013 - 14:46 | 4283441 El Vaquero
El Vaquero's picture

Sure, that was the rate.  Is that what they actually paid though? 

Sun, 12/29/2013 - 14:59 | 4283467 BAINES03
BAINES03's picture

Oh, I'm sorry.  I didn't realize everyone on Zero Hedge was in the richest 1%.

Sun, 12/29/2013 - 15:02 | 4283474 El Vaquero
El Vaquero's picture

Far from it.  I think it's more accurate to say that most on ZH would repeal the 16th Amendment and end the Fed if they could.  I junked ya for such an idiotic comment.

Sun, 12/29/2013 - 15:06 | 4283487 bwh1214
bwh1214's picture

What does that matter?  This gets me to another point, just because I am not in a class doesn’t mean I don’t support their rights, that is the problem with how most people and politicians vote.  They vote for what they think is in their best interest and not what is best for the country as a whole.  

Sun, 12/29/2013 - 16:10 | 4283627 logicalman
logicalman's picture

Vote???

WTF?

Sun, 12/29/2013 - 14:53 | 4283459 FredFlintstone
FredFlintstone's picture

Not sure how long it will last, but I appreciate you using the actual national income of $2.5T. It drives me crazy when the MSM uses national debt to GDP ratios. If that is the case then they need to add in ALL puplic AND private debt.

Sun, 12/29/2013 - 15:19 | 4283516 bwh1214
bwh1214's picture

And that is at about 58 trillion and even more important then the federal debt.  I love this chart.

 

http://www.acting-man.com/blog/media/2013/07/total-credit-market-debt-and-GDP.png

 

 

Compare where we are now to when Volker was called upon to kill inflation.  We are debt saturated, and our monetary system needs ever increasing debt and credit to survive, if not is collapses.  This is why the collapse is coming.  When you look at that chart just think what are the things you think of if you were considering a loan to someone, total debt and income right? Well this chart shows that.  Uh oh.

Sun, 12/29/2013 - 18:13 | 4283858 Withdrawn Sanction
Withdrawn Sanction's picture

Debt Saturation also helps explain why velocity has been dropping like a stone since 2008.  With a dysfunctional credit mechanism, it's impossible for injections of money (no matter how big) to stimulate jack.

Until and unless the build up of bad debts are worked out (not merely transferred to the central banks of the world), there will be no meaningful economic recovery.  The longer the economic recovery takes to gain traction, the more discontented the masses become.  The more discontented the masses become, the more nervous and dangerous politicians become .  The more nervous politcians become, the more trigger happy their henchmen in the police become and the more prurient the perverts in their spy agencies beome.

Sun, 12/29/2013 - 18:25 | 4283889 bwh1214
bwh1214's picture

The drop in money velocity is very easy to explain without touching debt saturation actually. Each injection of QE has mostly stayed at the fed as excess reserves earning interest for the banks. This money has zero velocity, is a large portion of the money supply and thus is dragging down the total velocity of the money supply. It will leak out though and eventually cause problems. Velocity is much more important then I think people give it credit for. Our economy could experience hyperinflation with a trillion dollars in circulation 10 trillion or 100 trillion, granted it would be easier with the larger amounts of money but the velocity is just as important if not more so than the money supply.

Mon, 12/30/2013 - 09:04 | 4284820 Singelguy
Singelguy's picture

At some point, a substantial portion of the debt will have to be written off and then the process can start all over again. It seems to be working in Iceland. France is likely to face a crisis in 2014. Government in France is already 56% of GDP. With a 75% millionaire's tax, the government will likely receive less tax revenue resulting in a deficit exceeding the 3% rule and Hollande will have no choice but to cut services. Queue more protests, riots and social unrest.

Mon, 12/30/2013 - 11:14 | 4285034 bwh1214
bwh1214's picture

Sure what your saying is the US government will and other borrowers will default, but we, and since we are on a debt based monetary system and have the reserve currancy, it would cause a total reset.  A write down like you say = a total reset of the system and won't be an easy transition.  By not easy I mean it will cause such economic turmoil that many will die in the United State, my mission right now is to make sure my family and I are not one of them.

Sun, 12/29/2013 - 18:22 | 4283875 FredFlintstone
FredFlintstone's picture

Yep, that's the number: TCMOD Total Credit Market Debt = Public + Private + Corporate. $58 trillion debt, $15.8 Trillion income. a ratio of 3.7 to 1. We are mortgaged to the hilt for sure. Thanks for the info :(

Sun, 12/29/2013 - 13:43 | 4283330 eddiebe
eddiebe's picture

The nouveau tower of Babel keeps growing.

Sun, 12/29/2013 - 13:44 | 4283331 toadold
toadold's picture

Hmmm, might be an opportunity to get a lightly used  mature French Woman?

Sun, 12/29/2013 - 13:46 | 4283335 Uncle Remus
Uncle Remus's picture

Probably have better luck finding a virgin.

Sun, 12/29/2013 - 15:38 | 4283548 toadold
toadold's picture

OH good grief, at my age I don't want to deal with a virgin.....unless she's a 50 year old nun jumping ship. 

Sun, 12/29/2013 - 13:47 | 4283337 The Heart
The Heart's picture

ATTENTION ALL HANDS ON DECK!!!

Not sure if you all have seen this but, ALERT, ALERT!!!!!

Two to three days until the impact of the new wave of radiation is to hit the US West Coast.

Five to six days until it hits the mid-west. Seven to nine days until this hits the east coast. Protect yourselves accordingly NOW!

** NEWS FLASH -- URGENT ** STEAM SUDDENLY EMANATING FROM FUKUSHIMA REACTOR # 3 - WEST COAST OF NORTH AMERICA SHOULD BEGIN PREPARATIONS FOR POSSIBLE RADIATION CLOUD:

http://www.turnerradionetwork.com/news/146-mjt

 

Sun, 12/29/2013 - 14:39 | 4283427 HardlyZero
HardlyZero's picture

Kauai Reporting Huge Radiation Spikes, TEPCO Reports Fukushima is Steaming Away, Dec 24, 25, 27.

http://beforeitsnews.com/survival/2013/12/kauai-reporting-huge-radiation-spikes-tepco-reports-fukushima-is-steaming-away-dec-24-25-27-2504082.html

Sun, 12/29/2013 - 14:55 | 4283462 mrdenis
mrdenis's picture

Thats going to be a better show than times Sq on New years eve .........

Sun, 12/29/2013 - 18:17 | 4283861 Withdrawn Sanction
Withdrawn Sanction's picture

"Protect yourselves accordingly NOW!"

Appreciate the heads up, but "protect yourself" exactly how?

Sun, 12/29/2013 - 13:51 | 4283340 Curt W
Curt W's picture

So wait, what?  At the end of the year you find out you owe 75% of your earnings to the government, now that you have already spent most of it.

Sun, 12/29/2013 - 13:52 | 4283343 Heroic Couplet
Heroic Couplet's picture

How is what goes on in France of any interest to the Faux News Medicare crowd? it isn't. Of interest is the community that is producing mortgages and housing outside the usual bank cartel, the hedge funds, and the people with money sitting in offshore accounts. The housing community produced outside the criminal bank cartel gives hope for Detroit. LOL.

 

Sun, 12/29/2013 - 21:56 | 4284251 Emergency Ward
Emergency Ward's picture

Don't get your hopes up HC, the fucking Fed-Gov Control-Freak Parasites will find a way to intervene and fuck up Detroit's renaissance once thy see it might actually be working without them.  FOX and MSNBC will be on the case.

Sun, 12/29/2013 - 13:56 | 4283349 Bo Peep
Bo Peep's picture

Great road network, no pot holes, joy to drive over there. Credit where is due.

Thought I'd be kind to the frogs for once

Right, back to this tax thingy.........Apartments for sale

Sun, 12/29/2013 - 13:56 | 4283353 Questan1913
Questan1913's picture

Notice this......it is directed at salaried individuals,not at interest income which is exempt.  There is the good side and the bad side of debt; those who receive interest income and those who pay iinterest out of their income. and there are those who make the laws and those who suffer under them.  This levy does not touch the .01 percent but to most will appear to be a new tax on the "rich".  Clever that.

Sun, 12/29/2013 - 14:10 | 4283376 artless
artless's picture

Just.

Like.

Here.

The greatest scam EVER pulled off was the 16th amendment. It not only did the deed of taxing WAGES (you know, the thing that the POOR use to get to the MIDDLE CLASS ) it also set up for the progressive income tax which is not only one of the primary requirements for MARXISM it PENALIZES achievement. Real good idea.

Tinker with whatever rates you want. The fact that someone who makes $100,000/yr pays a higher percentage than someone who makes $40,000/yr is patently absurd, irrational, immoral, and unfair.

And that comes from the keyboard of someone who have never grossed more than 60,000 in a year.

The uber rich or whatever label you choose to give them don't make a wage. They already have it. Some actually earned it. Made this shithole a better place. So because they HAVE more they should pay more?

If you believe in that then you are part of the problem and quite frankly a fucking Marxist/Socialist/parasite shitbag/whatever.

 

Sun, 12/29/2013 - 14:49 | 4283402 El Vaquero
El Vaquero's picture

Name any tax system and I can find somebody that it will treat unfairly.  This does not compute for some of the more staunch "conservatives" and I get called a "liberal" when I point it out.  In their minds, their precious flat-tax or "fair" tax is fair, damnit! 

 

Problem is, if we are going to have a state, we are going to have some form of taxation.  No, I'm not an anarcho-capitalist, because if you get rid of the state, I guarantee some group of psychopathic or control freak fucks will try to set up their own.  Have a state said group will try to take it over.  It's a real conundrum, and why Thomas Jefferson's quote about watering the tree of liberty makes so much sense to me.

 

Edit:  To be clear, I see the 16th Amendment as a very bad thing, as I also see property taxes as a very bad thing. 

Sun, 12/29/2013 - 17:27 | 4283779 artless
artless's picture

If you like your state, you can keep your state.

Just had to write that.

Answer is simple. Fee base EVERYTHING. Alex, I'll take Texas for $500/year. Imagine what the fee would be in CA or NY.But please explain how a flat tax is "unfair". Please remember that you get NO freebies. In other words NO mortgage deduction. NO deduction 'cause you feel the need to breed. NO deduction for that loss you took when the APPL shares you bought at $500 went to where they belong around $200. Just a simple % of what your income was. No matter how you got it. Whether you made it at $20/hr mowing lawns or because you're a master of the universe type who took some capital gains.

Disclaimer: I am an anarcho-capitalist and I do not endorse either method mentioned in this post. Just using the example for argument sake.

Sun, 12/29/2013 - 20:38 | 4284099 El Vaquero
El Vaquero's picture

The flat tax is unfair because the poor cannot afford to give up as big of a portion of their income and still make the necessities.  If they're only moderately poor or even lower middle class, it is a bigger chunk of their discretionary income that gets hit than somebody who is rich.  In other words, in terms of quality of life, that flat tax has a bigger impact on the lower income brackets.  Then again, progressive taxes are unfair because they punish success. 

 

You want no state.  I want whatever the fuck keeps control freaks out of my life, be they just people who get their panties in a bind over trivial shit, or sociopaths who derive pleasure imposing their will on others.  I don't think there really is a good solution to that problem, other than having a population that is armed, informed and willing to go down swinging. 

Sun, 12/29/2013 - 23:38 | 4284446 falconflight
falconflight's picture

Fuck the 'poor.'

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