Ca va couter cher

How much?

75% income tax on earnings over $1.3 million a year probably looks like a great gesture, but how much will it realistically bring in?

I am unlikely ever to fall into that category, but I can’t imagine many people who do feeling too happy about either moving to France to take on top jobs, or on staying put if they’re there already.

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4 Responses to “Ca va couter cher”

  1. jkprime Says:

    This is a much better solution than the terrible austerity plans that the UK government have been pursuing. The BBC article reports the changes will raise revenue by $20bn. Paul Krugman has weighed in on the issue of discouraging high earners several times including here: http://krugman.blogs.nytimes.com/2010/08/10/the-laffer-test-somewhat-wonkish/

    • christophersaul Says:

      I just can’t see it working – it smacks of gesture politics, envy, etc. There may be some solid economic sense behind it, but I remain to be convinced!

      • jkprime Says:

        Austerity measures are gesture politics, raising marginal rates on high earners is not. I am not sure what you see as the downside to this move by France? It’s possible that the very rich might leave the country, but there hasn’t been much evidence of this happening in the past, and I think 20bn in additional revenue is worth seeing whether it will happen today.

        We live in an era of incredibly low top tax rates. From the mid 30’s to 1980 the top marginal tax rate in the US was >70 percent, peaking at over 90% from 1950 to 1963. I’ll link to this business insider piece that has most of the charts: http://www.businessinsider.com/study-tax-cuts-dont-lead-to-growth-2012-9

  2. christophersaul Says:

    These levels of tax just seem bonkers (a technical economic term). It’ll be interesting to see if they do bring in the 20 bill and I can’t see how they will generate economic growth. I’m happy to be convinced if it works!

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