France says no more taxes

September 2nd, 2013 at 12:00 pm by David Farrar

The Telegraph reports:

Returning from their summer break, the French are about to discover stinging rises in bills in their letter boxes – the result of a series of new levies enacted by President François Hollande as he seeks to plug the French deficit and bring down public debt – now riding at 92 per cent of GDP.

But the extent of the hikes has apparently even shocked the very Socialist ministers who implemented them.

The total tax pressure (taxes and social security contributions) will account for 46.3 per cent of GDP this year – a historic high – compared to 45 per cent in 2012. …

The rich will see the highest rises, following Mr Hollande’s decision to raise the rate to 45 per cent for those earning more than 150,000 euros – effectively 49 per cent due to an additional levy.

This will be an aspirational target for Labour by the time their leadership primary is done!

In a clear damage limitation exercise, a chorus of top Socialists spoke out against any more rises.

Pierre Mosovici, the finance minister, told France Inter radio: “I’m very sensitive to the French getting fed up with taxes We are listening to them.” Laurent Fabius, the foreign minister followed suit, warning Mr Hollande to be “very, very careful” as “there’s a level above which we shouldn’t climb”.

One Socialist told Les Echos newspaper that the hand-wringing was totally hypocritical as “they are crying wolf, but the wolf is us.”

A cunning strategy. Pile on heaps of new taxes, and then claim to be against any more taxes.

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24 Responses to “France says no more taxes”

  1. Sir Cullen's Sidekick (788 comments) says:

    This is exactly what will happen here after the Labour-Green-NZ First-Mana government takes over in 2014.

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  2. duggledog (1,358 comments) says:

    Yes that’s right SCS.

    For six months until they implode.

    John Key’s mantra next year should be ‘Me or a Committee’ and rule out Peters. Then we’ll see how canny NZers really are. Or how stupid they are.

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  3. wikiriwhis business (3,883 comments) says:

    Coming our way….esp water meters and water privatisation like we don’t already know !

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  4. Harriet (4,521 comments) says:

    “….France has more need of me than I have need of France….” – Napoleon Bonaparte

    I bet there’s a fucken lot more now saying that! :cool:

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  5. thor42 (920 comments) says:

    Ahh, the left wing. Finally, France is seeing the “best” of what they have to offer – just like Greece did.

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  6. OECD rank 22 kiwi (2,811 comments) says:

    What’s the worry? Abbott’s Australia will act as a safe haven for New Zealanders.

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  7. flipper (3,562 comments) says:

    Yesterday, on Pork Barrel Politics, Flipper said:
    *************

    ” >>> These two fools obviously have not realised that the world of 2013+ is far, far different from the 1920s, 30s, 40s and 560s into which their concrete like gumboots set.

    The single greatest impediment to the US economic recovery is the power of the US teacher and State/Federal Government employee unions.

    The fact that the moronic MSM parrots the views of illiterates like Robertson, liars like Cunliffe, and worse, the likes of TV3′s Bruce and Campbell, is indicative of the danger in 2014 and 2017.

    It does not take a sensible and gifted economist like Oliver Hartwich to work out that if things progress on the same path through 2017, then by 2017 NZ will be near the top of the OECD income nations – provided, of course J. Key and W. English keep their heads, sell some more of the infrastructure assets, and don’t spend everything.
    Vote: Thumb up 14 Thumb down 2 <<<<
    *****

    What is NZ's Debt/DP % ? Mid 30s???, or thereabouts.

    Wonder what debt to GDP ratio would have been with F/wits like Minus T, Rainbow and the "Harvard" graduate, running the show.

    This news from Paris simply confirms that such folks should never be allowed to govern ANY country. My Australian colleagues tell me that Krudd will be buried this Saturday. But in NZ, the MSM will continue to promote the 14 ring circus and all the lunatic ideas advocated by The Three Mouseketeers. Silly.

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  8. wikiriwhis business (3,883 comments) says:

    “What’s the worry? Abbott’s Australia will act as a safe haven for New Zealanders.”

    The mantra of Kiwi Bloggers

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  9. Black with a Vengeance (1,552 comments) says:

    Ayo flipper…stick to swimming round your enclosed tank, making chirping noises, jumping through hoops and you might get Shearer to give you some fush!

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  10. wikiriwhis business (3,883 comments) says:

    Who remembers this one :)

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  11. peterwn (3,163 comments) says:

    France thought that they could tap into the City of London as a tax source via the EU. London has been called the 21st arrondissement (district) of Paris, but this was taking things too far. The French population of the 21st arrondissement is expected to increase because of the new high taxes.

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  12. PaulL (5,873 comments) says:

    There are two different dynamics going on in many western countries:
    1. The headline rates are raising less tax, due to lower income and profits from companies. Some of this is because of the downturn, some of this is because the high headline rates lead to tax engineering
    2. The ongoing tax and spend policies are leading to high debt, that debt has to be paid for, paying for the debt is a problem in itself.

    From the outside, an obvious answer would be to default on all the debt, push down the headline tax rates but close loopholes and make people actually pay the tax, push up the retirement age, get rid of the featherbedding in the govt sector, reduce over-generous entitlements, and ditch much of the red tape and obstruction to employment. This would then let the economies start growing again, which would increase tax revenues.

    The problem of course is that this would result in large losses for many people who were stupid enough to lend to these countries, and that it would be massively disruptive. And immediately the countries are solvent again, the stupid people (who unfortunately apparently make up > 50% of the population) would vote for the exact same policies that got them into trouble in the first place.

    Anyway, a cyclical recovery will eventually come, hopefully before the debts become unsustainable. That will then paper over the revenue holes until the next downturn – and nobody will decide to use that breathing space to repair the budget. Frankly, much of Europe thinks they’ve spent the last 3 years repairing the budget, without realising that all that pain and noise has only allowed them to hold still – they still have to take real pain if they want to fix the problem. It’s like you have a festering sore on your foot that probably requires amputation. Every week the doctor comes and cleans it with a wire brush, and you think you’re taking all the pain. But your foot still has a festering sore. It would have been better to amputate a year ago, then you wouldn’t have had the wire brush for the last year.

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  13. freethinker (681 comments) says:

    Hollande is right France is different which is why their taxes need to be different and higher – much higher, because the French are so different they will happily pay up uncomplaining – Vive la France. I may be wrong but good on Hollande for running the experiment whose results will become a template for others!! (Remove tongue from inside cheek – left side of course)

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  14. Weihana (4,496 comments) says:

    flipper (2,324) Says:
    September 2nd, 2013 at 12:28 pm

    What is NZ’s Debt/DP % ? Mid 30s???, or thereabouts.

    Wonder what debt to GDP ratio would have been with F/wits like Minus T, Rainbow and the “Harvard” graduate, running the show.

    Yup, debt to GDP is about mid thirties. Do you know when it was last in the mid thirties? About 1999.

    http://www.tradingeconomics.com/new-zealand/government-debt-to-gdp

    By 2008 it was 17.4%, it’s lowest point since.

    No I’m not saying National is responsible for a global recession. Just pointing out some facts for consideration and observing that the left has been in government before.

    And strangely enough a couple of highly vilified policies of the left have been retained by the economically sound National Party.

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  15. Weihana (4,496 comments) says:

    DPF,

    The total tax pressure (taxes and social security contributions) will account for 46.3 per cent of GDP this year – a historic high – compared to 45 per cent in 2012. …

    …A cunning strategy. Pile on heaps of new taxes…

    Fair enough if you think lower taxes are always preferable and the best way to address economic ills… but an overall rise of 1.3% is “heaps of new taxes”?

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  16. Ed Snack (1,738 comments) says:

    wikiriwhis business, I not only remember, I’ve been on the Seaspray, and my Uncle was the Director/Producer !

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  17. PaulL (5,873 comments) says:

    @Weihana, if you also accept that many taxes raise less revenue in bad times, then it’s possible to have heaps of new taxes and only just hold revenue constant. But when the economy improves again, it may turn out that there’s a bucket load of tax.

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  18. Weihana (4,496 comments) says:

    PaulL (5,370) Says:
    September 2nd, 2013 at 1:58 pm

    @Weihana, if you also accept that many taxes raise less revenue in bad times, then it’s possible to have heaps of new taxes and only just hold revenue constant. But when the economy improves again, it may turn out that there’s a bucket load of tax.

    If the economy improves does this not undermine the notion that increased taxation will produce worse economic performance?

    And if the economy does improve, and there is a “bucket load of tax” will this not be useful for paying down some of that debt?

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  19. PaulL (5,873 comments) says:

    1. If the economy improves it does not undermine the notion that increased taxation will produce worse economic performance. It could also just be cyclical. Sort of like the lack of warming in the last 17 years doesn’t disprove that CO2 drives warming, it’s just been outweighed by other factors for a while.

    2. The question wasn’t about whether or not the bucket load of tax would be useful. The question is whether there was a bucket load of tax.

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  20. stigie (909 comments) says:

    @Weihana

    And strangely enough a couple of highly vilified policies of the left have been retained by the economically sound National Party.

    If you are referring to interest free student loans and WFF, National had no option but to retain those policies in 2008,
    otherwise they would have been kicked in the arse and booted down the road in 2011 !!

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  21. Weihana (4,496 comments) says:

    stigie (156) Says:
    September 2nd, 2013 at 3:32 pm

    If you are referring to interest free student loans and WFF, National had no option but to retain those policies in 2008,
    otherwise they would have been kicked in the arse and booted down the road in 2011 !!

    Of course they have a choice. They have the choice to make decisions they think will produce results and to campaign on those results. Clearly they gambled that cutting those programs couldn’t be sold.

    Surely this government can take responsibility for its own policies?

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  22. freethinker (681 comments) says:

    The issue with new taxes is often the mental impact that can tip some into action such as leaving the country and like NZ expats only 10% of whom will return becomes a source of exporting often the better brains to greener pastures. People need trust and hope both of which are rapidly diminishing especially in Europe.

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  23. Tom Jackson (2,458 comments) says:

    The rich will see the highest rises, following Mr Hollande’s decision to raise the rate to 45 per cent for those earning more than 150,000 euros – effectively 49 per cent due to an additional levy.

    Not even close to some of the highest tax rates 50 years ago, when we were in the middle of the long boom.

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  24. hubbers (222 comments) says:

    The French only have themselves to blame. They voted for the socialists.

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