The left-wing French coalition hoping to introduce 90% tax on rich

I think it's a great target to aim for. That's an unfathomable income to most people, so it should at least have popular support

Worked fine in America during it's "great" days that all these Trump voters seem to yearn for

Love it. Wealthy in France is 200k, anyone who makes over 400k is uberwealthy

The NFP proposal would make the top 10% French pay more tax and the rest 90% would pay same or less tax. They want to introduce more tax "slices" to make it adjust more progressively with higher income.

Still good though, imo the win is that a big chunk of representatives are saying this is what the country wants.

I hope it gets done so they can fund social programs. But the rich will flee to Germany

Even if they do implement such tax, I wonder how many ways there are for rich people to avoid paying those taxes. They tend to be very good at skirting around such things. They even pay people who are professionals in the field of tax-around-skirting.

Maybe I’m just not used to the income needed in major cities in France, but that seems like pretty high tax rate for the income in major cities like Lyons or Paris. Can someone give me a little context? Does France do graduated brackets like the US? If that’s the case then I could see this being pretty fair.

Does no one here understand how incone taxes work? The 90% rate is on annual income over €400,000. Average annual income in France was €41,000.

The moving part is very real for the ultra rich in Europe.

I see fud used on a semi regular basis. It's fear uncertainty and doubt. And I don't think most people know that.

If your wealth is from owning a portfolio of apartment buildings, good luck taking those with you.

Sell it to a holding company incorporated abroad. Own shares of that holding company instead.

Wage-based taxation has always been an awkward way to target the rich.

Is it wages or is it income? Income covers much more than wages, and in a good system one would account for everything without loopholes. A comprehensive income tax that catches everything would go pretty far.

Wealth tax can be dicey, in theory. It would require a sell-off to actually have money that can be used to pay taxes, and the sell-off would change the value of the assets. For example, the S&P 500 is "worth" 46 billion dollars. That's more than twice the "money" that exists total, it's literally impossible to actually manifest all of that to dollars, so most of the "worth" cannot be "realized".

but in the case where someone’s wealth is based on their skilled labor they do have a much easier time just leaving. If your wealth is from owning a portfolio of apartment buildings, good luck taking those with you.

Nice one

Some of them, sure, but I wonder how many would consider it worth the price. This is an income taxe I'm assuming, so it's not like they'd lose out on actual wealth, investments, etc.

It might be worth it if even just half stay and pay the taxe.

Why would they move? This is an income tax, not a wealth tax and the wealthy typically have relatively little "income". Sure they may have a net worth of tens, hundreds, or even thousands of millions but their "incomes" (as defined by tax codes) can be surprisingly low.

Look at the CEOs like Steve Jobs and Jeff Bezos whose salary was a single US dollar. They were incredibly wealthy but had nearly no normal income.

So unless you jigger the tax code to capture the work arounds the wealthy use this income tax will hardly touch them. It will only catch high wage earners, like a software dev working FAANG or something.

Besides, the mere fact of implementing those tax rates makes high end luxury homes less valuable, because rich people from abroad will have less incentives to want to move there. So, if rich French people want to move from a very expensive home in France to a very expensive home in Germany, the new one will have to be less luxurious, because they won't be able to sell the old one for that much.

Problem is that the Uber wealthy have all sorts of extra tax vehicles that even the 400k/year income folks don’t have. With various holding companies owning the various assets you use (e.g your car, house, etc.) your on-paper income can be quite a bit lower. Throw in various deductions and that’s how you get super wealthy people paying less taxes than “regular” people. Progressive tax rates already exist, and while this increases the percentage at these incomes, unless it addresses all the other loopholes, this will conveniently miss the 1% and instead impact high earning professionals.

This does actually happen more than you think - it’s why all the world’s football and tennis stars miraculously decide to move to Monte Carlo as soon as they hit the riches. Which is exactly why we need a coordinated tax policy at an EU, EEA or global level, to make sure that you can’t just choose a neighbouring country and pay an order of magnitude less.

Radical means change or far from the norm, so when the system we live in is crazy then radical often is rational. The terms are not opposed.

"Rational"

"Petrol price controls"

That's true, but taxing wealth is significantly harder than taxing income or financial transactions (including inheritances).

This type of taxation I would say is a version of the Ultimatum game. If the taxation is too high, they simply move and then you get nothing

https://en.m.wikipedia.org/wiki/Ultimatum_game

It has to be high enough, but not so high that they just move to Switzerland

The answer would be of course they have income, and we have to adequately recognize it as such.

Borrowing money against stocks? Income. Capital gains on high value or nonessential assets (e.g. non-primary residences and stock)? Income.

Actual money has to come in at some point to manifest that lifesytyle and that is obviously income.

Thx stranger, so hard to get news from a single source if you're not a specialist on the topic

It's not just Macron or Ensemble, even within the NFP some parties don't want Melenchon from what I understand. At least the PS (Parti Socialiste, but they're actually just social democrats) which has 59 seats and therefore the second most seats in the NFP doesn't want him to be prime minister.

Macron has already indicated that he will not allow Melenchon to become Prime Minister

Good news for LePen, I guess.

Actually, 90% income tax for the top incomes was common in western countries in the 50s.

Have you seen the word "income"anywhere here ? ISF (Impôt sur la fortune) is tax on wealth, this law would say that if someone is rich we take some of its money. We use to have it in France before Macron removed it. Also the same leftist group is advocating for more funding towards fighting tax evasion amongst the wealthy.

EDIT: my bad the article does talk about income tax, point still stand, NFP still advocate for the ISF

Have you no idea how capitalists function?

Actual communists are more intelligent than this.

Its just hilarious seeing 400k being wealthy my man. The really wealthy don't take a salary and instead have corporations and trust funds that pay them minimum salary and more stocks and shares. They then leverage these stocks and shares using cheap loans from their bank buddies for very low interest tates.

Income tax is a tax on the working class, not the capitalist class.

That's just a bad implementation, then. Tax brackets are progressive for a reason, having a cliff like that should be an obvious no no.

Not to say you don't have a point, because you do, but the govt could fix that particular issue very easily.

That's uh.... pretty fucking dumb.

How the fuck did anyone think a cliff like that would be smart.

You make it sound like a cliff, but you lose £1 of the £12.5k allowance for every £2 over £100k you earn. You don't suddenly lose the whole allowance at £100,001.

Laffer Curve is junk economics from Ronald Reagan's propaganda team. Cannot take seriously any argument that relies on it.

Shoot whoever wrote that bill. (Metaphorically)

National sport. It's fifth time now. If right would become too hard to fight against, then it will be sixth.

Most people who actually build everything do not have significant enough wealth to be affected. France doesn't need someone with significant wealth in order to build something. France can provide the financial capital. We do know that public investment spurs private investment, but private investment isn't strictly required.

Besides, we've already seen plenty examples of countries where people with significant wealth do not use it to build things in low tax destinations, especially where that low tax results in crumbling infrastructure and unstable labor and political climate.

I wonder whether the lost economic activity is actually worth more to the country than the money raised by the tax.

The answer is "yes" it's worth it. Answering "no" puts you in a race to the bottom which leads to dysfunctional economy and eventually some sort of political upheaval, during which wealth and factories are exceedingly likely to be taken away anyways. See history for references. Also every EUR creates more economic activity at the bottom, than the top. The vast majority of the aggregate demand in richer economies isn't comprised from the top 1%. The aggregate demand is what makes it worth making things and what drives significant private investment. Drive it down and there comes a point where no amount of tax cuts can offset it.

I think there is a significant distinction between "regular" working class and "earning above €400,000 per year" working class.

Argument is correct.

Tone is asshole.

Upvote or downvote? I'm not sure on this one.

Income from capital can be, and is, taxed differently. In the U.K. there is Capital Gains Tax, for example. Why not adjust this instead of income tax?

I don't know how France classifies "income", so it could be good at capturing income. It's our own fault when something that is obviously "income" doesn't technically count, in principle a tax system can capture everything that makes sense to count.

In the US, along with wages, interest income and dividend income also count as "regular" income and are taxed appropriately. Capital gains is... weirder and this is the first area ripe for opportunity to reform to capture "rich guy income is different than normal guy income", as long as it is intelligent about it (e.g. if you said, without qualification, all capital gains are taxed like crazy, then suddenly selling your house as part of moving becomes an unreasonable burden, which is why it already has an exemption, but just an example to say vaguely why we have to be careful about capital gains).

Then you get to the borrowing you mention, and I've seen a pretty reasonable approach to capture that as "income", in theory: https://equitablegrowth.org/closing-the-billionaire-borrowing-loophole-would-strengthen-the-progressivity-of-the-u-s-tax-code/

TL;DR: Currently borrowing doesn't count as realizing gains, change it so that borrowing counts as "selling" the stock, further mandating that the cost basis of all identical stock is a specific way rather than letting the shareholder pick and choose their most favored cost basis.

I'd be willing to concede some tax break on repayment of such a loan to reconcile "real income" being exchanged for it down the road, but at that point I think it would largely be academic because suddenly there's no point in borrowing against the stock rather than just selling it outright.

The... upper middle class....? An income of 400,000 euros? that's 10x the median income.

What tf is rich then?

I laugh so hard because the headline for me is great news, only now I realized it's sky news so it's supposed to be scaring people

Your instinct to search for a non-Murdoch source is correct, as they are trying to paint the entire NFP as holding the same positions as their most extreme member.

There is little to no chance of Melenchon becoming Prime Minister or having any ability to enact this tax.

However a marginal tax rate of 90% on income over €400k is well above the upper-middle class and would apply to only the wealthiest families, most of whom would still have other avenues to minimise the tax they actually pay.

400'000€ yearly income is not middle class. It is roughly the top 1%. Are you maybe mistaking property for income?

I would have preferred taxing on property instead of income, but as long as interests and profits and other benefits are part of income, it sounds reasonable to me.

Oh look, someone who doesn't understand how progressive tax brackets work.

The 90% only kicks in on any money made over €400k, bro. That means they're already making that 400k (less whatever the prior tax brackets are), and if they make €400,100 then only that extra €100 is taxed at 90%. This is so far from hurting "normal working people" that I can hardly believe your take isn't a deliberate troll.

I think “rich” nowadays starts at $1m usd/y. No one really needs more than that. I think 90% is a bit steep, but that leaves a lot of wiggle room for negotiation.