Monday, February 3, 2014
France's Deficit
In the end of 2013, President Francois Hollande plans to increase the amount of tax takes by an extra 3 billion euros. To meet this goal, Hollande will increase a top income-tax rate of 75% to households that make over one million euros a year. Although there are only 3,000 households with that income, their tax contribution will help Frances deficit. The President keeps his promise to tax the wealthy. Michala Marcussen argues that France must continue with structural reform. To do so, the government must look for ways of decreasing money that are being distributed In companies for example that have more than enough workers. France must make major changes in order to improve. Hollande is moving in the right direction by increasing taxation of the wealthy.
The main concern would be that residents are willing to move to another country due to Frances tax increase. Too much taxation might cause people to leave France and without their contribution, France’s economical issue will tremendously increase. In my opinion, France cannot afford to lose any of their citizens, more importantly, the wealthy ones per say. The tax increase could jeopardize any hope of getting out of economical deficit. By increasing tax rate to 75%, the 3,000 households must contribute three-fourth of their earnings to France. It seems a little too steep to force the wealthy to pay the majority of taxes. In the United States, the rich pay majority of the country’s income tax. In 2012, the top ten percent of taxpayers paid 70% of the total amount collected in federal income tax. In France, the top ten percent is paying over five percent on tax then in the United States. President Hollande should take a few pointers to help decrease France’s deficit from President Obama. This past year, there has been a decrease in U.S. deficit this past year. Hollande is definitely making baby steps to improving his economy; he just needs to start making leaps in order to get France out of the hole they are in.
Link: http://www.cnbc.com/id/101300969
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I was so astonished to read that the "super-wealthy" in France get taxed 75%. This amount of taxation makes it basically impossible to ever advance in economic status or ever get ahead in life; seems as though you will be forever stuck with your head barely above water. It would be interesting to analyze France's idea of a super-wealthy citizen compared to a typical super-wealthy US citizen; who really has the more wealth. You could put a good bed on the US citizen because since we get to keep a larger percentage of our money, theoretically there is more money for purchasing and investing.
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