to not be surprised that France's intention to heavily tax the rich will result in less tax intake?

[Orwellian]

It obvious to everyone except Hollande that if you inflict a punitive tax on the rich (75%) then they will simply leave the country and take their wealth with them.

It has never worked to inflict punitive taxes on the rich as they will simply vote with their feet and now France is suffering due to this stupid policy.

I do agree that all sectors of society need to pay their way but in most countries income tax banding means that the rich will already being more since a salary of say, £90000 taxed at 40% will pay more tax than a salary of £50000 taxed at 40%. Unearned wealth is another matter but those paying tax (via payroll taxes on a salary) already pay more.

What's your alternative then to raise more money?

Government spend less money Sally.

Exactly what pessary says, there is a huge amount of waste in national government and local government expenditure.

In the UK alone the cost of these government 'think tanks' (that tell people what most of the populace already bloody know) and quangos, ridiculous frivolities such as potted plants and such like all need to be cut instead of slashing away at valued community services.

Sally - incentives for businesses to increase profits and wages so that the tax take goes up across the board without the percentages needing to increase.

And cutting government waste.

75% does seem extreme? I'd pack my bags for sure.

One one hand higher tax for higher earners on the other hand punish success.

You have a finite working life at what point do you say that's it, I'm earning enough now?

I think there's a mental tax barrier above which it hardly seems worth working or at least staying where you are, and I think that's between 40-50%. Anything over that (and even in very state heavy countries such as Sweden and Finland, I don't think they pay more than that). If you get to keep less than half what you earn, then that seems unfair.

The result of punitive taxation is entirely predictable - you ca only increase taxes so far before the tax take starts to fall.

Orwelliqn-no it isn't obvious or even proven that that is the case.Rich people of course like to put that 'tale' about

Hollande is an idiot. The French are idiots for voting him in.

I agree that he government is very wasteful and some of the PFI contracts etc have been poorly negotiated as well.

Laffer Curve

socharlotte

You have complained on other threads about the amount of tax you and your DH pay. Where is your pain threshold?

Well no one likes paying tax do they?

Socharlotte

It's not nice paying tax, but its necessary to fund the less well off in our country. I know plenty of people well into 6 (and some 7 figure) earners who don't shirk their tax obligations. What you have said is as generalistic as me saying everyone who claims benefits are lazy. Obviously not true!

It cuts both ways.

socharlotte - if you are complaining about how much tax you pay, surely that shows that the levels in the UK were reaching that point at 50% where people think 'hang on is it worth earning more'. When you consider that NI is also being paid as well now that the cap has been reduced.

When we compare UK tax rates to other countries - do other countries have an NI equivalent? Because if they don't then really we should be lumping the two in together to look at our rates, in which case anyone paying HRT or the 45p band is paying well over 50% of their earnings to the state. Which is a ludicrous situation.

The situation when on one hand Hollande sets 75% top rate pushing virtually everyone with v high income out of the country is stupid. One just needs to move into Belgium to qualify in dramatic drop in tax paid with virtually identical standard of living. I personally know a lot of people who have done exactly that. It is very easy to move from country to country inside the EU when tax rates are so different, especially when the standard of living, language and culture of the countries are close (France/Belgium, the Netherlands/Belgium). I have no doubt this policy will be reversed, but the damage is already done.

Then you have the UK where the tax rates are not low, but neither they are super high. However, currently non-doms pay no more than 35K (I recall) in tax on world-wide income. So many of the super rich from across the world settle here, but pay their national income tax (in Russia it is 13% flat). Incidentally, a lot of these super rich are not the "wealth creators" but corrupt civil servants from Russia, families of mafia rulers and war lords. They obtained their vast fortunes from stealing from their people of their countries, yet they are welcome here because the UK authorities can find no legal means of stopping them as this cannot be proved in the court of law.

Somehow everyone is so focused on bankers, but it is super rich non-doms and their families who I believe cause a lot more damage to this country.

What's your alternative then to raise more money?

Governments should aim to create the conditions under which industries which make something that people - locally and globally - need. Thus creating real wealth and jobs.

Manufacturing industries, high-tech (software, pharms etc etc), agriculture, infrastructure. Real stuff.

Sallyingforth - What's your alternative then to raise more money?

That's not the point. Even if there is no alternative if the rich can still move with their wealth then there is still no gain and probably an expensive policy to implement (probably costs more than the tax it actually brings in). It is simply an envy tax rather than a logical tax.

am loving the lack of concrete evidence on this thread
btw the 75% tax rate is a marginal not an average one

Would a society without the super rich not be more healthy? Even if everyone else carries on with the same level of income? It is a point I have heard discussed, perhaps France can provide a trial?

When Nigel Lawson was chancellor he abolished the top 60% income tax rate (nasty tories boo hiss) so it just became 40%, the proportion of tax paid by those who had been at 60% increased significantly.

I beg to differ. People will leave..... Why on earth would they stay?

My DH and I are both higher rate tax payers. If the tax goes up much more we will seriously think of leaving.

They're already leaving lostonthemoors, estimated figures for people looking to relocate are up 4-500% and there have been a number of high profile cases.

Rich people are unlikely to still live in their home town, near their family and friends - they can buy a nice house and send their children to nice schools anywhere.