Equity versus efficiency is at the heart of this story (see link) In France, the very wealthy will be charged an emergency tax to help stabilize the French economy. A couple of very wealthy people have spoken up in protest but public opinion is against them. What would happen in the United States, do you think? Why?
In my opinion, probably the same thing would happen in the United States if this tax would be applied. I agree that their is a widening economic gap between the rich and the poor and although it is not fair for several other reasons such as job, educational and social opportunities as Okun mentioned, it is also not fair to heavily over tax the people who have money. Just as the taxi driver stated, the rich should pay more tax, but not so much that they will be driven away. I don't know the history or background of the "rich" people, but it is money that they earned, whether it was gained or inherited, its theirs. This tax is causing them to leave the country, which in the end, will only be economically affecting France since company's are being transferred, taking money and jobs away from the rest of the country.
ReplyDeleteTaxes have always been a topic of discussion in the United States and I am sure that the rich people of this country would also be upset if they had to pay much more than they should. It would be the same situation as in Spain, where Cataluña wants to separate from the rest of the nation due to the method of distribution. They are the region that most money makes and more gives to be distributed among the rest of the regions as finance help.
I do think that as a whole country, people should come together to help each other, but it has to be done in a fair way.
This would never happen in the United States. As is mentioned in the Article, France's president is a socialist type and thus this action makes sense for him. This is a move that puts the government deeply involved in the economy and pulls away from a free market system. Obama caught a lot of slack during the first part of his term because many claimed Obama-Care was socialist in nature. Considering our country had a intense cold war with a rather socialist nation (USSR), it would be highly unlikely for any politician here to favor such an action. The only way I could see the same type of action happening here, is if the "Rich" were incentivized to buy Government bonds that would be locked in for the same time period that the tax is. This way you still secure the funds you need, but you don't anger all of your wealthy citizens.
ReplyDeleteI do not think that this would happen in the United States, because I do not think government would put such an outrageous tax on the rich. As Sarkozy mentioned, "The rich should pay more tax... but not so much to drive them away" I agree with his statement. 75% two year emergency tax on those who make more than 1.1 mil euros is a pretty substantial amount. France's president has socialist views, and as mentioned in the article, the french may be more ambigious to the tax than headlines are saying. I think the US would not place the tax in the first place, but if so , I do not think that they would be driven out of the country.
ReplyDeleteI think it's interesting that people have said this tax has been imposed to show that the president of France is standing by the people, since a majority of them are not in the wealthy elite. I think that if a tax as extreme as this were to be proposed in the U.S. that it would not go over well because the wealthy elite of this country do have an immense amount of political power. I'm assuming that in probably every country the wealthy have more political power, and just more power in general but I don't know how the U.S. compares to France. In the article it was also said that '"Morally it is legitimate," one said bitterly. "Economically and politically, it's stupid."' I think this would be reversed in the U.S. and people would said that this high of a tax is morally and ethically wrong, but economically legitimate.
ReplyDeleteI agree with Travis and Maureen that this will never happen in the United States. The last thing that the lawmakers want to do is drive away the wealthy, and a tax like this will do just that.
ReplyDeleteI agree with Travis and Maureen that this will never happen in the United States. The last thing that the lawmakers want to do is drive away the wealthy, and a tax like this will do just that.
ReplyDeleteI agree with Travis and Maureen that this will never happen in the United States. The last thing that the lawmakers want to do is drive away the wealthy, and a tax like this will do just that.
ReplyDeleteTaxing the rich at a higher level is an age old issue in the world of politics and has always been a hairy subject. I can't disagree with the previous comments that a policy like this would be unpopular in the United States. And I too believe that it all comes down to the power and influence that the rich have in the U.S. political arena. That whole quote about taxing the rich, but not enough to scare them away is so true. There is a fine line that gets toyed with here, and it comes down to taxing the rich in order to keep the middle and lower classes satisfied, but cutting them enough of a break to keep them from revolting. So in the United States I don't believe a policy of this caliber would ever be instituted simply because there would be too much backlash.
ReplyDeleteThis whole discussion of progressive taxes begs the question, "At what point do people either lose interest in creating and producing value, or take their business affairs elsewhere because of taxation." I would be interested in any empirical evidence suggesting any sort of emigration rate correlated with income tax rate to see if a higher tax rate actually does affect one's reason for staying/leaving. Although I don't believe to this extent that our wealthy would be this heavily taxed, I do think our government could raise the progressive tax higher before we see any substantial movements in our wealthy population.
ReplyDeleteI do not think this could ever happen in the United States. We believe far too much in trickle down economics as a nation for this to work. Mitt Romney is running on a platform of how a successful business, leads to more jobs for everyone else.I highly doubt we have the democratic capacity to enact anything like this within our own nation state.
ReplyDeleteThe idea behind the French tax is somewhat confusing, as to they have no scale on how many French elite would actually pay the tax if enacted. Going further than that, they have little measurement of its potential effectiveness either. I believe that this tax functions moreover as the article mentions, "it is a symbolic act to soften the blow for both cuts in services and spending and further increases in taxes for the wealthier middle classes." By focusing the public attention on this controversial device, it cushions further austerity measures in the public eye. If the rich are taxed at a highly inflated tax level, any tax increases for the lower classes will be looked at as lesser in perspective.
This tax also certainly functions to eradicate some of perceptions of the French government as elite sympathizers. Gone will be the days of a "Bling Bling" body, when the most wealthy are also the most 'giving' in a newer context.