Putting Tax Rates and “Socialism” in Perspective

Via the BBC:  French 75% income tax struck down by constitutional council

France’s constitutional council has struck down a top income tax rate of 75% introduced by Socialist President Francois Hollande.

Raising taxes for those earning more than 1m euros (£817,400) has been a flagship policy for Mr Hollande.

The policy angered France’s business community and prompted some wealthy citizens to say they would emigrate.

Mr Hollande’s government said it would rework the tax, due to take effect in 2013, to meet the council’s complaints.

In its ruling on Saturday, the Constitutional Council said the new tax rate "failed to recognise equality before public burdens" because, unlike other forms of income tax, it was to be applied to individuals rather than households.

For example, that meant a household in which one person earned more than 1m euros would pay the tax, but a household in which two people earned 900,000 euros each would not have to pay.

This is interesting for a variety of reasons (not the least of which being the interplay between various branches of government, which is the kind of thing that I find interesting).

However, one cannot see such a headline/story and not immediately note the rather stark contrast between US and French politics, insofar at the upper limit on top earners supported by a president frequently called a “socialist” in the US is under 40%.

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Steven L. Taylor
About Steven L. Taylor
Steven L. Taylor is a Professor of Political Science and a College of Arts and Sciences Dean. His main areas of expertise include parties, elections, and the institutional design of democracies. His most recent book is the co-authored A Different Democracy: American Government in a 31-Country Perspective. He earned his Ph.D. from the University of Texas and his BA from the University of California, Irvine. He has been blogging since 2003 (originally at the now defunct Poliblog). Follow Steven on Twitter

Comments

  1. Ben Wolf says:

    I project a series of partisan responses to this post, none of which will even remotely address its purpose and will fail to move our understanding of what our tax policies should be forward by a single millimeter.

  2. bk says:

    @Ben Wolf: If France were a stock, I would short it. It is obviously dominated by the liberal internet academic elite.

    How did I do?

  3. Ben Wolf says:

    @bk: Perfectly.

  4. Sejanus says:

    @Ben Wolf: It didn’t had enough use of the word “loopy” for me. One or two uses of “chattering classes” would have also been nice.

  5. Dave Schuler says:

    I don’t have enough energy to go looking for it but some years ago I wrote a post titled something like “We Are All Socialists Now”. If you define your terms strictly, anything other than a head tax is socialist.

    You can’t maintain a modern society on the basis of a head tax. You can’t maintain a modern military on the basis of a head tax.

    I might add that in the United States something between 60% and 70% of all healthcare funding comes from the government. In France it’s something like 90%. And yet to hear the healthcare debate here in the United States we have free market healthcare and in France it’s socialism. 20-30% is the difference between a market system and socialism? That’s goofy.

  6. al-Ameda says:

    @Dave Schuler:
    It is my understanding that the difference between capitalism and socialim is 4% – that is, moving that tax rate on incomes over $250K from 35% to 39%.

    Glad I could help