Good article in the WaPo today by Molly Moore entitled, “Old Money, New Money Flee France and Its Wealth Tax.” It notes therein France’s continued prominence on Forbes’ annual Tax Misery Index and the resulting flight of entrepreneurs and capital. In France is an object lesson for us all. Their tax rates are so high that in some cases, notes Moore, a person’s tax bills can be higher than their incomes. This “wealth tax”, officially called the “solidarity tax”, says Moore, “is collected on top of income, capital gains, inheritance and social security taxes.” This is a tax that has brought in $2.6 billion annually but is estimated to have cost France over $125 billion in capital flight since 1998. This is like our own death tax that costs more to collect than it brings into the treasury. Lunacy.
Incidentally, the WaPo might take a page out of the WaPo’s book. They’re the ones who keep saying that tax cuts won’t help the deficit, but unfortunately for them, reality overtook their flawed theoretical argument. Tax cuts lead to growth. Higher taxes stifle growth.
So let us walk to the edge of the abyss that is France’s economic policy and hopefully learn an important lesson. We need to keep taxes low so that entrepreneurship and innovation — our lifeblood — can flourish.
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