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France: wealthiest ask government for special tax on the super-rich

"When the public finances deficit and the prospects of a worsening state debt threaten the future of France and Europe and when the government is asking everybody for solidarity, it seems necessary for us to contribute."

-Quote from an open letter calling for a "special contribution" by France’s super-wealthy

This is a temporary tax proposal to demonstrate solidarity in tough times. It reminds me of the solidarity tax Germans paid to deal with their reunification. Of course, France is a socialist country. So you expect this kind of thing, right?

That is not the attitude in the United States except for by the ‘socialist’ Warren Buffett. In the US, regardless of whether one believes taxes should be lower or higher, a common attitude amongst the wealthy is that calls for taxes for the wealthy is ‘class warfare’ – soak the rich. Instead, discretionary spending and entitlements should be cut and taxes should not be raised – even temporarily – except when those taxes are on working Americans. In fact, raising taxes on the rich is a good reason to threaten to default on US financial obligations – what I call the Ecuador risk factor, a hallmark of Banana Republics. But, of course, the US is a capitalist country. So you expect this kind of thing, right?

Source: France’s richest say: Tax us more – BBC News

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Edward Harrison is the founder of Credit Writedowns and a former career diplomat, investment banker and technology executive with over twenty years of business experience. He is also a regular economic and financial commentator on BBC World News, CNBC Television, Business News Network, CBC, Fox Television and RT Television. He speaks six languages and reads another five, skills he uses to provide a more global perspective. Edward holds an MBA in Finance from Columbia University and a BA in Economics from Dartmouth College. Edward also writes a premium financial newsletter. Sign up here for a free trial.

6 Comments

  1. dolphin says:

    Once you start adding taxes on rich, it will trickle down on the middle class. The argument would go as follows: Even the wealthy is contributing more now than before, so it is time for everyone to pitch in.
    You can always say I am already paying my fair share, but that will not fly with politicians or the ruling class.

    • Nonsense. This French proposal is temporary. And, for the record I am against tax increases. I would rather have the deficit. But if you want to close the deficit immediately you must increase taxes. There is no way around it.

      • dolphin says:

        Are we arguing for a one-time wealth tax? I think that is unconstitutional. Besides, I find it hard to believe that taxing super rich could bring deficit down to zero. At what rate could that happen? We can always run deficits so long as it is less than GDP growth to keep it sustainable.

  2. Grace Styles says:

    Hopefully in France this will actually happen. In is unlikely in the US as the idea was met with stiff opposition from Republicans!
    If only more of the ‘rich’ were like Buffett et al, http://tinyurl.com/3l3tm7e this article explains why when it comes to Buffett, ‘money is his servant, not his master.’

  3. Jonas the Bold says:

    This is a token effort. If the rich throw a few coins at the mob, maybe the mob will let the rich pass to safety through the backdoor of blame.

    Pathetic. Ask Comrade Buufet.

  4. Al Broadman says:

    This mindset certainly does show a different way of looking at things compared to the aggressive capitalistic ways of Americans.

    Considering that tax rates on the wealthy are the lowest they have been in decades, I do not find it offensive when talking about taxing the rich at a rate the most Americans who pay taxes are taxed. Note we are talking about tax rates here, not overall taxes paid.

    It is not class warfare to tax individuals and companies who make extraordinary amounts of profit the same or more than individuals who are members of the middle class. After all it these wealthy people who have benefited the most from the productive capacity of the middle class and the safe harbor our peaceful nation has provided them allowing them to grow so rapidly.