A bold economic experiment in France

Alexander Reed Kelly in TruthDig:

A bold experiment is under way in the world’s fifth-largest economy: As part of a recovery plan aimed at plugging a $48 billion hole in the French budget, leftist President Francois Hollandeannounced last week a 75 percent tax on the personal incomes of anyone earning more than $1.3 million a year, effective for two years beginning in 2013.

The decision has some of the country’s top earners, led in the media by cosmetics tycoon Jean-Paul Agon, suggesting that the new rules will make France inhospitable to commerce, and implying that the impending blow to their bank accounts may compel executives to take their moneymaking activities elsewhere.

“If there is such a new tax rule,” the L’Oreal CEO said in an interview before the figure was confirmed Friday, “it’s going to be very, very difficult to attract talent to work in France, almost impossible.”

Agon’s warning reflects an attitude among the rich that is older than capitalism itself. If you tax us too much, the thinking goes, then the cost of providing the goods and services society requires will become too high. We won’t be able to pay the wages our workers deserve, and our talents for enterprise will find more favorable conditions elsewhere.

More here.