Tuesday, December 23, 2014

Arthur Laffer Call Your Office

It should come as no surprise to anyone familiar with the Laffer Curve that France's 75% top tax rate raised barely enough money for an Alex Rodriguez contract.


Hollande first floated the 75-percent super-tax on earnings over 1 million euros ($1.2 million) a year in his 2012 campaign to oust his conservative rival Nicolas Sarkozy. It fired up left-wing voters and helped him unseat the incumbent.
Yet ever since, it has been a thorn in his side, helping little in France's effort to bring its public deficit within European Union limits and mixing the message just as Hollande sought to promote a more pro-business image. The adviser who made the "Cuba" gag was Emmanuel Macron, the ex-banker who is now his economy minister.
The Finance Ministry estimates the proceeds from the tax amounted to 260 million euros in its first year and 160 million in the second. That's broadly in line with expectations, but tiny compared with a budget deficit which had reached 84.7 billion euros by the end of October.

 Sure, class warfare can fire up the voters, but it won't balance the budget.

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