France’s socialists recently gained a sizable majority of their parliament, as well as electing the ultimate champagne socialist to the presidency. I’m enjoying following the French beat, not because I take any perverse pleasure in watching countries suffer and stagnate beneath the myriad opportunity costs and petulant ineptitudes of socialism — but rather because the way this is all going to play out is just so utterly, laughably, painfully predictable. It’s not going to work out according to your sanguine, reality-negligent plans, I can promise you that much, France:
France’s new Socialist government announced tax rises worth 7.2 billion euros on Wednesday, including heavy one-off levies on wealthy households and big corporations, to plug a revenue shortfall this year caused by flagging economic growth. …
An extraordinary levy of 2.3 billion euros ($2.90 billion) on wealthy households and 1.1 billion euros in one-off taxes on large banks and energy firms were central parts of an amended 2012 budget presented to parliament. …
The budget followed a grim assessment of public finances on Monday by the state auditor, which warned that 6-10 billion euros of deficit cuts were needed in 2012 and a hefty 33 billion in 2013 for France to avoid a surge in public debt dragging it into the centre of the euro crisis.
One of the highest state spending levels in the world has raised France’s debt by 800 billion euros in the last 10 years to 1.8 trillion – equivalent to 90 percent of GDP, the level at which economists say debt starts to hinder economic growth.
It infuriates me that Europeans are busily denouncing the “failed” “conservative” policies of recent leadership, and the mere word “austerity” is treated like the plague — you haven’t had conservative leaders, and you certainly haven’t hadausterity. You’ve had slightly-less-progressive governments making very tiny budget cuts and shuffling money around. Quit pretending like you’ve actually made any real efforts at encouraging economic growth rather than appeasing your populace with the promise of more free stuff. Punishing the wealthy isn’t a real long-term solution, it’s a populist ploy that’s going to amount to a drop in the bucket.
Honestly, France — start taxing the heck out of your country’s financial movers and shakers, and what do you think is going to happen?
The UK has rolled out the red carpet to any and all French businesses that wish to relocate there.
Several thousand Brits own 2nd homes in France but are planning to sell or abandon them rather than pay this penalty/tax.
We have quite a few examples here in the States where a leftist State raised taxes on this-or-that only to find one or two things happen; rich people move away and regular folks go out-of-state to shop where taxes are lower.
France will see these things, too.
Funny photo of the new French leader:
http://i.telegraph.co.uk/multimedia/archive/02228/hollande_2228806c.jpg
“Those who do not learn from history are doomed to repeat it.” – George Santayana
The French are masters at being oblivious to history and historical precedent.