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By Theodore Dalrymple

The New Vichy Syndrome: Why European Intellectuals Surrender to Barbarism.

Eye on the News

Theodore Dalrymple
French Tax Hell
The country’s taxes are stifling enough without President Hollande’s confiscatory proposals.
15 January 2013

During his election campaign, French president François Hollande openly described his dislike of the rich and promised to impose a temporary tax of 75 percent on those with annual incomes above $1.3 million. He hoped that voters would take these positions as a sign of the warmth of his heart. Hatred of the rich, however, is not quite the same as love of the poor; besides, such emotions are not necessarily the soundest basis for economic policy. In any event, the French Constitutional Council recently struck down Hollande’s proposal, though more on a technicality than as a matter of principle.

The press has focused most of its attention on Hollande’s desire to raise the income tax—as justified by the Orwellian term “contribution exceptionelle de solidarité,” as if the feeling of solidarity were something that tax inspectors could wring from the human heart. But France already endures a much more harmful tax: the ISF, or L’Impôt sur la fortune, a tax on capital assets irrespective of whether they bring the owner any income. It is this tax that induced the French actor, Gérard Depardieu, to announce initially that he was moving to Belgium (before becoming a Russian citizen). In fact, income taxes have always been higher in Belgium than in France; but Belgium has no ISF.

Hollande’s predecessor, Nicolas Sarkozy, imposed a “bouclier fiscal,” a fiscal shield, according to which no one would have to pay more than 50 percent of his income in taxes, however great his assets. But now the shield is no more, and so it will be theoretically possible, even likely, for many people to pay more in taxes than they receive in income. The ISF tax thus amounts to outright confiscation; whether the Constitutional Council will allow it to stand remains to be seen, but the government has sent a clear message that it regards possession of capital as inherently selfish, antisocial, and in need of moral rectification. This does not mean, of course, that individual members of the government have any interest in lowering themselves to the average or even median standard of living.

For the moment, though, the ISF remains overshadowed by Hollande’s now-defeated proposal. The Journal du Dimanche reports that the decision of the constitutional court provoked many reactions, including from “the president of the Football League, Frédéric Thiriez, who called it ‘a beautiful and necessary victory.’’’ It was necessary because, without it, players in the French league would have taken their services elsewhere in Europe; and the French public would thereby have been deprived of one of the most important circuses of the modern bread-and-circuses polity. It is only circuses, after all, that stand between us and real social unrest.

There is ever more pressure in Europe for fiscal uniformity. France’s government opposes any form of fiscal competition between countries. The French for “tax haven” is paradis fiscal, a tax paradise. Hollande would much prefer an enfer fiscal, a tax hell, because it would be so much more moral and socially just.

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