Speaking of France, how is the Socialist-led European state faring these days?
Not so great, it seems.
In fact, a pretty reliable source claims they’re bankrupt.
Graham Ruddick reported on The Telegraph (UK) website Monday:
Michel Sapin made the gaffe in a radio interview, which left French President Francois Hollande battling to undo the potential reputational damage.
“There is a state but it is a totally bankrupt state,” Mr Sapin said. “That is why we had to put a deficit reduction plan in place, and nothing should make us turn away from that objective.”
The comments came as President Hollande attempts to improve the image of the French economy after pledging to reduce the country’s deficit by cutting spending by €60bn (£51.5bn) over the next five years and increasing taxes by €20bn.
(Editor’s note: Italics added for emphasis)
As I mentioned earlier tonight, some claim President Obama desires French-style Socialism for the United States.
If France’s economy truly is in shambles, and the U.S. President really wants to emulate them, well- here’s a glimpse of what Americans could expect. From an Investor’s Business Daily editorial yesterday:
Fresh after May 2012′s election, President Francois Hollande wasted no time raising government spending, hiking tax rates to 75% on those above $1.3 million in income, hiring 60,000 bureaucrats, cutting the retirement age for public pensions to 60 and undoing fiscal reforms by his predecessor, Nicolas Sarkozy. During his campaign, Hollande declared himself “the enemy of finance.” France today proves it…
Public debt has soared from 68% of GDP in 2008 to 90% in 2012, joblessness has hit 11%, and GDP growth of its $2.8 trillion economy is projected in 2013 at zero.
Tax hikes have driven the richest taxpayers from the country, making the $43 billion budget hole unlikely to be plugged by Hollande’s $26 billion tax hike. Meanwhile, a squeeze on business creates rising numbers of unemployed, who in turn demand state services.
Time will tell how this will all work out for the Socialists in France. But if history rhymes once again, keep in mind something former British Prime Minister Margaret Thatcher said in a 1976 interview:
Socialist governments traditionally do make a financial mess. They always run out of other people’s money. It’s quite a characteristic of them. They then start to nationalise everything, and people just do not like more and more nationalisation, and they’re now trying to control everything by other means. They’re progressively reducing the choice available to ordinary people.
Any of this sound familiar?
By Christopher E. Hill, Editor
Survival And Prosperity (www.survivalandprosperity.com)
Ruddick, Graham. “France ‘totally bankrupt’, says labour minister Michel Sapin.” The Telegraph. 28 Jan. 2013. (http://www.telegraph.co.uk/finance/financialcrisis/9832845/France-totally-bankrupt-says-labour-minister-Michel-Sapin.html). 30 Jan. 2013.
“Like The Bourbons, France’s Socialists Have Learned Nothing, Forgotten Nothing.” Investor’s Business Daily. 29 Jan. 2013. (http://news.investors.com/ibd-editorials/012913-642388-france-socialist-model-is-same-old-recipe-for-bankruptcy.htm). 30 Jan. 2013.
Is there anyone else out there besides me who thinks the United States should be rolling out the red carpet to wealthy residents of other countries whose compatriots are itching to tax the crap out of them?
Why raise taxes on rich Americans when you can grow the pool of millionaires and billionaires exponentially?
Just one brief look around the world today shows how ripe they are for the picking. From Robert Frank on the CNBC website last Friday:
As part of his budget announced today, French President Francois Hollande made good on a campaign promise to tax France’s top earners at 75 percent. It would apply to taxpayers with earnings of 1 million euros a year…
[Paris-based tax lawyer Vincent] Grandil said many of the French wealthy are making plans to leave the country. He said the tax was less of a concern than the long-term budget situation in France and the declining global competitiveness of the nation’s businesses.
He said many younger successful French are moving to the San Francisco area to be part of the tech boom. “It’s not just a tax question for them, they really seem to like it there.”
One might think the French Socialists might stop there. Oh no. Hugh Carnegy wrote in a Financial Times (UK) piece that appeared on the CNBC website earlier today:
Francois Hollande’s Socialist government is facing a new tax revolt — this time not from big business protesting against the president’s 75 percent income tax band but in the form of a viral online campaign by small French entrepreneurs furious about a jump in capital gains taxes.
Calling themselves “the Pigeons” — French slang loosely translated as “the fall guys”- a group of Internet entrepreneurs took to social networking sites to voice their opposition to the measure within hours of its announcement in last Friday’s 2013 budget.
The cause of their ire is the government’s plan to tax capital gains at the same rates as earned income. Jean-David Chamboredon, chief executive of ISAI, a venture capital fund, and leader of an investors’ lobby group called France Digitale, said the result in some cases would be a jump in the effective marginal tax rate to as high as 60 percent from 32 percent for investors and entrepreneurs selling out of a business.
Yoo hoo. Wealthy Frenchmen and Frenchwomen. A pair of new Birkenstocks and a case of Napa Valley wine awaits you on the other side of the pond.
And then there’s this by the Associated Press last Saturday (also on CNBC.com):
Thousands of people across Germany have protested for the introduction of taxes on wealth and financial transactions.
Organizers said Saturday around 40,000 people took to the streets in 40 cities to demand a more equal society.
France. Germany. Give us your tired, wealthy, fashionably-dressed masses yearning for lower taxes and hard-working Americans to staff their new businesses here in the U.S.
“France Gall – Ein bißchen Goethe, ein bißchen Bonaparte (Live 1969 HQ)”
Frank, Robert. “French Tax May Hit Only 5,000 Earners and Raise Little.” CNBC. 28 Sep. 2012. (http://www.cnbc.com/id/49213586). 3 Oct. 2012.
Carnegy, Hugh. “French ‘Pigeons’ in Flutter Over Tax Rise.” CNBC. 3 Oct. 2012. (http://www.cnbc.com/id/49267828). 3 Oct. 2012.
“Thousands in Germany Protest for Wealth Tax.” CNBC. 29 Sep. 2012. (http://www.cnbc.com/id/49223665). 3 Oct. 2012.
Christopher E. Hill, Editor
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