Sunday, 30 December 2012

The French Tax Business

This past summer....as the French had their election, and the new Socialist government came into office......there was the threat of going after rich people in France....to pay for the revenue required by the government.  The eventual tax determined?  A seventy-five percent tax on anyone making one million Euro or more ($1.25 million dollars).

Naturally, a number of rich French folks have packed up and started moving out of the country.

This week....a commission that oversees the tax business came out and put a temporary halt to the mess. The reason?  Well....it's kinda interesting.

You see.....the French run their taxes like the Americans.....so a couple submits their tax form and pay as a couple.  So, if you had a husband and wife each make 999k Euro.....they wouldn't trigger the one million Euro tax episode.  The tax commission quickly came to look at this as being odd.  If the wife didn't work, and the husband pulled in exactly one million Euro.....then the tax would be triggered.  So it was unfair.

What few in the media will admit at this point.....is that most tax experts talked about this during the formal building of the legislation and said it wouldn't pass the logic tax.  They were correct.

What happens now?  Well.....the legislative folks go back in and spend a month trying to create the law all over again.....in a fair way.

My humble guess is that six months from now.....someone from the tax office will comment that expected taxes aren't being reached, and no one can understand why the wealthy aren't paying?  Then they start looking for the folks and realize that they just packed up and left the country.  After a year of this.....and failure to reach the expected tax goals.....the middle class guys have to start worrying now.  They will eventually fall into the tax pit to make up for the rich guys leaving.

It's a tough life.....being French and all.