A left-wing bloc made up of the Socialist, Communist, Green parties and the hard-left France Unbowed had proposed a minimum 2 per cent tax on wealth over €100 million (S$150 million), dubbed the “Zucman tax” after the French economist who devised it.
Mr Lecornu expressed his “profound disagreement” with the wealth-tax proposal, insisting there was no such thing as a “miracle tax”.
Government: We have a budget deficit and we’re going to raise the retirement age.
The left: Don’t raise the retirement age and tax the rich!
Government: No.
Also government: Why is the far right on the rise?
The far right voted against the tax, they are pretending to care about workers but every time they vote in favor of the richest.
Evoking xenophobia elicits a stronger emotional response than pin pointing the root cause of the problem, which is oligarchy. People are distracted by culture wars.
The left: Wait, why aren’t we on the rise?!
Some on the left became turncoats (I’m talking to you British Labour).
Corporate cronyism has destroyed leftists credibility
Jup, as an outsider british politics continues to baffle me.
I would welcome a complete tax overhaul in France and likely the rest of the EU and other countries, but the so-called wealth tax is insufficient. It sounds great that a tax on the mega-wealthy could raise around 20 billion euros a year from just 1,800 households, until you hear that France’s public debt amounts to 3.4 trillion euros.
What is needed is a different tax structure, many say with a lower income tax and higher consumption tax, e.g., a higher VAT on luxury goods is proposed by many. In France, for example, there was a discussion on a 33% VAT on boats beyond a certain horsepower some time ago, but it got stuck.
Such higher consumption taxes for certain luxury products would likely raise much more than the 20bn Zucman tax in France, and it woudn’t hurt the vast majority of people. But it’s easier to sell a “wealth tax” to the public and use this for political campaigning I guess.
Higher VAT hurts regular people more than the wealthy.
Higher income tax brackets is what brings more equality.
The tax over 1 million should be enormous.
And EU needs a common tax scheme to properly implement and enforce such efforts.Income & profit taxes could more than cover any gov spending without touching the vast majority of the population.
Also why would you compare a tax increase to the total debt?
Higher VAT hurts regular people more than the wealthy.
How does a luxury VAT on yachts and private jets and things like that hurt regular people more than the wealthy?
Across OECD countries, VAT & goods and service tax combined contribute around a third to the tax revenues (on average), that’s only slightly less than income from personal and corporate tax and capital gains tax. The rest (around 25%) comes mainly from social security contributions.
Compared to consumption taxes, income taxes impose steeper administrative and compliance costs. It would be much easier to apply in our modern world - contrary to more than 100 years ago, when nation states shifted from a primarily consumption tax-based system to an income tax-system, and when only an incredibly small number of citizens were subject to these income taxes.
Switching to a primarily consumption-based taxation would be a better choice for a variety of other reasons, too. I don’t say we should abandon income tax completely, but the shift would be a good thing imo.
[Edit typo.]
Oh, I didn’t really clarify that point, sorry - I just don’t think VAT on specifically luxury goods would yield much, it would just fail as a concept. Eg yachts you mentioned are often bought via non-EU counties & registered there. Also much easier to move production. But if you follow the money/wealth, you can get to it’s origins.
The mere definition of luxury goods is a tricky one too. Probably impossibility so to make a useful, meaningful system.
Where we now usually have two VAT tax brackets (eg food & non-food), that alone is still a huge & complex system to define.
And administrative costs of proper income taxes are for one already in place in most countries, and secondly if additional employees are needed, that is a net plus.
It does bother me that a lot of countries get more from VAT than from income taxes - but especially I’m talking corporate taxes. They are generally too low & flat.
Maybe look at it from this pov - someone living from paycheck to paycheck spends/pays max they can on VAT (or sales tax), whereas someone who doubles their already vast wealth can’t really double the spending that they would pay VAT on. So it’s disproportionate in general.
But then again - why not both? A tax on wealth, and a VAT on luxury goods?
I think the problem is that it’s a flat 2% in the proposal. Instead it should be progressive, based on the assessed wealth of the individual and their family. And make it go as high as 99% on obscene amounts. No one needs to hoard 400 billion eur.
I’m know wealth is not as dry cut, but I’m sure economists could figure out something better if they cared to.
That proposal is already pretty watered down, especially in the latest proposition. I don’t care that your net worth is made of company stock and not in cash. We, commoners, pay way more than 2% of our net worth in tax, why such a low tax rate is not acceptable for the super rich?
It should, but the point I think you’re missing is that, even in this VERY light version purposefully calculated so that those ultra rich households still increase in wealth with the tax, just a little slower, it was heavily criticized in virtually every media, and still was not voted by the lawmakers. Something more drastic than this as you and a lot suggest would not even have a chance at being discussed on…
Yeah, the proposal was
a jokean effort to start the movement. And it still failed.
(Imagine if you get a billon a year & they proposed a 2% tax - not much difference for you but if you invest only 1% of one year into lobbyists, that’s a budget of 10m that is spent on for full-time employees working on how to not make the tax increase happen. And ofc bribes & extortions.)With such speed of wealth concentration to remain a society without kings an actual wealth tax is needed, directly in company profits, and on personal income. Which includes closing tax loopholes & monitoring intra-group wealth transfers.
Besides, the alternative is to legally nationalize all the wealth of a few select individuals, like a purge common to after-revolution times (and literally end the debt crisis). That or be enslaved.
^ If that kind off public discussion would be going on billionaires would be lobbying for a gigantic tax increase on their wraith.
Consumption taxes always hit poorer people proportionally more than rich people. Because even non super rich people buy, let’s say jewellery, from time to time.
I agree that the tax code needs a rework, and a tax for the super rich will not resolve everything, but it’s a good start, and better than doing nothing yet again.
Yachts, private jets, luxury cars - there are a lot of products for which such a ‘luxury VAT’ could be an idea imo. Some European countries had that after WWII, but then abandoned it in the 1980s or so. I don’t have list of products for which it could apply, and no list is perfect, but it would be part of the solution imho.
Ok, if you limit it to yachts and private jets, I ould see it only hit the super rich, but then again, why not both? Why limit ourselves to one way of getting the wealthy contribute their share to society?
What is ‘fair’?
If the ‘wealthy’ consume more - and more luxury goods - they would automatically pay more taxes, and the administrative costs of consumption taxation are much lower than they are in an income tax regime.
A consumption tax would also reduce the headache of low economic growth, which limits the income tax of the state in the long term.
A consumption tax is also ‘fairer’ in that under an income tax regime, savers pay more tax than consumers. Suppose we have a consumer and a saver with the same annual earnings. In an income tax regime, the consumer (who spends the money right away) pays tax only once when income is earned. The saver, however, pays not only once when the income is earned but also later on the income on the saved earnings (interest rates, dividends). So those who save (and invest) pay more taxes than those who spend their money right away.
Taxation on income (and capital gains) are often justified with the fact that the wealthy save more than the poor, so it is only fair that they pay more taxes, many say. In addition, it is often said that more wealth goes hand in hand with more economic power and political influence. Although these arguments have some validity, they do not address the core task of taxation. And, more importantly, they ignore the fact that social and political equality must be addressed primarily by other means such as transparency in political decision making, open public discourse, direct democracy, and other instruments.
Instead of taxing income and capital gains we could, for example, apply the consumption principle to the taxation not of wealth but wealth transfer since giving assets to heirs is, in fact, some form of consumption. This would ease the various troubles associated with all forms of income taxes, and would help to create a ‘fairer’ society.
To define what is fair, we have to define what fair is. Is fair equality, or equity?
In my opinion it’s equity. So while you might say “if everybody pays 2%, that’s fair!” I’d argue that if you have 100.000€ you should pay a far smaller percentage in taxes, than somebody having 100.000.000€. Because we consider that the basic needs for everybody will be around the same amount, that means that if the poor pay the same percentage of taxes as the rich, they will have enough to cover the basic needs (in the best case), but their ability to afford luxury will be reduced.
At the same time, if you tax the poor 1% while taxing the rich 60%, the poor will have a far better life, while the rich will probably not even feel the difference, beside some numbers going down in a banking app.
“Wealthy politicians vote to not tax themselves with a nod to their rich friends in the private sector.”
Not even rich politicians, the proposed threshold in first proposal was 200 millions of net worth, where you would pay less than 2% of your net worth in tax thanks to multiple loopholes.
Definitely richer than average politicians
Wait what ? More taxes is always the solution 😑
In this case it is because the ultra wealthy doesn’t pay their share.
In the “If you want things you have to pay for them” sense, yes.
