French President François Hollande should get the Noble Prize for providing the script for How to Destroy and Economy for Dummies. He went on TV on Thursday now saying he would make companies pay a 75% tax rate on salaries over one million euros. He is repackaging his Marxist campaign promise that he would impose a 75% tax on individual taxpayers, which was struck down by the Constitutional Court of France in December.
Hollande, is struggling to defend his race to fall to zero popularity as fast as possible. His first 10-months in office has resulted in a collapse of support as the old Marxists are dying and the youth can’t see where these policies work. Hollande is determined to tax the rich while refusing to reform. Exactly how the new rate would be calculated, or how it would affect certain salaries he never explains.
Nevertheless, in his primetime television interview, Hollande sought to persuade the French public that he had in fact made sound fiscal choices for the economy despite the economic implosion France is experiencing now with massive capital flight and migration of the very people who create employment. France is saddled with virtually historic highs in unemployment and no hope of reform with only the prospect of negative GDP growth in 2013. He acknowledged that his government’s tax rises had hurt everyone. Still, he cannot see that lowering taxes to stimulate the private sector to CREATE jobs so government reform reducing their jobs can take place. He promised not to raise taxes again until 2014!
Then he addressed the highly controversial retirement issue, arguing that any further increase in the retirement age would be necessary to safeguard France’s pension system. This was one of Sarkozy`s efforts to raise the retirement age from 60 to 62 years, which became one of the most unpopular policies of his presidency opening the door for Hollande.