Earlier this year, those on the political left were all agog over French economist Thomas Piketty's latest book "Capital in the Twenty-First Century". In the book, this socialist economist -- that which, in itself, is an oxymoron -- argued that wealth should be stamped out with excessively high taxation. Taxes as high as 80% on the richest. This was a belief that had been expressed for years, and a devotee who shares it is the Socialist Party's current President of France, Francois Hollande.
In 2012, Hollande campaigned on the fact that he wanted to institute a 75% tax on those making a million Eurodollars or more as a means of reversing France's growing debt. In December of 2013, Hollande successfully achieved passage of that tax through the French legislature. It became retroactively applicable to all of 2013, but it was conditionally term-limited to just two years. Thus, as of December 31, 2014, the tax died on its own without renewal. In essence, it was a failure.
Before the tax was implemented, opponents said it would cause a mass exodus of the wealthy. They also said it would cause the economy to falter. While there really wasn't a "mass exodus" out of the country, wealthy investors and investments avoided coming to France to establish new businesses. France also earned an anti-business title. Also, the promised debt reversing tax revenues never significantly materialized. And, the economy? After seeing a spike in the country's GDP in early 2013, it continued to struggle throughout the rest of that year and, again, in 2014:
All in all, France's two-year experiment was nothing but a failure and Thomas Piketty's high taxes on the rich was exposed as simply a hate-the-wealthy economic fraud. And, Hollande? His approval rating has tanked to just 12%.
The bottom line is that a country that punishes its rich with high taxation only limits economic growth and raises unemployment. This was a lesson well learned in the U.S. when, in 1990 under a Democrat Congress, a luxury tax on expensive boats, planes, cars, jewels and furs was enacted to, basically, backdoor-punish the wealthy. This, under the guise that revenues would increase and the debt would be reduced. We then slipped into a mini-recession, and over the two next years, the rich flourished while many of the people that made, or sold, or maintained those luxury items lost their jobs.
Capital in the Twenty-First Century: http://en.wikipedia.org/wiki/Capital_in_the_Twenty-First_Century
Francois Hollande: http://en.wikipedia.org/wiki/Fran%C3%A7ois_Hollande
Hollande's 75% Super-Tax Ends As A Failure: http://www.businessinsider.com/r-france-waves-discreet-goodbye-to-75-percent-super-tax-2014-12
France GDP Growth Rate: http://www.tradingeconomics.com/france/gdp-growth
Hollande popularity plumbs new low in mid-term French poll: http://www.reuters.com/article/2014/11/06/us-france-hollande-idUSKBN0IQ14R20141106
List of socialist states - Wikipedia, the free encyclopedia: http://en.wikipedia.org/wiki/List_of_socialist_states
Luxury Tax Repeal A Long Time Coming: http://articles.sun-sentinel.com/1992-07-07/business/9202180334_1_luxury-tax-tax-repeal-tax-didn-t