French President Francois Hollande has made good on his promise to force the “super rich” to pay their fair share by implementing a 75% tax on higher incomes in his 2013 budget.
The tax will apply to incomes of more than “one million euros,” and it will not be complemented by spending cuts or a reduction in the size of government. Holland is betting on the tax alone to diminish France’s expanding deficit by 1.5% next year.
French Prime Minister Jean-Marc Ayrault supports Hollande in this endeavor, and believes the new budget “is a budget to get the country back on the rails.”
As I wrote in August, many of the wealthiest French citizens started looking for homes and banks outside of France as soon as Hollande began to seriously push for this tax last summer. Now that he’s succeeded in getting it, he may find there simply aren’t enough wealthy citizens left who are willing to pay for France’s social programs and unchecked government growth.