Despite all the ballyhoo around President Hollande’s determination to squeeze the rich with a 75% tax, he has finally admitted that it wasn’t working, and that it will be dropped for the coming year.
This news comes too late to put in our new book, Flight of the Golden Geese out in February, where we warned that the policy was economic lunacy/suicide. And so it has proved.
According to the French finance ministry, a mere €260m was earned in 2013 from the supertax, and this even dropped to €160m in 2014. Hardly surprising that France’s budget deficit soared to €84.7bn.
What these figures don’t show is that second-order tax income will also have dropped substantially because of this tax, probably by an amount even greater than the sums raised. French business has been badly hit by the consequential fallout of the policy, which impacted employment, which hit the income tax take from ordinary Frenchmen and women.
This about face is just the latest of a number of U-turns by Hollande’s government, all going to show that in today’s economic climate politicians are no longer in control of national destinies.