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| Storming the Bastille |
As I noted, the "worst case" scenario seems at this writing to include capital gains tax rates going from 15% currently to as high as 30% under the most recent Obama proposal. Taxes on dividends, meanwhile could potentially reach as high as 43.4% for taxpayers in the highest income tax bracket, compared to 15% currently.
Most analysts do not expect these types of increases to become effective, by the way. The consensus view is that no matter who is our next President a bipartisan agreement with Congress will probably result in some kind of increase in rates from current levels, but still well below historic averages.
Meanwhile, across the Atlantic, French President Francois Hollande is proposing tax increases on investment income that make the American debate seem almost frivolous.
If President Hollande has his way, the top rate on capital gains in France will nearly double, from 34.5% to 62.2%.
Understandably, as Ambrose Evans-Pritchard of the London Telegraph reports, business leaders are furious, and are warning of severe economic consequences if the proposed tax rates become law:
The immediate bone of contention is Article 6 of the new {French} tax law, which raises the top rate of capital gains tax from 34.5pc to 62.2pc. This compares with 21pc in Spain, 26.4pc in Germany and 28pc in Britain...
Mr Hollande is tightening fiscal policy by 2pc of GDP next year to meet EU deficit targets, with two-thirds coming from higher taxes. The budget does little to shrink the French state. Spending has risen to 55pc of GDP, similar to Sweden but without Nordic labour flexibility.
http://www.telegraph.co.uk/finance/financialcrisis/9610717/French-business-erupts-in-fury-against-disastrous-Francois-Hollande.html
This will be an interesting debate to watch. Several French business leaders are opening discussing changing their citizenship to other, more tax friendly countries. Meanwhile, public sentiment remains largely resentful against the rich and the powerful, who may perceive are not paying their fair share of the country's fiscal burden.
French billionaire Bernard Arnault, for example, is apparently now applying for Belgium citizenship to avoid his country's huge tax increases, which include a 75% tax rate on income above $1 million:
French first fortune, Bernard Arnault would become the man richest man in Belgium . According to Freedom of Belgium , the multibillionaire asked late August to be naturalized. His case is now on the table of the Committee on Naturalization s must ' ensure that the candidate has many "real ties" in Belgium.
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