If You Tax Them, They Will Leave

A recent article in the NY Times http://www.nytimes.com/2012/08/08/business/global/frances-les-riches-vow-to-leave-if-75-tax-rate-is-passed.html?pagewanted=1&_r=1&adxnnlx=1344520811-qy1jUzqsl8PH%20TEfvS7v9Q discusses some very real consequences counties may face if they attempt to fix their budget shortfalls by punitive taxation of the rich.  The article specifically discusses tax attorneys in France who are busy counseling their high earning clientele seeking advice about leaving their home country should new French president Francois Hollande make good on his promise to raise the top income tax rate to 75%.

Some noteworthy stuff in the article regarding Hollande's proposed tax hikes:

An impediment to job creation—As business owners and companies contemplate the new tax, they are delaying plans to invest in France or to hire new workers.  

Very little help filling the budget shortfall—France doesn’t have a lot of high income people, so very few taxpayers would be subject to the tax.  Net-net, the new tax would make a very small contribution to the €33 billion in new revenue the government hopes to raise.  

Attitude towards financial success—President Hollande has publicly said, “I don’t like the rich.”

Drive investment and jobs away, make very little real progress on filling the budget hole, and generally have a hostile attitude towards successful businesspeople.  Sounds like political theatre when France needs some real answers for an economy that desperately needs a boost. 

Have fun with all that.