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My way # 20 MAYBE WE COULD LOOK AT THE FRENCH TAX REFORM MODEL?

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Sorry, we could not work on our blog last week due to technical problems…but here’s this week’s…enjoy and comment:

MAYBE WE COULD LOOK AT THE FRENCH TAX REFORM MODEL?

I was reading about the tax changes proposed by French president François Hollande and, even though nobody likes tax hikes, his government has made some points that, in my opinion, could be considered:

WEALTH TAX: this is a tax that will have its highest effect on those that make whose net taxable assets are over 1, 623,000 dollars. The following table explains it better:

Net taxable asset value rate                      %
Less than 992,000 dollars 0.00
Between 992,000 and 1,623,000 dollars 0.55
Between 1,623,000 and 3,184,000 0.75
Between 3,184,000 and 5,006,000 dollars 1.00
Between 5,006,000 and 9,552,000 dollars 1.30
Between 9,552,000 and 20,800,000 dollars 1.65
Above 20,800,000 dollars 1.80

So, if you make less than a million dollars, your taxes will stay the same. Other subtle changes have also taken place: Mr. Hollande has actually taken the train ride around France; he also used the train to go to Brussels, without the need of flying or having a state jet following him, and his ministers have been ordered to hit the rails when possible (with a free pass on the national railway system).

Ministers and other government officials have been encouraged (ordered) that if they need to fly, to use in coach class on commercial airlines. Why does a congressperson need a private airplane?  Official cars have been diminished in size and in luxury. Mr. Hollande has given up the presidential Citroën C6 for a smaller but hardly shabby Citroën DS5 diesel hybrid. He has reduced the ranks of his official drivers to two from three, and they are now supposed to stop at red lights. French Prime Minister Ayrault gave up his C6 for a cheaper Peugeot 508. Cabinet ministers have also traded down, and the housing minister, Cécile Duflot, an ecologist who was criticized for wearing jeans to an Élysée Palace meeting, has ordered four official bicycles.

Champagne at receptions has largely been replaced by Muscadet, a considerably cheaper white wine, and prices at the official cafeterias for ministerial employees, always a bargain, have been raised modestly.

Even security has been put to the knife, at least a little. Junior ministers no longer get bodyguards, and the number of security workers attached to the presidency has been reduced by a third.

In general, Mr. Ayrault has ordered his ministers to reduce their official budgets sharply, by 7 percent in 2013 and by an additional 4 percent in each of the next two years.

As he promised during the campaign, Mr. Hollande has cut ministerial salaries by 30 percent (including his own, to $18,000 a month from $26,000). And for the first time, the salaries of ministers cannot exceed the prime minister’s salary, which is about $16,000 a month. Pierre Moscovici, the finance minister, told L’Express that “my salary is lower than that of my chief of staff, 12,000 euros, and of a few hundred of the civil servants” at the ministry. That is about $14,600 a month.

It has also been stated that these tax increases would be in effect until 2017, when the government should have a balances budget.

Maybe we should consider some of these things and think about them. We know this will not happen here because our GREED, but I just thought to throw it out there for you to be informed. Little tweaks can go a long way. See you next week

References

http://www.businessinsider.com/francois-hollande-rises-tax-to-75-2012-8

http://siddalls.wordpress.com/2012/07/11/hollande-government-tax-proposals/


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