France Issues 75% Tax Policy- Is US next?


This week, France set a precedent for governments around the globe when it approved a new law that will levy a 75% tax on French companies that are paying employees €1 million or more in annual salaries. The new tax is widely understood to be symbolic, as a message to French citizens that something needs to be done to fix the national budget deficit, and it is the rich who have been targeted as major contributors in that effort.

The proposed 75% tax was originally designed to tax individuals that were making an excess of 1 million euros. However, after much backlash and a dismissal of the bill’s constitutionality, the bill was altered to target companies that are paying these high salaries, rather than the individuals earning them. The message behind this tax is one of “economic fairness.” Supporters of the tax hope that it will discourage companies from paying individuals excessively high salaries and will encourage a more balanced wealth distribution among French workers. In theory, if the average salary was higher, the average taxpayer would be contributing more to the staggering national debt crisis the country faces.

A 75% tax levy may seem like an extreme case that is likely isolated to France, a nation that has had its share of economic struggles in recent years, but it is not. The truth of the matter is that France is not alone in facing a major budget deficit and they are also not alone when it comes to using aggressive tax policy as a means to solve their problems.

Anyone who has kept a mild focus on national finances knows that the United States has been facing a budget crisis for years, and has yet to make any real moves towards solving the problem. In fact, many experts argue that our nation’s leaders are only making the problem worse as they continue to procrastinate by increasing the debt ceiling and allowing our deficit to increase annually by nearly $1 trillion in recent years.

Anyone who has kept a moderate tally on the changes in tax policy in the United States can recall that in our not-so-distant history the federal income tax on Americans was as high as 94%. The Individual Income Tax Act of 1944 levied the highest taxes in U.S. history as a response to an overwhelming national debt following World War II.

Putting the pieces together.

The United States, along with many other governments around the globe, are currently in very similar debt crises as France.  The United States has proven it is no stranger to using extreme tax policy as a solution. The spreading concern following the news of the controversial tax policy in France is whether or not it is laying the path for our political leaders to follow suit and bring on an era of increasing taxes.


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