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France Raises Tax Rate for Top Income Earners to 75%

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    First Trust Advisors’ Brian Wesbury on France’s rising tax rate.

  • Duration 5:52
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Poking out of our top story tonight no matter what you're paying in taxes right now.

I'd be better -- -- Seven -- 5% is now at the wealthiest citizens they brands have to pay their government.

That is thank you to the country's socialist president -- is he looks happy doesn't -- How you feel about giving 75% of your income to Uncle Sam for now that -- tax rate is seeing on the other side the time.

I know now are we next joining me now for more on this.

Profits advisors chief economist Brian Wesbury Brian.

-- great to have you back from the show and I just fear.

That there are folks in Washington look at this and say now that French banking and they are thinking right and then a scary right -- We know they can yes we know they like a lot of things that that the French like big government big spending big entitlement programs.

And and this is the last gas -- I I call this Paul Krugman is Alamo.

We have to say it's the Waterloo right right so we've spent all this money we can't afford it so now we are going to tax.

It is -- un we're gonna confiscate people's income to tried to pay for all of this.

And what they will do is destroy.

-- economy so this will be.

This this will be the end for France they this can't last that how log -- I can't imagine he's president for much longer I.

That is popularity is plummeting.

It it kind of depends on you know -- -- The Who is.

Who's out -- voting whether or not they supported I mean I know in France there are whole bunch of people that are looking to leave you have.

Super Victoria's Secret secret supermodels who are now saying they're gonna leave the country right the head of LB of ages is saying is -- the country -- the CEO.

Beauty companies saying that they are going to and it they're -- have -- really hard time -- I think -- -- out but -- never really aren't they were pretty executives.

Because why would somebody want to come to France -- market but -- it giveaways 70% of third -- -- -- That's everybody who's racing for the door.

-- hate and you know what they've raise tax rates across the board to the 41% rate went to 45.

They now have a higher tax rate than the average European tax.

Remember Airbus is in France so.

And and part of this tax hike they're taking away the ability of corporations to deduct interest on their debt.

Which every country allows around the world this Airbus is going to become uncompetitive they how can you hire an engineer when their tax rate.

Is higher.

In France that it is say in the United States plus the corporation is falling behind because their tax rates.

Are going up.

Did their businesses won't go away they will lose competitiveness people will move as you've just said hi this is a disaster and then there's things you can't see.

You know so let's say you're a surgeon.

And you don't wanna pay a 75%.

Tax rate so what you do is you've been canceled surgeries and you go pay your own house from which takes away business from the painter.

And if the whole economy becomes inefficient and that's why I mean this is going to be a disaster for France we.

Not at the whole world learned that these kinds of tax rates are highly unproductive I.

I don't know I mean they're gonna have to watch closely to really learn that lesson because I'm not sure everybody takes credit way having been one of the biggest points is that whenever you do something like this it never brings in the revenue that they think it's going to for example right.

You know they think that this is going to -- thirty billion Euro or 39 billion dollars.

And help them club closed their deficit next year we look at the example you know this was tried and organ in 2010.

It didn't bring in the revenue that topic tried -- same experiment in Illinois it didn't bring in the revenue they thought.

Do you think that down the line though.

You know somebody's gonna have a scorecard and say this is what you thought it was gonna bring in but it didn't happen.

Will they they will have to.

Two analysts -- you know so initially you're absolutely right initially.

When you raise taxes of ember -- were halfway through a tax years so you can't.

You can't move today and not claim you -- that money in France so.

People will have to pay higher taxes this year so they might have a little bit better of a budget over the next twelve may -- eighteen months.

But after that things start to fall apart but more importantly.

Businesses are going to see growth slow down and they're gonna have to lay off workers and this is where the polls.

And other -- the politics starts to work against the -- -- that this is where comes home to the US because immediately today all across the news I when people were reporting the story -- -- saying.

You know in France the top income brackets gonna pay 75% that compares to 35%.

In the US.

Comparatively.

That looks small and it invites an increase in taxes it's also not -- to look at the federal tax and isolation I mean.

The top income bracket doesn't need 35% they -- a lot more than that when you layer in state and local of all the other property taxes everything else you're paying so do you think that this -- -- the same tax and the US -- my cancer.

Well there I mean I am certain that Paul Krugman for example would love to bring 175%.

Tax rate to the United States.

He wouldn't really want to pay it.

But -- and and by the way we now allow people -- have voluntarily pay whatever they want right but but in the -- but in the end in his economic models he thinks this makes sense.

So I am sure that we will have this debate.

Or at least somebody propose something like this in the United States and I I highly doubt that we will ever see a rate above 40% anytime and then in in our lifetime you know you -- have learned from -- selling.

Now I I would like to see sort of like a rumble in the jungle type thing you know maybe -- -- boxing matches on -- debated the varied needs but I don't know you guys really.

You have -- little -- going air Brian thank you for coming -- we get your time have a great weekend absolute.

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