Wednesday, July 18, 2012

France Loves Hating its Rich

I'll admit it:  I've never been much in love with the French.

When I lived in New York City, a group of friends and I once pondered which nationality made for the worse tourists to the Big Apple, and the French made the head of the list.  We considered them to be rude and obnoxious - and coming from New Yorkers, that's saying something.

The Japanese made #2 on the list, as I recall, mostly because of their frustrating habit of gathering in a wide circle to bow at each other on the sidewalk outside of restaurants when they had finished a meal.  New York City sidewalks are made for transportation, not group calisthenics.

At least the Japanese, however, were trying to be polite to each other.  The French seem to not even care for their own people.  Of course, as generalities and stereotypes go, the French have given the world plenty of ammunition with which to shoot up their fabled, gilded, bureaucracy-bloated culture.  I'm sure individually, people from France can be quite charming and hospitable, but the face they collectively show the world often is anything but.

Take, for example, today's announcement that Zlatan Ibrahimovic will be paid 14 million euros annually to play soccer for the Paris Saint-Germain team.  Good news for him - at least, at first.  But it's better news for the French government.  The country's newly-elected president, Francois Hollande, has proposed a whopping 75% tax rate for anybody earning over 1 million euros a year (roughly $1.23 million).

Seventy. Five. Percent.

For all of my readers who think I'm a socialist or Democrat, hear me when I say that a 75% income tax rate is wholly immoral.  It's obscene, extraordinarily punitive, and, were this the United States, possibly unconstitutional.

True to form, one government official in Paris is already defending the 75% rate, scoffing that paying anybody 14 million euros to play a sport proves that more regulation is needed in France!

How anybody can blame high salaries solely on the lack of government regulations and keep a straight face is beyond me, but leave it to the French to draw such a correlation.  In the real world, shouldn't it be obvious that if anybody is not worth that much money to a soccer team, the team probably wouldn't be paying it?

And particularly when it comes to sports, if the athlete is a genuinely gifted phenom, then why can't they be worth what the market will pay them for their talents?  Salaries for athletes aren't like Wall Street bonuses or CEO stock options, which often seem to be more play money than legitimate, value-based compensation.  It may be that a team charges too much for tickets, or has duped broadcasters into over-paying for coverage of its matches, but on the whole, the sports industry is pretty much based on raw performance.  We Americans grumble all the time about how much our celebrity athletes are paid, but nobody has yet been able to come up with a compelling replacement for market demand.  If fans are stupid enough to support a €14 million salary for a player, why blame the player?

Because that's what Hollande wants to do, not only to Ibrahimovic, but to anybody fortunate enough - or, in this case, unfortunate enough - to earn over €1 million a year.  Good grief, I'm sounding uncomfortably similar to Rush Limbaugh here, but isn't it obvious?  Hollande wants to blame rich people for the money they make.

What's significant about the €1 million benchmark, anyway?  How did he arrive at that figure?  Currently, France's highest income tax bracket sets the threshold at €279,132, with a taxable rate at 41%, which is bad enough.  What if highly-paid French employees asked their employer to pay them €999,999.99 a year, with the rest of their income set aside in some sort of slush fund in the Caribbean?  Why should a person paid €900,000 a year receive preferential treatment over somebody who earns €1,100,000 per year?  Unless Hollande plans on imposing similarly ridiculous tax rates on high-six-figure incomes?

However you slice it, a 75% income tax rate reeks of unbridled greed and envy.  Okay, so maybe in the grand scheme of life, paying an athlete €14 million a year is silly and wasteful.  Maybe this is one of the areas in free market economics where morality doesn't quite keep pace with reality.  But is it any more moral to claim such a significant chunk of somebody's paycheck simply because you think it's too high?

To the extent conservative Americans are claiming that liberal tax policies amount to wealth redistribution, Ibrahimovic's very public scenario posits a clear and compelling proof of such claims.  Does that mean everybody should pay the same income tax rate?  Not necessarily, because as I've written before, it's a Biblical fact that "to whom much is given, much is required."  The French even have a phrase for it:  "noblesse oblige."  But at the same time, Jesus knew that tax collectors cheated workers out of their earnings; otherwise He wouldn't have encouraged Zacchaeus to return what he had earned through fraud.

Besides, logic dictates that particularly in a republic, there must be equity in tax codes, otherwise they'll become a complete joke, and provide a compelling argument for discrimination based on wealth.  I'm not sure a sound argument can be made that income tax rates which fluctuate a few percentage points between pay grades are immoral or illegal.  But demanding somebody hand over three-fourths of their income to the government?

Sacré bleu.

Then again, considering the reputation France already has, perhaps this latest swing at their uber-rich means simply "c'est la vie."

Yet another reason to be content not to be a millionaire... or at least, a French one.
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To get a sense of how far France has strayed from the republican ideals for which Theodore Roosevelt praised it in 1910, click here. By the way, in this speech, Roosevelt endorses "to whom much is given, much is required," too!

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