9 ms·

French Entrepreneurs Revolt

73 points by Cbasedlifeform 14y ago

chrismealy 14y ago
Getting all the rich creeps to leave is a feature.
- fusiongyro 14y ago
  That's a myopic view of economics. How could it improve things to have the group with all the money leave, taking it with them?
  - ucee054 14y ago
    They can be prevented from taking it with them. Try renouncing US citizenship; you'll have to pay a big penalty to the IRS to do so...
    - fusiongyro 14y ago
      Yes, but people are starting to do it. People who get wealthy tend to care about their money a lot, and are very willing to do the math and see if the big penalty at departure is higher or lower than the sustained penalty of staying.
  - dscrd 14y ago
    But aren't you just legitimizing a sort of blackmail culture when you suggest that the rich must be pampered or they will take all their toys and go away?
- Cbasedlifeform 14y ago
  The problem is if they take the young gifted entrepreneurs with them. I heard anecdotally that they were already leaving e.g. for London and that was before this latest tax increase.
  - stfu 14y ago
    I truly hope that this is going to be the result of the French "situation". It would be once and for all great to have some more substantial evidence on how growth, innovation and consumption dramatically goes down, when governments go on a tax-the-wealthy witch hunt . Bernard Arnault should be hailed as an example, not a traitor, for leaving France and getting a Belgian citizenship. Postulating a Unified Europe by pushing the ongoing de-nationalization of the EU member countries is absolutely antithetic to the expectation that tax payers should feel obliged to pay taxes to their home country, and not switch to the one most beneficiary for them.
    - eli_gottlieb 14y ago
      Postulating a Unified Europe by pushing the ongoing de-nationalization of the EU member countries is absolutely antithetic to the expectation that tax payers should feel obliged to pay taxes to their home country, and not switch to the one most beneficiary for them. Which is precisely why de-nationalizing Europe is such a bad idea.
  - deleted 14y ago
    [deleted]
- irreverentbits 14y ago
  Yes, exactly. Disincentivizing innovation and the financial machine that backs it is an /excellent/ idea.
  - ucee054 14y ago
    First, find actual data to back the assertion that low capital gains taxes back innovation. I think you'll find that it is in fact seed capital and small business loans that back innovation, and that these facilities are generally provided by government not the private sector. I think you'll find that what low capital gains taxes do is allow hedge fund managers to get a lower tax rate by reclassifying their income.
    - irreverentbits 14y ago
      ... so you're telling me to find data before extending data-less guesses in an attempt to refute my assertion? Seems legit.
- paulhauggis 14y ago
  It's crazy how so many people in this generation believe that getting rich is evil and wrong..but being forced to give up 60-80% of your earnings to a government that will most likely squander it is not. Don't worry though. When all of the rich leave, there will be nobody left to tax.
  - jaggederest 14y ago
    Whatever you say, John Galt. Go it alone, you don't need those proles, and let us know how that treats you.
    - paulhauggis 14y ago
      Don't worry. I'm not in France and I will never open a business there if taxes are this high.
  - oelmekki 14y ago
    Those numbers are totally wrong. First, "pigeon"s don't talk about 80% but 60%. And they're wrong about that too. Here is an economical review from the law (translated from french) : http://goo.gl/70xwI http://goo.gl/70xwI The tax is not 60%, but 40%, worst case scenario ; and can be as low as 20% if conditions are met (keeping the business a long time, reinvesting money in an other company). Also, the purpose was not to blame rich ones, it was to tax transaction incomes at the same level as work income. Not more.
  - michaelochurch 14y ago
    France has universal healthcare, tougher environmental regulations, and 5 weeks of paid vacation for all working people. I hardly call that a "squandering" of resources. Fighting an oil war in the desert is closer to that.
    - paulhauggis 14y ago
      "universal healthcare" Since when has a monopoly ever been a good thing? "tougher environmental regulations" France also based many of them on the idea that we have man-made global warming. "5 weeks of paid vacation for all working people" I would rather leave that up to companies and have 30%+ more of my taxes. "Fighting an oil war in the desert is closer to that." You gave me 3 simple examples. Every government in every country is inefficient. France somehow believes that those inefficiencies will go away by taking away more money from its citizens.
- hnriot 14y ago
  It's true that some people get rich by exploitation and other nefarious means, but there are also people that get rich by doing things, by inventing, by discovering, by building companies, by doing the very things that a country like France needs to compete. A country that already hampers any real chance of getting ahead in the world (for example maximum work hours and mandated holidays) needs as much help as it can get, so maybe keeping people that got rich inside of France is actually a good thing. Maybe that chip on your shoulder is holding you back in more ways than you know.
  - yardie 14y ago
    > for example maximum work hours and mandated holidays Where are you getting this from? They have the same type of labor laws in the US and even in China (how it is enforced is up for debate). You agree to work a certain amount of hours (35-40), you go over the company pays more. And they can't make you agree to more than that. Holidays aren't mandatory, they are an entitlement. I may or may not work during Labor Day or Christmas. Most offices choose to shut down during holidays because, unless it is critical, with everyone else closed you it's almost impossible to get anything done.
    - zolbatar 14y ago
      I think what he is meaning by holiday is statutory vacation time; it's typical in Europe to get 5 weeks vacation time (I get 6).
      - simonh 14y ago
        I'm a conservative voting, free market believing Brit. I even work in the finance sector. But he american attitude to holidays appals me. I'm all for high productivity and commitment to work. I'm not even a fan of mandatory holiday allowances as I think that's should be up for negotiation. But you'll have to take my 25 day holiday allowance out of my cold, dead fingers. My kids get to grow up just once, and I'm absolutely going to be there to see it.
        14y ago
jdangu 14y ago
> the new Socialist administration proposed to tax an entrepreneur’s capital gains as ordinary income Actually, they plan to tax all capital gains as ordinary income, most of that comes from stock/financial investments. The article doesn't mention that this was not meant to impact entrepreneurs but is merely a side effect. As I understand it, there will most likely be an exemption for this case.
- pandaassembly 14y ago
  Thanks for this, the link posted is more of a rant than a careful analysis of the french environment for start ups.
ori_b 14y ago
The fact is that -- at least percentagewise -- the rich tend to be taxed far less than the middle class, precisely because capital gains tax tends to be so much lower. I'm not sure why this is considered a good thing, other than the assertion that it attracts rich people. I'm no economist, so maybe there's another good reason to give the highest earners a lower effective tax rate, but I don't see it.
- ojbyrne 14y ago
  I'm left of center politically, but the argument is that they put money they already have (and have paid taxes on) at risk by investing. They don't have to do that, and by doing so, they help the economy overall. So the government provides incentives to risk money that they don't really need to. Also middle class people can (and do) take advantage of the exact same mechanism.
  - eli_gottlieb 14y ago
    By that measure, isn't working putting your time at risk? After all, the company could collapse and go under any day, or, more likely, just lay you off any day! (I realize that equity instruments are far riskier than working, but debt instruments really aren't. With a bond or loan, the company owes you the money either way, just as it does when working for salary.) I see no reason that realized capital gains shouldn't just be treated as Yet Another Source of Income.
- deleted 14y ago
  [deleted]
- twoodfin 14y ago
  > The fact is that -- at least percentagewise -- the rich tend to be taxed far less than the middle class... If you're talking about Federal income taxes, that isn't true. Marginal rates for the middle class can exceed 15% (a married couple would have to earn ~$80K jointly before that happened), but the effective income tax rate for the median household is much lower than, say, Mitt Romney's.[1] Payroll taxes make this a closer run thing, but that's another story, and the trend since the Medicare reforms of the '90's (removing the FICA tax cap) and the ACA today (higher FICA tax on high income, new cap gains tax) has been to push the costs of broad social welfare programs onto high earners. [1] http://www.cbpp.org/cms/index.cfm?fa=view&id=3151 http://www.cbpp.org/cms/index.cfm?fa=view&id=3151
GuiA 14y ago
In the past 5 years, I haven't regretted leaving France once. I am thankful for having grown up there, but as an entrepreneur/engineer adult it would make no logical sense for me to stay there. The government complains about "la fuite des cerveaux" (brain drain), but they're not doing much to prevent it (whether it is for entrepreneurs or researchers— I've been in both camps).
- l0nk 14y ago
  Please stop whining. I'm a French "entrepreneur/engineer adult" and I have no reason to leave France.
- lloeki 14y ago
  The startup scene in France is glacial. During the presidential elections, the only political figure who seem to get it and bound to fix this mess was François Bayrou, while the remainder were focusing on saving what remains of our heavy industries. I randomly watch news/docs about some French "startup", and the spread mean size seems to be 20 to 100 employees. That's enough to make you think what "bootstrapping" means here. Even without talking about that side of things, it's extremely hard to find anyone technically truly competent to sidekick with, let alone in technologies compatible with startup rhythms (even Rails and Django are a rarity, the huge flock only knows C# and Java at a very, ahem, academic level). Not exactly helpful if you want to build your MVP quickly. I'm not even talking about the legal paperworks that would sink a founder's time like your nearby blackhole. I'm contemplating doing this myself since a few years and the amount of crap you have to wade through is astounding. The sanest solution is moving to the UK (but my personal situation prevents that, for now). The whole ecosystem is heavyweight and not nimble at all.
  - subsystem 14y ago
    I don't see how that's different from everywhere else.
    - michaelochurch 14y ago
      Excellent point. The idea that the U.S. is an entrepreneurial hotbed outside of a few small areas (in which costs of living are absurd and real estate parasites take most of the benefit) is laughable. "The U.S." is a leader in technology because of Silicon Valley, and in finance because of Wall Street. Take those two locations away and you have an average European country: not terrible, but not something that other countries would go out of their way to emulate.
StefanKarpinski 14y ago
Title would have been much better link bait as "Revolting French Entrepreneurs".
mmariani 14y ago
I sincerely hope that other EU members don't follow suit on this outrageously stupid idea. Because if so, it'll be the beginning of the end for Europe.
mathieuh 14y ago
This is why neo-liberalism and social democracy do not work. You can reform capitalism all you like, right up until the upper class decides they'd quite like to go back to being many times richer than the working class.
- eli_gottlieb 14y ago
  Social democracy should never work, in theory. It works fairly well, in practice. But frankly, saying that social democracy can't ever work because neoliberalism murdered it is not exactly a good theory. Hey, though, I'm as in favor of smashing capitalism once-and-for-all as you are.
guelo 14y ago
The problem in all of Europe is that the ECB has insanely decided to maintain tight money during a recession. This is slowing down economies across the continent and forcing governments into austerity budgeting which acts as a pro-cyclical intensifier of the recessions. So being forced into an austerity budget you have two levers, cutting spending or increasing taxes. Both will hurt the economy, the question is which is worse. France being richer than, for example, Spain has a little more room to maneuver. Entrepreneurs like to look at the so-called supply-side arguments but the mirror demand-side argument is frequently ignored, if people don't have money to spend they're not going to buy what you're selling. Economics being the joke science that it is these issues are argued endlessly without resolution, though there is some evidence that tax policy does not have that big of an effect on economic growth. But what we can say for sure about cutting social services is that lower and middle class people will suffer more from these cuts than the entrepreneurs will suffer from tax hikes since normally the entrepreneur will have more personal money to absorb the hit. Again, this could be avoided if ECB would adopt more pro-growth monetary policy.
- fauigerzigerk 14y ago
  When you say "entrepreneurs" you must be thinking of the L'Oreal or Hilton heirs. I see lots of heavily indebted entrepreneurs in Europe taking on big personal risk, both financially and in terms of career risk. European entrepreneurs rely on bank loans much more than the typical U.S business. There's very little equity in many small businesses. Enrepreneurs who are now wealthy often had to struggle for many years in poverty without much social security before they achieved that kind of success. Many fail as well. I think you're mixing up entrepreneurs and big corporations. Big corporations can absorb or avoid paying taxes in any particular country, but entrepreneurs often can't. I do agree with you that monetary policy should be counter cyclical and it is. The ECB has tripled its balance sheet since 2007 and it has lowered interest rates to 0.75%, which is way below CPI. I agree that they should have been even more aggressive but there's a political reality as well. Monetary policy is not the issue here. The problem is counter cyclical fiscal policy. It has to stand on both legs. If you don't run a surplus in boom times you're not going to be able to spend enough during downturns. But our political systems seem to be structually pro cyclical. During boom times, the right wants to cut taxes or fund wars and the left wants to extend benefits. Nobody wants to run a surplus and pay down debt.
anovikov 14y ago
Stupid move in an economy so (internally) open as EU. Companies will just move somewhere nearby, and the commies will suffer.
- ucee054 14y ago
  "Commies"? Really? You don't understand the difference between putting up taxes and running the Gulag Archipelago?
gadders 14y ago
Fortunately, there is a free [1] enterprise zone just a few hundred miles from Paris where many French entrepreneurs and businessmen can locate to. It's called London [2] [1] Relatively speaking [2] http://www.dailymail.co.uk/news/article-2174704/Wealthy-French-moving-Britain-escape-Hollandes-plan-75-cent-tax-rich.html http://www.dailymail.co.uk/news/article-2174704/Wealthy-Fren...
- rmc 14y ago
  I would not trust the Daily Mail when it comes to how great the UK is and how terrible other EU countries are.
  - gadders 14y ago
    First link I could find. Have a similar one from the BBC: http://www.bbc.co.uk/news/magazine-18234930 http://www.bbc.co.uk/news/magazine-18234930
    - rmc 14y ago
      Now, how many British people live in Paris? According to Eurostat there are more British people in France than French people in UK ( http://www.guardian.co.uk/news/datablog/2012/jan/26/europe-population-who-lives-where http://www.guardian.co.uk/news/datablog/2012/jan/26/europe-p... ). Not to mention the coast of Spain which is "England in the Sun". I can't find figures on cities. There are always people who move around./
      - gadders 14y ago
        Not sure about Paris, but the Brits moving to Spain aren't moving to start businesses (unless you count "Lineker's UK Fun Pub" and similar).
DanielBMarkham 14y ago
From what I understand, when it comes to policy, many on the left seem focused on the person first, the money second. Is a rich person unfairly profiting from our great country? Couldn't we take that money and do something better with it? After all, aren't the needs of many people greater than the needs of just one? Let's look at people, decide how fair they are treated, then make the money do that. Others (including myself) focus on the money. Is the money being used efficiently for things the population wants? How can people more efficiently allocate money so that we all benefit. After all, if the money is being used to its maximum effectiveness, shouldn't all the people benefit? Let's look at the money, decide how efficiently we can get that to move around, then the people will follow along behind that. Capital gains is where this difference in philosophy hits hardest. Do we want rich folks paying the same as wage earners? Or do we want people who are better at allocating money to things that advance the species in general to have more ability to do more of that? There's no right or wrong answer. People on both sides take the arguments too far. But when you have no entrepreneurial community and the few that you have are publicly screaming at you to slack off, perhaps you've gone a little too far in one direction. My question is "How do governments learn what is a happy medium?" I think the answer is regularly changing up who is in charge, because there is no exact and unchanging answer. Here's hoping the French will have a chance to adjust before they destroy what little is left of their startup economy. I'd also note that laws and policy many times are made based on the public's caricatured idea of something instead of the thing that actually exists. In the U.S., it's common to hear politicians rail against "big corporations" while proposing policies that would sack the local stock broker or web startup guy. Meanwhile the truly large corporations have lawyered up and done enough regulatory capture that they skate through. There can be a huge difference between what's advertised and what the public actually gets.
- pingou 14y ago
  "Or do we want people who are better at allocating money to things that advance the species in general to have more ability to do more of that" I disagree, I don't think most entrepreneurs invest to advance the species in general, from my point of view they invest in things that have a potential to make money, while the government has a better incentive to fund something useful but with less direct financial benefits. But of course you can give a lot of counter-examples.

Getting all the rich creeps to leave is a feature.

fusiongyro 14y ago
That's a myopic view of economics. How could it improve things to have the group with all the money leave, taking it with them?
- ucee054 14y ago
  They can be prevented from taking it with them. Try renouncing US citizenship; you'll have to pay a big penalty to the IRS to do so...
  - fusiongyro 14y ago
    Yes, but people are starting to do it. People who get wealthy tend to care about their money a lot, and are very willing to do the math and see if the big penalty at departure is higher or lower than the sustained penalty of staying.
- dscrd 14y ago
  But aren't you just legitimizing a sort of blackmail culture when you suggest that the rich must be pampered or they will take all their toys and go away?
Cbasedlifeform 14y ago
The problem is if they take the young gifted entrepreneurs with them. I heard anecdotally that they were already leaving e.g. for London and that was before this latest tax increase.
- stfu 14y ago
  I truly hope that this is going to be the result of the French "situation". It would be once and for all great to have some more substantial evidence on how growth, innovation and consumption dramatically goes down, when governments go on a tax-the-wealthy witch hunt . Bernard Arnault should be hailed as an example, not a traitor, for leaving France and getting a Belgian citizenship. Postulating a Unified Europe by pushing the ongoing de-nationalization of the EU member countries is absolutely antithetic to the expectation that tax payers should feel obliged to pay taxes to their home country, and not switch to the one most beneficiary for them.
  - eli_gottlieb 14y ago
    Postulating a Unified Europe by pushing the ongoing de-nationalization of the EU member countries is absolutely antithetic to the expectation that tax payers should feel obliged to pay taxes to their home country, and not switch to the one most beneficiary for them. Which is precisely why de-nationalizing Europe is such a bad idea.
- deleted 14y ago
  [deleted]
irreverentbits 14y ago
Yes, exactly. Disincentivizing innovation and the financial machine that backs it is an /excellent/ idea.
- ucee054 14y ago
  First, find actual data to back the assertion that low capital gains taxes back innovation. I think you'll find that it is in fact seed capital and small business loans that back innovation, and that these facilities are generally provided by government not the private sector. I think you'll find that what low capital gains taxes do is allow hedge fund managers to get a lower tax rate by reclassifying their income.
  - irreverentbits 14y ago
    ... so you're telling me to find data before extending data-less guesses in an attempt to refute my assertion? Seems legit.
paulhauggis 14y ago
It's crazy how so many people in this generation believe that getting rich is evil and wrong..but being forced to give up 60-80% of your earnings to a government that will most likely squander it is not. Don't worry though. When all of the rich leave, there will be nobody left to tax.
- jaggederest 14y ago
  Whatever you say, John Galt. Go it alone, you don't need those proles, and let us know how that treats you.
  - paulhauggis 14y ago
    Don't worry. I'm not in France and I will never open a business there if taxes are this high.
- oelmekki 14y ago
  Those numbers are totally wrong. First, "pigeon"s don't talk about 80% but 60%. And they're wrong about that too. Here is an economical review from the law (translated from french) : http://goo.gl/70xwI http://goo.gl/70xwI The tax is not 60%, but 40%, worst case scenario ; and can be as low as 20% if conditions are met (keeping the business a long time, reinvesting money in an other company). Also, the purpose was not to blame rich ones, it was to tax transaction incomes at the same level as work income. Not more.
- michaelochurch 14y ago
  France has universal healthcare, tougher environmental regulations, and 5 weeks of paid vacation for all working people. I hardly call that a "squandering" of resources. Fighting an oil war in the desert is closer to that.
  - paulhauggis 14y ago
    "universal healthcare" Since when has a monopoly ever been a good thing? "tougher environmental regulations" France also based many of them on the idea that we have man-made global warming. "5 weeks of paid vacation for all working people" I would rather leave that up to companies and have 30%+ more of my taxes. "Fighting an oil war in the desert is closer to that." You gave me 3 simple examples. Every government in every country is inefficient. France somehow believes that those inefficiencies will go away by taking away more money from its citizens.
hnriot 14y ago
It's true that some people get rich by exploitation and other nefarious means, but there are also people that get rich by doing things, by inventing, by discovering, by building companies, by doing the very things that a country like France needs to compete. A country that already hampers any real chance of getting ahead in the world (for example maximum work hours and mandated holidays) needs as much help as it can get, so maybe keeping people that got rich inside of France is actually a good thing. Maybe that chip on your shoulder is holding you back in more ways than you know.
- yardie 14y ago
  > for example maximum work hours and mandated holidays Where are you getting this from? They have the same type of labor laws in the US and even in China (how it is enforced is up for debate). You agree to work a certain amount of hours (35-40), you go over the company pays more. And they can't make you agree to more than that. Holidays aren't mandatory, they are an entitlement. I may or may not work during Labor Day or Christmas. Most offices choose to shut down during holidays because, unless it is critical, with everyone else closed you it's almost impossible to get anything done.
  - zolbatar 14y ago
    I think what he is meaning by holiday is statutory vacation time; it's typical in Europe to get 5 weeks vacation time (I get 6).
    - simonh 14y ago
      I'm a conservative voting, free market believing Brit. I even work in the finance sector. But he american attitude to holidays appals me. I'm all for high productivity and commitment to work. I'm not even a fan of mandatory holiday allowances as I think that's should be up for negotiation. But you'll have to take my 25 day holiday allowance out of my cold, dead fingers. My kids get to grow up just once, and I'm absolutely going to be there to see it.
      - 14y ago

> the new Socialist administration proposed to tax an entrepreneur’s capital gains as ordinary income Actually, they plan to tax all capital gains as ordinary income, most of that comes from stock/financial investments. The article doesn't mention that this was not meant to impact entrepreneurs but is merely a side effect. As I understand it, there will most likely be an exemption for this case.

pandaassembly 14y ago
Thanks for this, the link posted is more of a rant than a careful analysis of the french environment for start ups.

ori_b 14y ago

The fact is that -- at least percentagewise -- the rich tend to be taxed far less than the middle class, precisely because capital gains tax tends to be so much lower. I'm not sure why this is considered a good thing, other than the assertion that it attracts rich people. I'm no economist, so maybe there's another good reason to give the highest earners a lower effective tax rate, but I don't see it.

ojbyrne 14y ago
I'm left of center politically, but the argument is that they put money they already have (and have paid taxes on) at risk by investing. They don't have to do that, and by doing so, they help the economy overall. So the government provides incentives to risk money that they don't really need to. Also middle class people can (and do) take advantage of the exact same mechanism.
- eli_gottlieb 14y ago
  By that measure, isn't working putting your time at risk? After all, the company could collapse and go under any day, or, more likely, just lay you off any day! (I realize that equity instruments are far riskier than working, but debt instruments really aren't. With a bond or loan, the company owes you the money either way, just as it does when working for salary.) I see no reason that realized capital gains shouldn't just be treated as Yet Another Source of Income.
deleted 14y ago
[deleted]
twoodfin 14y ago
> The fact is that -- at least percentagewise -- the rich tend to be taxed far less than the middle class... If you're talking about Federal income taxes, that isn't true. Marginal rates for the middle class can exceed 15% (a married couple would have to earn ~$80K jointly before that happened), but the effective income tax rate for the median household is much lower than, say, Mitt Romney's.[1] Payroll taxes make this a closer run thing, but that's another story, and the trend since the Medicare reforms of the '90's (removing the FICA tax cap) and the ACA today (higher FICA tax on high income, new cap gains tax) has been to push the costs of broad social welfare programs onto high earners. [1] http://www.cbpp.org/cms/index.cfm?fa=view&id=3151 http://www.cbpp.org/cms/index.cfm?fa=view&id=3151

GuiA 14y ago

In the past 5 years, I haven't regretted leaving France once. I am thankful for having grown up there, but as an entrepreneur/engineer adult it would make no logical sense for me to stay there. The government complains about "la fuite des cerveaux" (brain drain), but they're not doing much to prevent it (whether it is for entrepreneurs or researchers— I've been in both camps).

l0nk 14y ago
Please stop whining. I'm a French "entrepreneur/engineer adult" and I have no reason to leave France.
lloeki 14y ago
The startup scene in France is glacial. During the presidential elections, the only political figure who seem to get it and bound to fix this mess was François Bayrou, while the remainder were focusing on saving what remains of our heavy industries. I randomly watch news/docs about some French "startup", and the spread mean size seems to be 20 to 100 employees. That's enough to make you think what "bootstrapping" means here. Even without talking about that side of things, it's extremely hard to find anyone technically truly competent to sidekick with, let alone in technologies compatible with startup rhythms (even Rails and Django are a rarity, the huge flock only knows C# and Java at a very, ahem, academic level). Not exactly helpful if you want to build your MVP quickly. I'm not even talking about the legal paperworks that would sink a founder's time like your nearby blackhole. I'm contemplating doing this myself since a few years and the amount of crap you have to wade through is astounding. The sanest solution is moving to the UK (but my personal situation prevents that, for now). The whole ecosystem is heavyweight and not nimble at all.
- subsystem 14y ago
  I don't see how that's different from everywhere else.
  - michaelochurch 14y ago
    Excellent point. The idea that the U.S. is an entrepreneurial hotbed outside of a few small areas (in which costs of living are absurd and real estate parasites take most of the benefit) is laughable. "The U.S." is a leader in technology because of Silicon Valley, and in finance because of Wall Street. Take those two locations away and you have an average European country: not terrible, but not something that other countries would go out of their way to emulate.

StefanKarpinski 14y ago

Title would have been much better link bait as "Revolting French Entrepreneurs".

mmariani 14y ago

I sincerely hope that other EU members don't follow suit on this outrageously stupid idea. Because if so, it'll be the beginning of the end for Europe.

mathieuh 14y ago

This is why neo-liberalism and social democracy do not work. You can reform capitalism all you like, right up until the upper class decides they'd quite like to go back to being many times richer than the working class.

eli_gottlieb 14y ago
Social democracy should never work, in theory. It works fairly well, in practice. But frankly, saying that social democracy can't ever work because neoliberalism murdered it is not exactly a good theory. Hey, though, I'm as in favor of smashing capitalism once-and-for-all as you are.

guelo 14y ago

The problem in all of Europe is that the ECB has insanely decided to maintain tight money during a recession. This is slowing down economies across the continent and forcing governments into austerity budgeting which acts as a pro-cyclical intensifier of the recessions. So being forced into an austerity budget you have two levers, cutting spending or increasing taxes. Both will hurt the economy, the question is which is worse. France being richer than, for example, Spain has a little more room to maneuver. Entrepreneurs like to look at the so-called supply-side arguments but the mirror demand-side argument is frequently ignored, if people don't have money to spend they're not going to buy what you're selling. Economics being the joke science that it is these issues are argued endlessly without resolution, though there is some evidence that tax policy does not have that big of an effect on economic growth. But what we can say for sure about cutting social services is that lower and middle class people will suffer more from these cuts than the entrepreneurs will suffer from tax hikes since normally the entrepreneur will have more personal money to absorb the hit. Again, this could be avoided if ECB would adopt more pro-growth monetary policy.

fauigerzigerk 14y ago
When you say "entrepreneurs" you must be thinking of the L'Oreal or Hilton heirs. I see lots of heavily indebted entrepreneurs in Europe taking on big personal risk, both financially and in terms of career risk. European entrepreneurs rely on bank loans much more than the typical U.S business. There's very little equity in many small businesses. Enrepreneurs who are now wealthy often had to struggle for many years in poverty without much social security before they achieved that kind of success. Many fail as well. I think you're mixing up entrepreneurs and big corporations. Big corporations can absorb or avoid paying taxes in any particular country, but entrepreneurs often can't. I do agree with you that monetary policy should be counter cyclical and it is. The ECB has tripled its balance sheet since 2007 and it has lowered interest rates to 0.75%, which is way below CPI. I agree that they should have been even more aggressive but there's a political reality as well. Monetary policy is not the issue here. The problem is counter cyclical fiscal policy. It has to stand on both legs. If you don't run a surplus in boom times you're not going to be able to spend enough during downturns. But our political systems seem to be structually pro cyclical. During boom times, the right wants to cut taxes or fund wars and the left wants to extend benefits. Nobody wants to run a surplus and pay down debt.

anovikov 14y ago

Stupid move in an economy so (internally) open as EU. Companies will just move somewhere nearby, and the commies will suffer.

ucee054 14y ago
"Commies"? Really? You don't understand the difference between putting up taxes and running the Gulag Archipelago?

gadders 14y ago

Fortunately, there is a free [1] enterprise zone just a few hundred miles from Paris where many French entrepreneurs and businessmen can locate to. It's called London [2] [1] Relatively speaking [2] http://www.dailymail.co.uk/news/article-2174704/Wealthy-French-moving-Britain-escape-Hollandes-plan-75-cent-tax-rich.html http://www.dailymail.co.uk/news/article-2174704/Wealthy-Fren...

rmc 14y ago
I would not trust the Daily Mail when it comes to how great the UK is and how terrible other EU countries are.
- gadders 14y ago
  First link I could find. Have a similar one from the BBC: http://www.bbc.co.uk/news/magazine-18234930 http://www.bbc.co.uk/news/magazine-18234930
  - rmc 14y ago
    Now, how many British people live in Paris? According to Eurostat there are more British people in France than French people in UK ( http://www.guardian.co.uk/news/datablog/2012/jan/26/europe-population-who-lives-where http://www.guardian.co.uk/news/datablog/2012/jan/26/europe-p... ). Not to mention the coast of Spain which is "England in the Sun". I can't find figures on cities. There are always people who move around./
    - gadders 14y ago
      Not sure about Paris, but the Brits moving to Spain aren't moving to start businesses (unless you count "Lineker's UK Fun Pub" and similar).

DanielBMarkham 14y ago

From what I understand, when it comes to policy, many on the left seem focused on the person first, the money second. Is a rich person unfairly profiting from our great country? Couldn't we take that money and do something better with it? After all, aren't the needs of many people greater than the needs of just one? Let's look at people, decide how fair they are treated, then make the money do that. Others (including myself) focus on the money. Is the money being used efficiently for things the population wants? How can people more efficiently allocate money so that we all benefit. After all, if the money is being used to its maximum effectiveness, shouldn't all the people benefit? Let's look at the money, decide how efficiently we can get that to move around, then the people will follow along behind that. Capital gains is where this difference in philosophy hits hardest. Do we want rich folks paying the same as wage earners? Or do we want people who are better at allocating money to things that advance the species in general to have more ability to do more of that? There's no right or wrong answer. People on both sides take the arguments too far. But when you have no entrepreneurial community and the few that you have are publicly screaming at you to slack off, perhaps you've gone a little too far in one direction. My question is "How do governments learn what is a happy medium?" I think the answer is regularly changing up who is in charge, because there is no exact and unchanging answer. Here's hoping the French will have a chance to adjust before they destroy what little is left of their startup economy. I'd also note that laws and policy many times are made based on the public's caricatured idea of something instead of the thing that actually exists. In the U.S., it's common to hear politicians rail against "big corporations" while proposing policies that would sack the local stock broker or web startup guy. Meanwhile the truly large corporations have lawyered up and done enough regulatory capture that they skate through. There can be a huge difference between what's advertised and what the public actually gets.

pingou 14y ago
"Or do we want people who are better at allocating money to things that advance the species in general to have more ability to do more of that" I disagree, I don't think most entrepreneurs invest to advance the species in general, from my point of view they invest in things that have a potential to make money, while the government has a better incentive to fund something useful but with less direct financial benefits. But of course you can give a lot of counter-examples.