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Yes, there are two sides to the coin. Look at France, which once had a 75 percent tax rate [1] on the wealthy. When you are only getting 25 percent of what you

Yes, there are two sides to the coin. Look at France, which once had a 75 percent tax rate [1] on the wealthy. When you are only getting 25 percent of what you make (or even 50 percent in many countries), you have that much less incentive to succeed and others have that much less incentive to invest. There are not very many French startups, relative to other countries. I'm not saying you can't have the best of both worlds. You could have a good social program and low taxes, if you cut things like defense spending (I believe in a strong defense, but I also believe that in the US we let contractors bill excessively and do little to curb it). But I think you give the consumer more freedom when you just cut taxes - it gives them the choice of what they want to buy, without government imposed restrictions (i.e. certain things not being covered in healthcare, having to live in low income housing, etc). If you want to encourage startups, you can always provide government grants (most countries already do in many areas), or tax breaks for small businesses. [1] http://www.theguardian.com/world/2014/dec/31/france-drops-75percent-supertax http://www.theguardian.com/world/2014/dec/31/france-drops-75...

weddpros 12y ago
France is definitely a counter example in my opinion: one of the strongest welfare in the world is producing more unemployment than anything, and certainly not entrepreneurs.
duaneb 12y ago
Just because there aren't french startups doesn't mean that french entrepreneurs aren't successful. This is about culture, not "where are startups located".
- gavanwoolery 12y ago
  I believe there is nothing that differentiates a French man from an American (a large part of America was colonized by the French, after all!). French entrepreneurs can be just as successful, but IMHO they would flourish better in a lighter government.
  - duaneb 12y ago
    > (a large part of America was colonized by the French, after all!) I mean, perhaps indirectly, but it's not like new orleans or quebec are either tech hubs or paragons of french culture.
  - weddpros 12y ago
    I think we're vastly different. When in school in France, nobody will ever ask you if you want to start a business, and entrepreneurs are depicted as vilains. Your family will consider you've chosen the dark side of the force and will insist a "regular job" would be so much less risky. You'll have no idea how a business works, and nobody really knows around you. You'll be told to get a job. You'll be told that working for the government, like 25% of the people, is the way to go. You'll be told that you must choose welfare (France) or business freedom (USA). You'll be told that the only good business is a non-profit association. etc... We're all humans, but we're made different by the society. And it takes efforts to fight what "culture" has put in your mind. In french, we use the same work for "company" and "society"...
mauricemir 12y ago
Entrepreneurs are not bothered about income tax rates you make your $$ via capital gains. Frances problems in this area are more to do with the technocratic elite from ena running the show
majormajor 12y ago
The post-World War II US had even higher top marginal income tax rates than that, but many see the US 50s as glory days economically. Certainly there was a lot of progress and innovation going on. 94% for 1944 and 1945. Above 90% until 1964. Above 70% until 1982. http://en.wikipedia.org/wiki/Income_tax_in_the_United_States#History_of_top_rates http://en.wikipedia.org/wiki/Income_tax_in_the_United_States...
- gavanwoolery 12y ago
  Yes, has largely to do with our shift from blue collar jobs I think (we are no longer producing housing/infrastructure/automobiles/etc at the rate we once were). We are seeing this growth in places like China and India where these jobs still dominate.
  - majormajor 12y ago
    I don't follow. Companies like Apple and Microsoft, among others, were founded regardless of the US having a 70% top income tax rate; what's the connection between that and blue collar jobs?
    - gavanwoolery 12y ago
      Oh, I'm just saying that the 50s were "the glory days" because there was no shortage of jobs, relatively low inflation (IIRC?), high housing demand, etc. College degrees (up until maybe as late as the early 90s) used to guarantee you a good job, and student debt was far lower, and overall there are many factors that you can't necessarily correlate directly to economic policy (IMHO). A lot of our jobs are going overseas (but they are jobs we don't particularly want, I suppose). That goes as well for current economic policy I think - for example, we see a lot of growth in Silicon Valley even though California is no haven for businesses (albeit many of those get registered in Nevada).
  - s73v3r 12y ago
    The US is still the #1 or #2 manufacturer in the world. We regularly jockey with China for that.
a_c_s 12y ago
France is actually one of the examples used in the article. "When France lowered the barriers to receiving unemployment insurance, it actually increased the rate of entrepreneurship.. Until 2001, citizens on unemployment insurance had little incentive to start businesses, since doing so would terminate their benefits. Instead of gutting the program, the state simply decided to let anyone who founded a business keep drawing benefits for a limited period, and guaranteed that they would be eligible again if that business failed. The result: a 25 percent increase in the rate of new-firm creation."
- gavanwoolery 12y ago
  Yes, its a good example, although difficult to pin causation/correlation as I'm sure there are many other variables in play. :) I'm not trying to dismiss it, only throw the theory into question.
  - a_c_s 12y ago
    This article is based on multiple studies done by people at Ivy League institutions. Trying to "throw the theory into question" with a few generalizations isn't contributing to intelligent discussion. HN is fast becoming Slashdot, where people only read headlines before diving into commenting.
s73v3r 12y ago
Your statement is completely dishonest. It is NOT a 75% tax. It is a 75% tax on income over 1MM Euros. HUGE difference. And your bit about simply cutting taxes is just not true. It has not shown to be true in any of the areas of the country where taxes were aggressively cut. In fact, in some of those places, like Kansas, things are worse than before, because the gains you claim would come never did, and they didn't have the income to be able to continue aid for things like education or food stamps.

weddpros 12y ago

France is definitely a counter example in my opinion: one of the strongest welfare in the world is producing more unemployment than anything, and certainly not entrepreneurs.

duaneb 12y ago

Just because there aren't french startups doesn't mean that french entrepreneurs aren't successful. This is about culture, not "where are startups located".

gavanwoolery 12y ago
I believe there is nothing that differentiates a French man from an American (a large part of America was colonized by the French, after all!). French entrepreneurs can be just as successful, but IMHO they would flourish better in a lighter government.
- duaneb 12y ago
  > (a large part of America was colonized by the French, after all!) I mean, perhaps indirectly, but it's not like new orleans or quebec are either tech hubs or paragons of french culture.
- weddpros 12y ago
  I think we're vastly different. When in school in France, nobody will ever ask you if you want to start a business, and entrepreneurs are depicted as vilains. Your family will consider you've chosen the dark side of the force and will insist a "regular job" would be so much less risky. You'll have no idea how a business works, and nobody really knows around you. You'll be told to get a job. You'll be told that working for the government, like 25% of the people, is the way to go. You'll be told that you must choose welfare (France) or business freedom (USA). You'll be told that the only good business is a non-profit association. etc... We're all humans, but we're made different by the society. And it takes efforts to fight what "culture" has put in your mind. In french, we use the same work for "company" and "society"...

mauricemir 12y ago

Entrepreneurs are not bothered about income tax rates you make your $$ via capital gains. Frances problems in this area are more to do with the technocratic elite from ena running the show

majormajor 12y ago

The post-World War II US had even higher top marginal income tax rates than that, but many see the US 50s as glory days economically. Certainly there was a lot of progress and innovation going on. 94% for 1944 and 1945. Above 90% until 1964. Above 70% until 1982. http://en.wikipedia.org/wiki/Income_tax_in_the_United_States#History_of_top_rates http://en.wikipedia.org/wiki/Income_tax_in_the_United_States...

gavanwoolery 12y ago
Yes, has largely to do with our shift from blue collar jobs I think (we are no longer producing housing/infrastructure/automobiles/etc at the rate we once were). We are seeing this growth in places like China and India where these jobs still dominate.
- majormajor 12y ago
  I don't follow. Companies like Apple and Microsoft, among others, were founded regardless of the US having a 70% top income tax rate; what's the connection between that and blue collar jobs?
  - gavanwoolery 12y ago
    Oh, I'm just saying that the 50s were "the glory days" because there was no shortage of jobs, relatively low inflation (IIRC?), high housing demand, etc. College degrees (up until maybe as late as the early 90s) used to guarantee you a good job, and student debt was far lower, and overall there are many factors that you can't necessarily correlate directly to economic policy (IMHO). A lot of our jobs are going overseas (but they are jobs we don't particularly want, I suppose). That goes as well for current economic policy I think - for example, we see a lot of growth in Silicon Valley even though California is no haven for businesses (albeit many of those get registered in Nevada).
- s73v3r 12y ago
  The US is still the #1 or #2 manufacturer in the world. We regularly jockey with China for that.

a_c_s 12y ago

France is actually one of the examples used in the article. "When France lowered the barriers to receiving unemployment insurance, it actually increased the rate of entrepreneurship.. Until 2001, citizens on unemployment insurance had little incentive to start businesses, since doing so would terminate their benefits. Instead of gutting the program, the state simply decided to let anyone who founded a business keep drawing benefits for a limited period, and guaranteed that they would be eligible again if that business failed. The result: a 25 percent increase in the rate of new-firm creation."

gavanwoolery 12y ago
Yes, its a good example, although difficult to pin causation/correlation as I'm sure there are many other variables in play. :) I'm not trying to dismiss it, only throw the theory into question.
- a_c_s 12y ago
  This article is based on multiple studies done by people at Ivy League institutions. Trying to "throw the theory into question" with a few generalizations isn't contributing to intelligent discussion. HN is fast becoming Slashdot, where people only read headlines before diving into commenting.

s73v3r 12y ago

Your statement is completely dishonest. It is NOT a 75% tax. It is a 75% tax on income over 1MM Euros. HUGE difference. And your bit about simply cutting taxes is just not true. It has not shown to be true in any of the areas of the country where taxes were aggressively cut. In fact, in some of those places, like Kansas, things are worse than before, because the gains you claim would come never did, and they didn't have the income to be able to continue aid for things like education or food stamps.