{"id":57,"date":"2012-07-09T22:21:00","date_gmt":"2012-07-09T22:21:00","guid":{"rendered":"http:\/\/www.wallstreetandkstreet.com\/?p=57"},"modified":"2012-08-22T18:44:38","modified_gmt":"2012-08-22T18:44:38","slug":"seven-new-reasons-not-to-create-jobs-in-france","status":"publish","type":"post","link":"https:\/\/www.wallstreetandkstreet.com\/?p=57","title":{"rendered":"Seven New Reasons not to Create Jobs in France"},"content":{"rendered":"<p>If you wonder what tax changes Barack Obama would have made in 2009 if the U.S. had a parliamentary form of government, take a look at what Francois Holland is doing in France.\u00a0 According to the <strong>Financial Times<\/strong>:<\/p>\n<ul>\n<li>E2.3 billion will be raised via a one-off increase in the \u201cwealth tax\u201d on those with wealth of more than E1.3 million.<\/li>\n<li>75% marginal tax rate on incomes over E1 million.<\/li>\n<li>An increase in the inheritance and gift tax<\/li>\n<li>A E2.9 billion rise in the tax on business, including higher taxes on oil companies and banks<\/li>\n<li>3% tax on company dividends<\/li>\n<li>Higher tax on bonuses and stock options.<\/li>\n<li>Rise in the transaction tax, from 0.1% to 0.2%, on French equities with market caps over $1 billion.<\/li>\n<\/ul>\n<p>In France government spending claims 56% of GDP (second highest in Europe behind Denmark), and the unemployment rate is 10%.\u00a0 Supposedly these tax hikes will ensure that France reaches its budget deficit target for this year of 4.5% of GDP.<\/p>\n<p><strong>Our prediction:<\/strong>\u00a0 The tax hikes will not generate the expected revenue because \u00a0job\u00a0 creators will decamp to more capitalistic climes (Switzerland, the UK,\u00a0 the US and Canada).\u00a0 Economic growth in France will be even slower than expected and the budget deficit larger.\u00a0\u00a0 Most of these tax hikes reduce the return on investment, so fewer investments will be made in France and fewer jobs will be created<\/p>\n<p><strong>Why it matters:<\/strong>\u00a0 \u00a0\u00a0President Holland supposedly favors \u201cgrowth\u201d over \u201causterity,\u201d but in reality he is pursing policies that will stifle growth.\u00a0\u00a0 The situation is similar in Spain, Italy, and Greece, which in various ways are failing to make the pro-growth, pro-market \u201cstructural\u201d reforms needed to accelerate economic growth.\u00a0 Employers are deeply demoralized\u2014tangled in red tape and burdened by high taxes.\u00a0 This reality tends to be overlooked because structural reforms are complex, incremental, and localized.\u00a0 The media prefers to focus on high-profile, market-moving decisions \u00a0regarding monetary policy, bank recapitalization, fiscal policy and the like.<\/p>\n<p>But in the end it\u2019s all about growth, not financial engineering.\u00a0 Nothing is more important than liberating the European private sector in order to reignite growth\u2014the key to keeping banks solvent and reducing, or at least restraining, sovereign debt-to-GDP ratios.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>If you wonder what tax changes Barack Obama would have made in 2009 if the U.S. had a parliamentary form of government, take a look at what Francois Holland is doing in France.\u00a0 According to the Financial Times: E2.3 billion &hellip; <a href=\"https:\/\/www.wallstreetandkstreet.com\/?p=57\">Continue reading <span class=\"meta-nav\">&rarr;<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[19,20,18],"class_list":["post-57","post","type-post","status-publish","format-standard","hentry","category-uncategorized","tag-europe","tag-taxes","tag-unemployment"],"_links":{"self":[{"href":"https:\/\/www.wallstreetandkstreet.com\/index.php?rest_route=\/wp\/v2\/posts\/57","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.wallstreetandkstreet.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.wallstreetandkstreet.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.wallstreetandkstreet.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.wallstreetandkstreet.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=57"}],"version-history":[{"count":3,"href":"https:\/\/www.wallstreetandkstreet.com\/index.php?rest_route=\/wp\/v2\/posts\/57\/revisions"}],"predecessor-version":[{"id":271,"href":"https:\/\/www.wallstreetandkstreet.com\/index.php?rest_route=\/wp\/v2\/posts\/57\/revisions\/271"}],"wp:attachment":[{"href":"https:\/\/www.wallstreetandkstreet.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=57"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.wallstreetandkstreet.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=57"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.wallstreetandkstreet.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=57"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}