Yes, that’s why I use the word “bracket” since the 75% in France applied only to the part of the salary above 1 million EUR. The thing is that the actual money collected from that portion was pretty small and declined significantly from one year to the next. This huge decline is probably due to different factors including people choosing to work less, people moving out of France, and tax avoidance. The choosing to work less factor is a big one, since the fact that if they take 40% or 75% of your salary above that threshold is a big thing (since most of the people paying the tax are the ones who are just a big above the threshold).

Another thing that I did not go into in the article is that the tax scared off many investors. Some decided to close off their business, some decided not to invest in France at all. That’s why the total amount of tax collected from all the taxes combined was significantly less than predicted. You always have to take a systemic view to these types of things and there are many indirect effects to any one action, with the indirect effect of the 75% tax in France was that it lowered overall investment in the economy. And the PM who said that high taxes kill taxes was no right-winger, but a card-carrying member of the Socialist Party.

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Peter is extremely curious and wants to know how everything works. He blogs at Renaissance Man Journal (http://gainweightjournal.com/).

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