Sunday, December 28, 2014

Laughing in/at the French

Twitchy: "Gerard Depardieu was right! France scraps its 75% ‘super tax’"

Related - WashPost: "The Laffer Curve turns 40: the legacy of a controversial idea."


Mr. Warner, tear down this career! said...

President Ronald Reagan adopted the Laffer Curve message, telling Americans that when 70 to 80 cents of an extra dollar earned goes to the government, it’s understandable that people wonder: Why keep working? He recalled that as an actor in Hollywood, he would stop making movies in a given year once he hit Uncle Sam’s confiscatory tax rates.

Always beware when the words "Reagan" and "recall" appear in proximity. Reagan was a longtime contract player with Warner Brothers. He was paid a weekly salary regardless of how many movies he made. Warner Brothers cut him loose 15 years later and he scrounged for acting work, making 7 movies in 12 years. In some of those years he made zero movies, which was certainly one way to avoid Uncle Sam's confiscatory tax rates.

Reagan's ice-cold movie career is what led him to his association with General Electric, eventually hosting their TV anthology show, and moving into politics.

Eric said...

Somebody's been reading Rick Perlstein.

Mr. Wasserman, build up this career! said...

It's from the Lew Wasserman biography "The Last Mogul," written by Dennis MvDougal. Wasserman was a key behind-the-scenes figure in Reagan's rise. Before that, as president of the Screen Actors Guild, Reagan had granted waivers that helped make Wasserman rich.

Le grand rien said...

France’s 75% tax was always written to expire after two years. This spring, AMC will be “scrapping“ Mad Men.

While 75% ceilings are rarely a wise idea, the promised mass exodus of French citizens never happened. The tax did make it harder for some French companies to lure some executives from other countries for the two years, and it discouraged some forms of outside investment. In the end, the tiny, fractional reduction to France's budget deficit wasn't worth the attendant headaches, which have been political, not economic.

Because the tax was scheduled to lapse after two years, many highly-paid French workers had their 2013-14 salaries deferred or wink-wink "slashed" by their companies. There will be a lot of 180% bonus checks being issued this Thursday.

Eric said...

It's perhaps rare to see an economy minister criticize the tax his very government implemented.

Le grand rien said...

Perhaps, but that criticism wasn't made by France's economy minister, it was made by France's future economy minister. Candidate George H. W. Bush called candidate Reagan's proposals "voodoo economics" before he switched from opponent to partner.

The Yahoo article is a fine outline of how the tax caused political headaches far more than economic ones ("proposed"; "threatened"; "rewritten"; "affected only a small number"; "most companies were able to minimize or avoid the tax").