In what can only be described as a catastrophic faux pas, France is facing a $14 billion shortfall in tax revenue. Despite the fact Hollande raised both personal and corporate income taxes, tax revenue fell well short of the predicted $30 billion the increased taxes were expected to raise. The French Court of Auditors said that the projection was so far off that it could not be certain that this year’s forecast would also not fall far short of what was expected. French unemployment hit a record high of 11% at the end of 2013 and for the first three months of 2014, the economy had zero growth. The top income tax rate was raised to 75% for the highest wage earners causing some of France’s wealthiest citizens to leave the country for greener pastures. Actor Gerard Depardieu, who was very vocal about the proposed tax increase, left France. Hollande, despite an approval rating of under 20%, has said that he will not change course, “France cannot live with such heavy debt”.
Unfortunately for President Hollande he is making the same mistake that so many other liberals make. You can’t tax your way out of a recession or out of debt. And you can’t tax people to the point where they either a) have no disposable income necessary to help any economy thrive and b) leave the country and take their tax dollars with them. The way for an economy to thrive is by a balance of fiscal responsibility and incentives that drive innovation. When you try to fix an economy by taking other people’s money all you do is kill initiative. When will fiscal liberals finally understand that you can’t save an economy by taking from givers to give to the takers. Why would I work hard to succeed if the result will be the government robbing the fruits of my initiative and labor. It’s a failed model! Yes, a government must provide assistance to those who truly need it but it can’t not be solely responsible for taking care of people. That’s why families and communities exist, to help each other. There simply isn’t enough money for that no matter how much you tax the rich. Why not simply print money and pay for whatever it is the government deems necessary? Hollande’s policies are irresponsible and will throw France further into debt unless he does an immediate about-face and offers business leaders and average citizens incentives that will aid in driving the economy forward.