After five years of service from President Nicolas Sarkozy, a leader who sought to reduce government controls of the economy and to stimulate private enterprise, French voters tossed him aside last May in favor of a presidential candidate who was nominated jointly by both the French Socialist Party, and France’s “Radical Left Party.” Francois Hollande campaigned with a set of 60 propositions - referred to as his “manifesto” – which included raising taxes on corporations; raising taxes on banks; raising taxes on “rich” individuals; lowering the official retirement age back down to age 60 from 62; hiring 60,000 new government school teachers; and establishing government subsidized “youth jobs programs” in regions of high unemployment (does any of this sound familiar?).
Today, many French citizens seem horrified that – shock! – President Hollande is doing precisely what he pledged to do. “The situation is very serious” noted Laurence Parisot, head of France’s largest labor union MEDEF in an interview with the London Telegraph. “Some business leaders are in a state of quasi-panic” he claimed, as the Telegraph reported that “France is sliding into a grave economic crisis and risks a full-blown ‘hurricane’ as investors flee rocketing tax rates.”
Within his first six months in office, French President Hollande managed to raise national capital gains taxes from 34.5% to 62.2%, and now the French people are freaking-out. Juxtapose that with the hatred that American Golfer Phil Mickelson experienced when he acknowledged last month that, between federal and California state income taxes, he’s having “62, or 63%” of his earnings taken away each year, and the reality-check is even more striking.
In short, the French apparently now believe that this level of taxation is a dangerous and destructive thing. In America, however, “rich guy” Phil Mickelson is a dangerous and destructive thing.
And consider this: Laurence Parisot, a major, national labor union leader (arguably a counterpart of Teamsters leader James P. Hoffa here in the U.S.) is upset because a Socialist President is taking more money from “the rich” and re-distributing it to others via government employment programs. Such policies would seem like a dream come true for the AFL-CIO, yet the union leader in France seems to understand that the “rich” in his country play a vital role in other people’s livelihoods, and simply seizing more of their money is harmful for everybody – even unionized workers.
The backlash that the Socialist President is enduring suggests that maybe the citizenry is waking up and facing reality. But are Americans facing economic reality yet?
We observed in the so-called “fiscal cliff negotiations” that President Obama’s political abilities to raise income and capital gains taxes are limited. And the suffering among lower and middle income Americans from the infliction of higher payroll taxes, and Obamacare taxes and penalties is so real that last week, even the New York Times had to report on it.
Let’s hope that Steve Forbes is right – that this is not our “new normal;” that we will reject politicians who are vicious with society’s wealth creators. It may, however, have to get much worse in America, before we embrace reality.
Austin Hill is an Author, Consultant, and Host of "Austin Hill's Big World of Small Business," a syndicated talk show about small business ownership and entrepreneurship. He is Co-Author of the new release "The Virtues Of Capitalism: A Moral Case For Free Markets." , Author of "White House Confidential: The Little Book Of Weird Presidential History," and a frequent guest host for Washington, DC's 105.9 WMAL Talk Radio.