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French presidential candidate Jean-Luc Mélenchon wants 100% tax on top salaries

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Jean-Luc Mélenchon: the poetry-loving pitbull galvanising the French elections
Angelique Chrisafis joins charismatic hard-left firebrand Jean-Luc Mélenchon on the presidential campaign trail

guardian.co.uk, Friday 6 April 2012 14.54 BST

Jean-Luc-M-lenchon-008.jpg


Jean-Luc Mélenchon delivers a campaign speech in Grigny, near Paris. Photograph: Bertrand Langlois/AFP/Getty Images

In a packed agricultural hanger in a rural town in central France, an enraptured crowd raised their fists and chanted: "Resistance! Resistance!" On stage, arms flung wide, sweat pouring down his face, stood the charismatic, hard-left firebrand hailed as the best orator of the presidential campaign. "The French Revolution of 1789 hasn't breathed its last!" roared Jean-Luc Mélenchon, the poetry-loving pitbull of anti-capitalism. "If Europe is a volcano, France is the crater of all European revolutions!"

Mixing brute rage with killer, comic one-liners about the French political class, Mélenchon whipped up the crowd with promises of a civic insurrection to crush aristocracy and privilege. Hundreds who could not fit into the hall stood freezing in the car-park watching a live feed on a video screen, waving red banners and tricolour flags. "Welcome to Mélenchon-mania," beamed a student at her first ever rally.

Mélenchon, a former Socialist minister, has emerged as the tub-thumping philosopher-leader of the radical left. His sharp rise in the polls has seen him hailed as the "great revelation" of the French presidential campaign. He has leapfrogged the extreme right's Marine Le Pen to become the "third man" in the presidential race behind Nicolas Sarkozy and François Hollande.

His ideas include a 100% fat-cat tax, where the state will confiscate any earnings over £300,000. He wants a return to full pensions for everyone from the age of 60, a 20% increase in the minimum wage, a cap on maximum salaries and the nationalisation of big energy companies. He says the US is the biggest international threat in the world.

His supporters say he is the great hope for a banker-bashing revolution that will transform the face of Europe and reinvent leftwing politics. His detractors say his promises would bankrupt France. Laurence Parisot, head of France's business-leaders's union, likened Mélenchon to the guillotine-happy revolutionaries of France's blood-soaked Reign of Terror.

Some say the Mélenchon frenzy is good for the left, boosting its overall score. Others who want the moderate Socialist Hollande to hang onto his lead over the rightwing Sarkozy warn that his firebrand promises risk splitting the leftwing vote in the crucial first round on 22 April.

I'm dangerous!

Crisscrossing France from open-air rally to campaign meeting, while taking out a loan to pay for more video screens for the overspill at his packed gatherings, Mélenchon let the Guardian travel with him. "I'm dangerous!" he growled by way of an introduction. "Dangerous for financial interests, and dangerous for the oligarchy in France and Europe."

Crushing fat cat pay is pretty simple, he explained. "Anything above €360,000, we take it all. The tax bracket will be 100%. People say to me, that's ideological. I say too right it is. It's a vision of society. Just as we won't allow poverty in our society, we won't allow the hyper-accumulation of riches. Money should not be accumulated but circulated, invested, spent for the common good."

Will rich people flee France, as his critics warn? "If they do, no problem. Bye bye," he smiled.

He reasons that if the top tier of French bosses left, their deputies would take over. Not to mention another Mélenchon proposal – now also taken up by Sarkozy himself – that any tax exile would have to pay the difference back to the French state. "So there's no point leaving, because we'll catch you. If they don't pay, we'll seize what they own.

"Look, we have to smash this prejudice that the rich are useful just because they're rich."

"Capitalist propaganda always managed to make people think the markets' interests were humanity's interests." For too long people have been made to feel that they were some kind of drain or problem for expecting free education, free healthcare or being able to stop working when they were old and spent."

Mélenchon, 60, a one-time Trotskyist and former teacher, spent 30 years in the Socialist party, where he served as a minister and was once the youngest ever senator. He quit in 2008, arguing the party wasn't properly leftwing. He founded his own radical left Parti de Gauche and is now running for president for a leftist coalition, the Front de Gauche. His coalition includes the once powerful Communist party, which scored less than 2% in the last presidential vote, and who behind Mélenchon are now hoping for a renaissance.

Part of his campaign success – he recently brought the Place de la Bastille in Paris to a stand-still by drawing a crowd of tens of thousands – is rage at the financial crisis, but also his pantomime charm as a rabid attack dog against the French political elite, media and powers that be. In his trademark red tie, his explosive performances in TV debates and virulent jibes at his arch-nemesis Le Pen have become the stuff of campaign legend. Fighting Le Pen for the working class and protest vote, he has called her "a bat", "half-demented" and a "dark presence" likened to Dracula. Last autumn he also accused Hollande of being a "pedal boat captain", which has been the longest running gag of the presidential campaign so far. Sarkozy has used Mélenchon's charisma as a stick to beat what he calls a "bland" Hollande.

Mélenchon, the man who defends the proletariat, is sitting in a first-class train carriage, chewing strawberry sweets. He sees no contradiction in travelling in comfort, saying he earns a decent wage as an MEP, doesn't own a car, avoids flying. Even if he has got a Paris flat and a house in the country, he says he has simple tastes. "I don't have much imagination for spending money."

He says just because a politician earns a comfortable wage doesn't mean they should shut their eyes to the "ocean of misery in the world". "I don't pretend to be anything other than what I am – an intellectual with a good income. But I've chosen my camp."

He lampoons the Socialist party for not breaking with capitalism and instead falling for "the illusion that there could be a good capitalism". He says that just as state communism has collapsed, social democracy has collapsed — the death-knell was Greece's prime minister George Papandreou, head of the Socialist International "who was attacked by international finance and didn't last an hour".

Mélenchon says his Parti de Gauche has emerged "at a time of renaissance and reorganisation of the progressive camp on the ruins of social democracy and state communism".

He says he likes a good "fight". He was famously at the centre of the French left's bloodiest internal war, the 2005 referendum on the European constitution. From inside the Socialist party, Mélenchon championed the no vote, against Hollande and the party leadership.

France voted no and Mélenchon regrets that the political class swept aside a result it didn't want to hear. "That's a scar that has never healed. In democracy it's very dangerous to take people for imbeciles. They aren't."

Economic liberalism

His detractors say he is Franco-centric and anti-European. As an MEP, he disagrees, saying he's pro-Europe and pro-euro – "we can't have a European minimum wage without it" – but against the domination of Europe by economic liberalism and the free market. He lampoons the EU's fiscal treaty on budget austerity, which he would scrap, and "which will end in economic disaster because the whole of Europe will go into recession, including Germany".

But the principle danger is the world today is the US. "The Americans don't have a good press in our country and I take it upon myself to lead the scepticism that their behaviour elicits." He says the US is in "a crisis of hegemony", and that "their currency is sick and they're trying to defend it by every means possible, keeping it as a world reserve currency that allows them to live off the rest of the world's credit".

He adds: "The US's only comparative advantage today is its military. It's dangerous because it's a wounded beast." He would take France out of Nato.


Mélenchon's critics have called him a "little Chávez a la française", saying he's a friend of Castro's Cuba or favours China over the Tibet struggle. He brushes this aside, saying Tibet "is used as a pretext to put permanent pressure on Beijing, which reacts like the authoritarian government that it is". Of the Dalai Lama, he says: "I'm hostile to theocracy. I don't agree with religion in politics." But he adds: "I've never been a partisan of violence against anyone."

Mélenchon's supporters are expected to transfer to Hollande en masse in the second round run-off vote, as the broad French left wants above all to eject Sarkozy. Mélenchon claims he is not seeking a seat in a leftwing government in exchange for negotiations over support. But Sarkozy likes to raise the spectre of the moderate Hollande "held hostage" to Mélenchon's hard-left ideas.

Meanwhile, Mélenchon has no intention of toning down his campaign or his anger. "You can't present a programme like mine with the face of a sweet little boy taking his first communion," he says. And then his train arrives at the next rally destination.

"Onward, friends!" he cries to his team as they step onto the platform.
http://www.guardian.co.uk/world/2012/apr/06/jean-luc-melenchon-campaign-interview

toulouse.jpg

Front de Gauche rally with Jean-Luc Mélenchon in the city of Toulouse on April 5

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Rally at the Place de la Bastille, Paris, on March 18
 
Holy shit. Baloney idea, but I'd love to see it happen just as a social experiment. The economics student in me would have so much new research to look through.
 

kswiston

Member
I am all for heavily taxing income past a certain amount, but 100% is silly. Companies will find loopholes around that cap that will yield even less taxes. You will just see more extravagant benfits/perks packages.
 

Tuck

Member
How can they take 100% of someone's earnings? They'd have nothing to live on.

I must be misunderstanding. Can someone clarify?
 

Funky Papa

FUNK-Y-PPA-4
Holy shit. Baloney idea, but I'd love to see it happen just as a social experiment. The economics student in me would have so much new research to look through.

Ditto.

While I don't share his ideas, I have to wonder if pandering to the top 1% and bending our laws at their whims is a better solution.

How can they take 100% of someone's earnings? They'd have nothing to live on.

I must be misunderstanding. Can someone clarify?

Crushing fat cat pay is pretty simple, he explained. "Anything above €360,000, we take it all. The tax bracket will be 100%. People say to me, that's ideological. I say too right it is. It's a vision of society. Just as we won't allow poverty in our society, we won't allow the hyper-accumulation of riches. Money should not be accumulated but circulated, invested, spent for the common good."
 
How can they take 100% of someone's earnings? They'd have nothing to live on.

I must be misunderstanding. Can someone clarify?

If you read the article, it says that the tax would be imposed on anything above 360,000. Meaning, if you make 400,000, that extra 40,000 would be fully taxed, leaving you with 360,000 (to be taxed at whatever rate it is). So making 360,000 (minus its appropriate tax) the maximum earning for an individual in one year.

The charts and graphs you would make would be glorious.

Mapping the flight of money would be especially interesting.
 

Guevara

Member
How can they take 100% of someone's earnings? They'd have nothing to live on.

I must be misunderstanding. Can someone clarify?

You, like most people, don't understand how progressive income taxes work. Euros 0-299,999.99 are not taxed at 100%, they would be taxed at a lower rate.

Euros 300,000 and up would be taxed at 100%. Only income over the 300,000 limit would be taxed at the highest rate (in this case 100%).
 

Shameless

Banned
Communism is alive and well I see.

The people that earn that sort of money are incredibly talented people. They'll just leave France.
 
Isn't this a stance of a few gaffers?

Meh, what's the worst that could happen...
I think that to the end of reducing wealth inequality, confiscatory levels of taxation can be a useful thing. There used to be brackets in the US tax system that reached up to 90%, so the idea is not without precedent in American history. I don't know that France, which already has a fairly ample welfare state, is in the sort of condition that makes this necessary (Gini: .327), and I think I'd probably set the bar for that level of taxation at a higher level. I don't think France has the kind of outsize executive compensation problem that we have in the U.S. either, which is the other argument for levels of taxation that are that high. But the idea is not in and of itself unreasonable.

edit: Seriously? Did you people not take high school economics?
 

Zzoram

Member
I can't imagine he's going to get any big donors for his election campaign, and all the businesses and rich people will ads against him and donate buckets of money to his opponents.



Is this guy even polling well? Does he have a chance to win? If not, this isn't news.



I think 100% tax at $300,000 is too harsh, maybe 90% tax at everything over $500,000 would be reasonable, and then peg the threshold dollar amount to the rate of inflation.
 
How can they take 100% of someone's earnings? They'd have nothing to live on.

I must be misunderstanding. Can someone clarify?

It's the way bracketed tax systems work.

For the FIRST: 1-10,000 you make, they take 10%
For the NEXT: 10,000-50,000 you make, they take 20% of THAT
For the NEXT: 50,000-300,000 you make, they take 40% of THAT
For anything above 300,000, they just keep it all in crazy town.
 

Xdrive05

Member
See, this is an actual disincentive for people to move upward. Unlike the bullshit alleged disincentive wingnuts say happens in a progressive bracketed system like the U.S.

This idea is stupid in real life.
 
Holy shit. Baloney idea, but I'd love to see it happen just as a social experiment. The economics student in me would have so much new research to look through.

You would see a lot of western European countries welcome these new immigrants with open arms, specifically in the UK, Switzerland, and Germany.
 
How can they take 100% of someone's earnings? They'd have nothing to live on.

I must be misunderstanding. Can someone clarify?
I think what he meant is that they'd tax every income above a certain sum, so that it'd be impossible for anyone to earn more than X every month. As the article said:

the state will confiscate any earnings over £300,000

Edit: beaten, beaten, beaten
 

Shameless

Banned
It's a pointless thing to do.

The amount of people that earn over 300k is very low which means no money is raised for the economy. All it's going to do is discourage success and the most talented people will leave your country.
 

PBY

Banned
There are potentially normative arguments that could be made in support of this- but in reality, this is the worst idea ever.
 

bounchfx

Member
instead of the government taking the additional money I'd rather see it be given to the employees of the businesses or invested right back into the business.
 
Is this guy even polling well?
Yes, considering the Communist party was considered dead after the previous elections (less than 2% of the votes in 2007 and less than 4% in 2002).

Does he have a chance to win?
Not really, but he has a good shot at finishing third. Also François Hollande needs Mélenchon's votes if he wants to be elected on the second round and he will have to ally with him for the legislative election, which is to take place in June, right after the presidential election.
 

Guevara

Member
Ask for 100%, "settle" for 70% or more.

The top tax rate was 90% for much of the most productive years in U.S. history. Did the wealthy leave the U.S. for lower tax climates? Did it hurt our prosperity?

We live in a time of historically bargain-basement tax rates, which ultimately shifts the burden to the middle and lower classes.

toprate_historical.gif
 

Hari Seldon

Member
I don't know how it is in France, but in the US that would only really hurt like surgeons, athletes, and actors. Now if capital gains was capped that would be a big deal.
 
Ask for 100%, "settle" for 70% or more.

The top tax rate was 90% for much of the most productive years in U.S. history. Did the wealthy leave the U.S. for lower tax climates? Did it hurt our prosperity?

We live in a time of historically bargain-basement tax rates, which ultimately shifts the burden to the middle and lower classes.

toprate_historical.gif

Maybe if the poors didn't want so much, they'd be able to afford to pay their taxes. After all, who do they have to thank for their jobs?
 

Cookie18

Member
To put this in perspective here (England) the government just scrapped a 50% rate of tax for earnings of over £150k per year. This is because the people earning that and the companies paying it found loopholes so they didn't have to pay it. This arguably resulted in the government getting less as a result of the higher tax rate. There was also the fear that the people earning that kind of money would just leave the country because of it.

I suppose we'll welcome all the rich French guys if this nut ever got voted in.
 

Hari Seldon

Member
Ask for 100%, "settle" for 70% or more.

The top tax rate was 90% for much of the most productive years in U.S. history. Did the wealthy leave the U.S. for lower tax climates? Did it hurt our prosperity?

We live in a time of historically bargain-basement tax rates, which ultimately shifts the burden to the middle and lower classes.

That chart should only be shown if you also show what percentage of the population was subject to the top rate.
 

Magni

Member
Mélenchon's rise during this election (after Montebourg's rise during the Socialist primary) scares me.

How he (and MLP) are polling above Bayrou deeply saddens me.
 

Clegg

Member
On paper, this is an interesting idea.

However, in real life it will only cause the wealthy to flee the country for low tax havens.

Would be good for Luxembourg though.
 
See, this is an actual disincentive for people to move upward. Unlike the bullshit alleged disincentive wingnuts say happens in a progressive bracketed system like the U.S.

This idea is stupid in real life.

Well to be honest it's a little more complicated than that. We know from a variety of sociology and economic papers that people looking to 'move upwards' normally don't envision an extremely high wage. And once they've reached a vp level to warrant such a pay, their skills aren't much more valuable to the economy than the skills of some of their juniors.

Meaning that if they chose to leave their job for another company in another country, then there's a very good chance they wouldn't find as good of a job or pay, because job openings for 300K+ salaries are few and the skills required for those jobs are widely available, and the people that usually get those jobs are those that have been bred within the organization.

So incentives are diminishing in sensitivity at higher wage rates simply because the job market has a pryamid structure.

This might affect investments in the economy, but loopholes to get around high taxes already exist for the wealthy, and I don't see this putting a kibosh on that.
 

Zophar

Member
I think this could be brilliant. The key is his desire to see people invest and recirculate that money. Taxing at 100% above a certain level is your incentive to donate to charity, put your money into investments, etc.

If you make 500k and you're afraid the the government is gonna swipe all that, you dump the remaining 140k over the cap into investments- your money is going to something good, is still directly beneficial to yourself, and everyone wins. No disincentive, unless you're a greedy asshole that just likes to sit on cash.
 
Jean-Luc Mélenchon has what France needs. Sarkozy and Hollande do not
Sarkozy has only made France more unequal, but there is a progressive presidential candidate who hasn't fallen for austerity

Mark Weisbrot
guardian.co.uk, Tuesday 10 April 2012 12.28 BST

Jean-Luc Mélenchon 'seems to be the only one in the race that understands the real economic choices faced by France and the eurozone.'

France's conservative president, Nicolas Sarkozy, ran for office in 2007 on a programme of making the French economy more like that of the United States. He picked a bad time for that: the US was on the brink of its worst recession since the Great Depression, and would help drag down Europe and much of the world economy as the American economy collapsed. He probably wouldn't want to say these things today, after the US has had four years with hardly any economic growth at all.

But Sarkozy did succeed in making the French economy more like the US in some ways. After being one of the few high-income countries that didn't have an increase in inequality from the mid-1980s to the mid-2000s, France has become more unequal since Sarkozy was elected. For example, the ratio of the income of people in the 99th percentile (near the top) to the first percentile (at the bottom) went from 11.8 to 16.2. Other measures of inequality have also increased significantly (the Gini coefficient rose from 26.6 to 29.9). This happened from 2007 to 2010; it is probably worse today. By raising the retirement age – a wholly unnecessary change that drew enormous opposition and protests – Sarkozy also helped to make France even more unequal.

The comparison between France and the US is a good one, because the two countries have about the same level of productivity, or output per hour. This means that they have the economic capacity to enjoy about the same living standards. The French have chosen to take their productivity gains in the form of shorter work hours, longer vacations, universal healthcare, free college education and childcare, and a more equal distribution on income. By contrast, in the US more than 60% of the income gains of the past three decades have gone to the richest 1%. Poverty is now back to the rates of the late 1960s; college tuition costs have soared, we have no legally mandated paid holidays or vacations, and 52 million Americans remain without health insurance (although this could be reduced in the coming years, depending partly on the supreme court).


Most French citizens like their economic security and shared prosperity. So it may seem odd that someone with Sarkozy's programme could have been elected in the first place, and have a chance to win re-election. But this is largely due to popular misunderstanding of the most important economic issues, aided and abetted by flawed media coverage. As in 2007, the conventional wisdom is that France is living beyond its means, and Sarkozy now warns that France could be the next Greece and face economic meltdown if he is not re-elected. He pledges to balance France's national budget by 2016.

Unfortunately his Socialist party rival, Francois Hollande, pledges to balance the budget by 2017. Of course there are some important differences between the two, but if either candidate were to implement a fiscal austerity programme of this magnitude while the French and European economies are this weak, it is almost certain that unemployment and other economic and social problems will worsen. And France will lose some its important economic and social achievements.

Fortunately France has a more progressive alternative: Jean-Luc Mélenchon, backed by the Left Front. He seems to be the only one in the race that understands the real economic choices faced by France and the eurozone. France does not need austerity – that would be its best chance of actually ending up like Greece. Mélenchon proposes instead that the European Central Bank do its job and make loans to France and other European governments at 1%, as it does for the banks. France's interest burden on its debt is already quite reasonable, at about 2.4% of GDP; so if it can keep borrowing costs low it can grow its way out of its current problems, creating employment and increasing incomes in the process. That is sensible macroeconomic policy.

Mélenchon also wants to reduce work hours and raise the minimum wage, and increase taxes on the rich. He rejects the balanced-budget nonsense – as even most economists in the US do – and also the European Central Bank's lack of commitment to full employment. This also makes economic sense, especially in a time of recession when the ECB can create money (the US Federal Reserve has created $2.3tr since 2008) without fear of excess inflation.

In the French elections, the top two finishers go to a second round if, as appears likely, neither gets a majority in the first round on 22 April. Mélenchon is currently polling about 15% of the vote, but would probably be even higher if not for the fear that he could push the Socialist party out of the second round of the election. That happened in 2002, when the far-right, anti-immigrant candidate took second place. But there is no significant chance of a repeat this year; Marine Le Pen is polling at just 13%. So it would seem that anyone who wants to preserve French living standards and way of life should cast their vote for Mélenchon.

Compared with the US, it is much easier for a third party candidate in France to have a significant influence even without winning. Hollande has already moved left to capture the Left Front's voters, and Mélenchon will have the bargaining chip of his endorsement for the second round. With the two big parties committed to economic policies that will lower French living standards for the majority – in 2007 it was just Sarkozy who made this commitment – it's hard to think of a more appropriate time to vote "outside the box".
http://www.guardian.co.uk/commentisfree/2012/apr/10/jean-luc-melenchon-france-elections
 
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