What we can learn from France

Opinion: Perhaps the rich in NZ should be more like the rich in France, who want to pay more tax. Yes, more

26th Aug 11, 3:39pm by John Pagani

By John Pagani*

France has had a higher standard of living than us since about, oooo, the 70s or 80s. They have more holidays, work shorter hours, make more money, retire earlier, own much more of the world's intellectual property as a proportion of their GDP, their cheese tastes better, their lamb tastes better, and they have a better national anthem. Plus, they got rid of the monarchy 222 years ago.

So we've got some catching up to do.

Maybe one way they have created a pleasant country in which to live is their talented and fortunate people ask themselves what they can contribute instead of what they can grab for themselves.

People like the lady who owns L'Oreal, and the chaps who run Total, Societe-Generale and Air France are calling for more income tax and more capital gains taxes on the wealthy.

"We, presidents or company leaders, businessmen and women, bankers, professionals and wealthy citizens, would like an 'exceptional contribution' imposed on the most fortunate French taxpayers.

"We are aware that we have fully benefited from the French model and European environment to which we are attached and that we want to help preserve them. This contribution is not a solution in itself: it should be part of a more global effort of reforms affecting [public] spending as well as [tax] revenues.

"At a time when the public finances deficit and the prospect of a worsening state debt threaten the future of France and Europe, and when the government is asking everyone to show their solidarity, it seems necessary for us to contribute to this."

If any business leader said something like this in New Zealand they would be tarred and feathered, which is another reason, in the ever-lengthening list - why our country is poor.

Cast your mind back as far as yesterday - to the wailing and gnashing of teeth following the Supreme Court decision on tax avoidance, and compare.

====================

* John Pagani is an independent political consultant and writer who has worked as an adviser to Labour Leader Phil Goff. He writes his own blog at Posterous.

We welcome your comments below. If you are not already registered, please register to comment

Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.

15 Comments

by Alex Tarrant | 26th Aug 11, 3:41pm 1314330117

FYI all, former ACT MP, and National Party candidate Stephen Franks is coming aboard to blog from the right from next week. Have a few more names being thrown around too.

Cheers

Alex

by andyh | 26th Aug 11, 4:16pm 1314332168

If he is as stimulating as that chap you recently recruited who blogs from the Left then that will be a real showstopper!

I can barely contain my anticipation.

by Gummy Bear Hero | 27th Aug 11, 1:15am 1314364509

Bob Jones would be the real show-stopper ! ... give the great one a call , Alex .

by Wolly | 26th Aug 11, 4:35pm 1314333308

I am quite happy for Pagani to hand over more tax....let's make it a socialist movement shall we...then Bill can use the extra loot to pay for the bloated state sector built by Helen....and all the Paganis can live happily ever after.

by Eagle | 26th Aug 11, 4:54pm 1314334482

Its one thing to visit France as a tourist but another to live and work there. I lived in France for several years and they taxed the socks off me. Their taxes kill innovation and entrepreural business. All it does, along with the socialist controls that always accompany such, is lower productivity, destroy the incentive to create and turns a large percentage of the population into parasites living off the ones that try. The situation becomes unsustainable, as we are now seeing throughout Europe, including France.

by Wolly | 26th Aug 11, 5:12pm 1314335521

True points Eagle...what Pagani fails to mention is the stonkingly massive mountain of govt debt in France where the biggest of the big banks are govt banks and they are trillions in debt....another revolution approaches..socialist heads will roll.

by John Pagani | 27th Aug 11, 8:25am 1314390300

Well I have lived there for a couple of years.

I am always surprised at what New Zealanders assume about productivity and innovation in France.

Take for example this article: http://online.wsj.com/ad/article/france-productivity

"According to the International Labour Organization (ILO), France is ranked just after the U.S. and Norway for hourly labor productivity, calculated by dividing gross domestic product by the number of hours worked. This calculation works to France’s disadvantage though, as Norway’s GDP is inflated by oil revenue, which isn’t entirely the fruit of a person’s labor.

"Germany and Sweden, which are both well below France for hourly productivity, along with Singapore, which is lower still, don’t even bear comparison, while productivity in Europe’s “cheap” destination, Romania, is a full 80% lower."

And thr suggestion that innovation there is 'killed' is simply wrong: http://www.invest-in-france.org/Medias/Publications/150/Innovation_UK.pdf

France has one of the world's most innovative economies.

by Wolly | 27th Aug 11, 9:05am 1314392700

"one of the world's most innovative economies".....really!

France and Its Major Problems

Posted by DHH under Politics and World Affairs

" France has many serious problems. I believe that foremost among these are their government’s socialist policies and the long-term effects of their colonial exploits in French-Algeria.

During the Socialist era, a number of policies were implemented, one of which was the heavy social security tax (about 42% paid for by employers on each employee salary). This tax was used to “reward” the unemployed and the middle class with generous social benefits. True, a government has to look after its people, but unfortunately, these benefits are not only too generous that the government and people’s taxes are hard-put to sustain them, but also these benefits have been exploited by the champagne socialists (the gauche caviar).

So you find the French are better paid to do nothing, because starting salaries are less than what the government gives to the unemployed. You will find the French going on strikes and demonstrating against any adverse reforms on these benefits. Ultimately, the working class are the losers because jobs are few and ill-paid, employers being constrained with financial and government limitations. There is an uncommonly high unemployment in France.

The other issue is the immigrant problem. Algeria was a French colony, and like most colonialists, the French took advantage of the natural resources of the country and treated its citizens as inferiors. The French government improved Algeria’s infrastructure and implemented modernising changes, but what the French government did and what the French as people did in Algeria were two different matters.

The French people exploited the Algerians, alienating them. Algerians rebelled, began to clamour for independence and set up the FLN, the National Liberation Front. When de Gaulle proposed a referendum, asking Algeria if they wanted independence, the colonialists French who were against independence, set up the OAS, a terrorist organisation whose objectives not only included a hostile stance towards Algerians, but also to bring down the French government. The brutality of this organisation which involved the slaughter of Algeria’s civil population, is unprecedented.

Many Algerians fled across the Mediterranean sea to France. They constitute the largest immigrant class in the country. Many of them were granted French citizenship, but they are stigmatised all the same. And like the French lower social class, they also take advantage of the benefits of socialist policies. They are resented for this even more.

It would take a very complex solution to solve these two issues. The French have a penchant for paralysing infrastructure by going on strikes. If labour syndicates were limited in certain capacities from doing this, then socialist policies can finally be reworked on. This will require a firm hand, and absolutely necessary to unspoil a spoiled class of people. But we do not wish for a government dominated by the rich, but neither do we wish a government shackled by the poor.

There is a law against racism in France, but however overt this is, racism is widely practised. Education could be the key for both sides. Algerians must be taught to adapt to French culture. The French must learn to be more understanding of their plight.

Oh, if it were only as effortless as it sounds…"

————

To extraordinary circumstances we must apply extraordinary remedies.

– Napoleon Bonaparte

http://yawandmog.wordpress.com/2008/02/14/france-and-its-major-problems/

by Elley | 26th Aug 11, 5:40pm 1314337205

Well, I'm French and although it would be nice, I am a bit dubious about the part saying "their talented and fortunate people ask themselves what they can contribute instead of what they can grab for themselves". There is a huge entitlement culture (if you think NZ has a big welfare policy, think again) and I doubt that the majority of wealthy people are that much keener than foreigners to contribute more than they already do.

By the way, there is already something called Solidarity Tax on Wealth (http://en.wikipedia.org/wiki/Solidarity_tax_on_wealth). If the article is to be believed, it hasn't been very effective as a tax. And I completely agree with Eagle above "Their taxes kill innovation and entrepreural business etc". Although it's not just the taxes but the huge bureaucracy that makes it really hard to do anything. A couple of years ago, a new status called "auto-entrepreneur" was made official. That was basically the French discovering self-employment and making entrepreneurship less complex and therefore slightly more possible.

Just a couple of corrections: NZ lamb does taste better and the French do work much longer hours. The practice is very far from the theoretical 35 hours/week and working in the UK and NZ has felt like being on holiday in comparison.

by Sheep Shagger | 27th Aug 11, 4:08pm 1314418132

Elley,thanks for correcting this outrageous slur on NZ lamb :)

by Ralph | 26th Aug 11, 5:21pm 1314336094

Shrug.

Their government pension scheme is massively unfunded, their four biggest banks are leveraged at between 22 - 50 to 1, they have a major racial problem and curent GDP is negative.

Our Pinot's are world class, our streets are cleaner and their rugby team losses against us 73% of the time. They can keep their anthem.

Also, being such an old country it's not much to say they own more intellectual property than a young country like NZ.

by David B | 26th Aug 11, 10:25pm 1314354345

But I still wish New Zealanders could cook like the French and that we had more French-like food. Not that we are bad, but they are better.

by Gummy Bear Hero | 26th Aug 11, 11:07pm 1314356860

DB : The finest food Gummy has feasted on has come from countries whose names all start with the letter " I " : India / Italy / Ireland / Israel / and Iraq ( still miss those breakfast fry ups at Lincoln College , Hazim ! ) ....... not being a fan of roll mops , I deliberately left Iceland out .

by David B | 27th Aug 11, 4:45pm 1314420302

Ireland, Gummy, are you for real? What do they know about food other than a 101 ways to boil a potato?

by Chris Carter | 28th Aug 11, 8:43am 1314477797

Simpletons bash one economic philosophy while promoting another, even though all of them can be -- and always are -- warped and abused.