By Matt Salisbury
An election promise made at the cost of Subsidiarity is disturbing.
I’m not exactly a Francophile, but my wife and I had a blast in Paris last year. The Louvre was pretty swell. I even speak a little of the language. I dunno. I like crepes.
And yet the French are insane.
They elected Francois Hollande as their newest Great Leader. I’ll be the first to admit my limited knowledge of what the guy’s all about – remember, the road I took led away from international relations as I mentioned before. So I went to the Internet, hoping to learn more about the jolly Socialist. The first thing I read shocked me.
Seventy-Five Percent. That’s the tax rate Mister Hollande wants to impose on all his countrymen who make more than 1 Million Euro ($1.3M) per year. This new tax rate, the highest in Europe, means top-tier earners will literally be handing three dollars over to the government out of every four they make. Their longevity as top-tier earners will probably be in question.
There’s a great piece over at NPR that sheds a fascinating, terrifying light on this issue of The Seventy-Five Percent. Sophie Pedder, Paris Bureau Chief for The Economist, says:
“Well, it's quite interesting because he's been very clear that he doesn't expect to raise almost any revenue at all from the tax rate. He says what he wants to do is impose a sort of morality on high earners and on what he calls indecent wages. So he's really trying to kind of curve, I suppose, excess…”
Pedder goes on to note that “probably no more than about 3,000 or so French households” would be affected. So there isn’t much money being raised and it's not affecting many people. Do French voters care? Of course they do. Again, from Pedder:
“I think it's been incredibly popular. And if I look back over this campaign, I think that it really marked the moment when he sort of touched French hearts about what he was really trying to do. There were polls that were taken immediately after his announcement, which suggested that the majority of the French thought it was a good idea.”
How do we decide how much of a paycheck is too much? Is it government’s job to punish top earners by literally forcing them down to parity with enormous tax burdens (and I do mean enormous)? Honestly, this question interests me. I’ll be the first one to fight egregious disparity of wealth. I can’t believe that a CEO is really working 10,000+ times harder than the guy who mops all his floors.
But I have a problem with a 75% tax rate on someone whose only crime is the luxury of a high paycheck.
And this brings us to Subsidiarity. In my mind, pay that’s too disparate should be addressed where the pain is: at the company or community level. As our Catholic Catechism tells us:
1885 The principle of subsidiarity is opposed to all forms of collectivism. It sets limits for state intervention.
And in the words of Pius XI:
“It is a fundamental principle of social philosophy, fixed and unchangeable, that one should not withdraw from individuals and commit to the community what they can accomplish by their own enterprise and industry.” (Quadragesimo Anno, 79)
Now, I realize that this doesn’t always work. But I’d still argue that the problem ought to be addressed at the local level, and preferably through non-governmental channels. Appealing to the entire State’s figurehead (or his own appeal to the people) might make for good election year politicking, but doesn’t do the right sort of good.
The key seems to be balance, married with correctly ordered enforcement.
But, seriously, seventy-five percent. God bless America.
CORRECTION: The 75% tax rate applies only to actual income above 1M euro. The standard tax rates apply to income under 1M. I apologize for my poor wording.
Many thanks to Thibaud, a helpful combox Frenchman.