Facing growing budget deficits and an aging population, the French government recently announced a plan to finance its citizens' golden years: the retirement age will rise from 60 to 62 by 2018, and taxes on high incomes and investment interest will go up. While raising the retirement age makes sense, burdening the rich with additional taxes does not. In fact, doing so will threaten France’s long-term prosperity.
France’s top earners already pay the most burdensome taxes in the world—the Solidarity Wealth Tax, the General Social Contribution, the Contribution to the Repayment of the Social Debt, the higher brackets of France’s progressive income tax, the value-added tax on consumption, taxes on inheritances and gifts, capital-gains taxes, corporate taxes, and more besides—along with their own social-security contributions. Why, then, should France tax this group even more heavily?
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