The French tax debate

As presidential candidates Nicolas Sarkozy and Francois Hollande swing into high gear, the tax issue has returned once more to the public eye.

The Washington Post reports that both candidates have made some pretty serious promises–Hollande, a Socialist, has promised to impose a 75 per cent income tax on everyone who earns more than one million euros a year. Sarkozy, for his part, has promised to make all French nationals living abroad pay sky-high taxes or lose their citizenship:

“Fiscal specialists point out that both measures were political gestures, designed to win votes by flattering traditional resentment of the wealthy among France’s working class. Because they would hit few people, the specialists said, neither measure would substantially reduce the colossal French government debt that helped push Europe into a dangerous yearlong financial crisis from which it only now is emerging.

Despite the depths of that crisis, the question of whether to raise taxes is intruding only modestly in European politics, usually with populist pitches such as those made by Hollande and Sarkozy. The terms of the debate make for a sharp contrast with the United States, where President Obama and his Republican rivals spar regularly over whether to let taxes rise modestly for the very wealthy or to cut them further — and over how much to rely on spending cuts as part of the equation to trim deficits.”

What do you think? Which country is managing its crushing debt better? Will the candidates make good on their promises?

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