Grateful For High Taxes in France?

The grocery store by our home in La Rochelle

It's been a while since I've posted. We've been very busy with our company and I've been working other projects. On my Facebook page, I've made some comments about French health care, in particular referencing this post about cancer treatment in France. Once again, I received private messages from people talking about taxes in France, so let's talk about them after we explore a bit what this means.


The highest marginal income tax rate in France is 45% (though there's an idiotic temporary 75% tax on millionaires), but you have to be earning over $200,000 US to reach that point. Most people pay far lower.  In fact, while well-off people will pay higher taxes in France, lower-income French households will enjoy lower tax rates than in the US.

That being said, it's still worth noting that the US used to have much higher income tax rates and the economy boomed. And while one study of 65 years of data fails to show conclusive evidence that raising or lower taxes necessarily hurts or helps GDP, it showed that it does impact income distribution, showing that lower taxes allows wealth to accumulate in the hands of the rich. In fact, the US now has the highest income inequality since the 1920s and the US now has more income inequality than any other industrialized nation.

This wouldn't matter if everything were fine and dandy, but it's not. Half of Americans now live in poverty and the actual unemployment rate is around 13%, much higher than the official 6.7% rate that's reported. And the large number of children going hungry in the US is growing. Student loan debt is growing and the number of US students enrolling in college has been dropping, a guaranteed long-term drag on economic growth.

So what does that mean? We know that income inequality is correlated with higher crime rates. (note: it's not poverty that leads to higher crime rates, it's the disparity). Income inequality leads to a breakdown in social trust.

And it's getting worse.

Here in France, I pay higher taxes and while we're also caught up in the world economic struggles, life here is still pretty good. So what do I get for paying my taxes?

• I'm never going to have to beg for my daughter's health care.
• My wife paid a little over €2,000 for her Master's degree in law.
• French political campaigns aren't paid for by businesses.
• Assistance to the unemployed is generous.
• French pensions are generous.

You know what? I'm OK with that. I'm OK with helping other people.

Yes, the French pay around 30% of their GDP for this, compared to 9.8% entitlement spending in the US (though these numbers are likely far from a fair comparisons). But you have to remember, the French people voted for this. This is a democracy. The French fight hard to protect their welfare state because they believe it's more fair and so far, the French have "hung in there" for a long time. France has some serious problems, but it's not going the route of Greece any time soon. When the overall world economy rebounds, France will too.

I'm happy to pay my taxes here. I often hear people in the US say they'd be happy to pay more if they knew they were really helping others. I'm putting my money where my bouche is.