Let's hope our own U.S. politicans of both parties are paying close attention to Europe in general and France in particular.
France Raises Taxes in Tough Budget tells the developing what-would-be-silly-if-not-so-sad story:"
"PARIS—-The French Socialist government on Friday unveiled the country's toughest budget in decades, hiking taxes for the rich and big business in a bid to slash its deficit while facing a stalled economy.
President François Hollande, in his first budget since being elected five months ago, has pledged to balance public accounts by the end of his mandate in 2017 and given himself two years to turn around the French economy.
"We're asking the wealthiest taxpayers to make an effort," Prime Minister Jean-Marc Ayrault said after the weekly cabinet meeting. "As for companies, we're bringing back justice. CAC-40 firms pay less taxes than small companies…now we're asking them to contribute."
The budget increased the top marginal income-tax rate to 45% from 41%, and detailed plans for a special tax on incomes above €1 million ($1.29 million) a year, with 1,500 individuals paying an overall rate of 75%. They will pay on average €140,000 more in taxes next year, the government said.
The biggest new tax-take from business will come from limiting the deduction of financial charges from a company's taxable income. Now, businesses can deduct financial charges from their declared taxable income, a measure the government said benefits large companies and encourages debt financing over capital. Limiting the possible deduction to 85% of a company's financial charges will increase tax intake by €4 billion in 2013, the finance ministry said.
The budget comes at a difficult time for the euro zone's second-largest economy after growth ground to a halt in the final quarter of last year and failed to expand for the following nine months. Flagging growth has pushed unemployment above 10% this year. . . .
A spate of plant closures that started last summer . . . cutting hundreds of jobs, has seen the government's approval rate plunge. Mr. Hollande is counting on economic growth to pick up from next year, reaching 0.8% in 2013 and 2% a year after. . . .
"This all-tax budget doesn't bring a solution to our two main challenges: how to cut public expenditure and how to improve the competitiveness of our companies," Gilles Carrez, the conservative head of the National Assembly, said in a statement. . . .
Fresh figures published Friday showed the country's debt pile kept climbing, reaching 91% of gross domestic product in the second quarter of the year, up from 86.2% a year earlier. . . .
"If we don't put a stop to this, taxpayer money will keep paying for debt reimbursement," Mr. Ayrault said.
Slow to no growth will result in slow to no improvement in employment.
The only thing growing consistently will be the debt burden.