Hacker News new | comments | show | ask | jobs | submit login
French President announces pro-business measures (rudebaguette.com)
129 points by waxzce 1630 days ago | hide | past | web | 152 comments | favorite



To me, the most important thing is that he's closing the "040" indicator used by the banks to index the entrepreneurs who previously failed.

It's virtually impossible to get help from a bank if your previous startup has failed. There's a bigger picture here. France is so incredibly intolerant of failure it's not funny. There's the rampant myth of the "genius superstar that never fails" and you only get one chance to prove yourself. It's no surprise that people will (generally, there are exceptions) prefer steady and safe employment in big corporations.

I think the best thing we can do for entrepreneurs is to encourage people to take risks and fail a few times. But this needs a major overhaul of the mentality in the country. I'm glad to see the government is taking a first step.


In the US -- we look at some of our most successful businesses and a ton of them had bankrupt companies in their past...

Ford (cars), Disney (media), Lincoln (president), Heinz (condiments), Hershey (candy), Twain (author), Fox (media) -- tons of others...


Great point - Unfortunately, it's endemic in European society that bankruptcy should be labelled as a permanent branding of failure for an entrepreneur. Until this year in Ireland, an adjudicated bankrupt could not apply for €630 credit without disclosing his status as a bankrupt (which could last for up to 12 years!)

I'd bet that the countries with the lowest barriers to exiting bankruptcy (eg 6 months in the US) also have the highest start-up success rates.

Bankruptcy laws are inversely proportionate to an innovative start-up ecosystem.

Getting rid of the '040' label is definitely a step in the right direction and I'm delighted to see that Hollande recognizes how important it is to remove this stigma.

On a side note, Liam Boogar, the editor of the Rude Baguette (source of this article) is an absolute gentleman who works tirelessly to better the fate of French start-ups. Keep up the great work!


I'd bet that the countries with the lowest barriers to exiting bankruptcy (eg 6 months in the US) also have the highest start-up success rates.

Perhaps, but someone is still footing the bill for those failures that were able to write off debts they couldn't afford, so I wouldn't be too quick to assume a very liberal culture with regard to bankruptcy is always better.

Remember, bankruptcy doesn't just mean a company failed to make money, it implies that the company ran out of money without even paying its debts. In this context, that usually means taking on a bigger loan than it could afford to repay.

If banks are going to lend more money to businesses run by people who make that mistake, they're probably going to be putting up interest rates on loans across the board to pay for it. That's going to hit other businesses that are borderline successful in their early days instead, possibly even killing them off before they become established and sustainable.

I know it's popular around places like SV and around HN to talk up failure like it's a badge of honour and guarantees you'll have valuable experience to learn from for next time, but a failure is still a failure. Even if most one-time failures shouldn't merit the end of someone's entrepreneurial career, banks should lend responsibly and be hesitant about lending to someone with track record of not repaying their debts.


This is really interesting, because it goes beyond just a label -- it is a social stigma. I am now going to have to find some books on the topic!


The flipside of that in anecdotally I've heard that companies that really /should/ die limp along from a long time and get more funding in the US. Is this true or just a myth?


The "zombie company" thing used to happen (in the late 90s), not so much anymore.

Now it seems we have gone to the other extreme, "fail fast" is the slogan of the day. Sometimes companies fail so fast they never get a chance to grow into a success or pivot.


> The flipside of that in anecdotally I've heard that companies that really /should/ die limp along from a long time and get more funding in the US. Is this true or just a myth?

Banks that get bailed out are companies that should have died.


I totally agree and I'm surprised by all the negative comments on this page. These measures seem to be going in the right direction:

1 - encouraging entrepreneurship by reducing the risk (no more bad credit score aka banning 040 code)

2 - increasing the reward through tax breaks on early capital gain.


Again, promises. And F. Hollande has not a good track records of keeping promises.


Maybe, but that's probably not the right forum for politics...


Exactly - consider flagging the article.


The article seems highly relevant regardsless if people can stay on topic.


You sum up everything. If you fear the failure, you can't be successful.

That's a french mentality issue (I'm french)

French people need to understand the learn from your failures concept


I'm French too and I totally disagree with this comment. We should stop old style cliché and be fair a bit. Things are changing there obviously.


Absolutely, things are changing.


When French entrepreneurs move to Berlin and London to work on their companies you know you have a problem.

France's capital gain taxes are a real issue, and even the new, changed and improved rates will not do much to counteract this.

And that's just one of the things working against French entrepreneurs, the various employment laws don't help a whole lot either.

It would be fair to class France as start-up hostile at the present date, but the situation is improving. Which gives me all the more respect for those French entrepreneurs that succeed.


> When entrepreneurs move to Berlin to work on their companies

I'd say you have a real problem if that happens. Germany is pretty entrepreneur unfriendly (source: I'm an entrepreneur in Germany) and if your country is even worse ... well.


I think what started the startup scene in Berlin was largely low rents and an exciting city more than if it's entrepreneur friendly. On the other hand a lot of entrepreneur seem to complain just out of inexperience in business.


Huh, I've heard only good things about the startup scene in Berlin. What are some of the main issues from your perspective, if you don't mind elaborating?


Insiders only need apply. The over-regulation does nothing but protect the existing players and stifling start-up competition across dozens of industries.


That is swell and everything. But why doesn't the president fix his crazy tax scheme, first. The pigeons have already left the roost and now he's set his aim further down the tax bracket.

Apologies, I just received a letter saying I owe the impots an additional 400€. For reasons I can't imagine since my salary hasn't appreciated that much. Entrepreneurship is hard enough already, the government taking more money doesn't make it any easier no matter how many visas they grant.


Back taxes has very little to do with the system and very much to do with your employers bookkeeping?


I've been with my employer for 6 years and have never had a problem such as this. I also pay my taxes in monthly instalments that is predetermined by the fonctionnaires.


In the US, I've noticed following the instructions on the W-2 to pick your deductions (and set how much of your check is taken in taxes) does not give the correct amount with some employers. I am not sure if its software or just poor accounting. I started just putting 0 and calling it a day.

good luck with yours


the Impots are really nice and competent. the few times I got some issues with them, a mail solved the issue. really nice and polite.

URSSAF or RSI on the other hand...


French startups. Bunch of pissy little whiners. They cry when nothing is done to help them, cry louder when something is done to help them. And the same people who spend so much energy bashing any government, left or right, cry like babies to get any state subsidies for their failed ideas. And they dare call themselves entrepreneurs. I wonder how do so many foreigners succeed to start their business in this country.


Easy to see: despite all the whiners and the bad reputation, you can find good people to work with in France.


This is phenomenal news for France! After having married a French woman, lived in France and subsequently we moved back to the U.S., I realized how far behind France was in the entrepreneurial game when compared to the States. Yet, there are really brilliant people in France! These measures are definitely a step forward. I will be interested to see if they speak about it on Le Grand Journal this evening. Once we have children, we have thought about moving back to France because the education system is so good but, we have been very pessimistic about doing so because entrepreneurship is so looked down upon.

Unfortunately, I don’t think Hollande’s efforts are going to have too great an effect long-term. My experience has indicated that the French system is set up in such a way as to reward people who don’t take any risks. It is not simply the banking system or taxes that is to blame. There is a cultural stigma against taking risks that does not exist in the States. The education system is at least 100x better than the best schools in America, yet good test score count for very little when it comes to the hustle required in entrepreneurship, much less web based entrepreneurship where everyone is brilliant and hard working. There is simply not the same commitment to innovation. I often felt that I had made a faux pas when I lived in France and spoke about different business ideas at dinner or a party.

Unfortunately, politics is not the only problem holding the many brilliant people in France back from innovating and changing the world. In France, it is not culturally acceptable to want to be like Elon Musk.


+1 my wife is French too and we are also contemplating moving back when our kids are school age. The big risk is the business climate but more and more I'm feeling excited about going to France and helping change the culture in small ways. Just like the French chefs who came to the US and turned our culinary world upside down, us based tech entrepreneurs can introduce some of what made the valley so successful. France is such an amazing culture. Glad to see that Hollande is taking steps to make it easy to fail and succeed.


Agreed. That is the frustrating part. The education system is so great and their health system is incredible. I really liked living in Paris. It is without a doubt the most beautiful city that I have ever lived in. Plus, I absolutely love the French language.

We are sort of in the same position. We would like to head out to Silicon Valley get some experience there and then move back to France and become involved in entrepreneurship in Paris while our children would finish high school and go to university.


Lots and lots of good things: more stable tax rules, reinforcing and stabilizing the JEI (which is a HUGE win, since it was changed every year...), right to fail, startup visa.

Also, creating incentive for big companies to work with startups is awesome. The bigcorp/startup link is almost non-existent here (compared to the US for instance). This one alone will help the ecosystem big time.


From a french guy : We are so late on this. imo, it's just an adjustment compare to other country (like US).

There is also a lot to do to change the mentality, because the crowd don't believe in "entrepreneurship" and prefer to work directly in big company.


from a Indian guy, planning on coming to France for Higher Studies: France is sprinting now, when others are exhausted (USA, UK, China, India).. France is where it is right now.


France is not sprinting. No amount of measures will change the main issue we have in France : the people.

I am French myself, moved to Canada 6years ago, then moved to London a year and half ago. I have kept a very close eye on France, I tried to find jobs there, interesting jobs, but it is just not happening, there are so many hurdles it's not even funny, just to list a few : salaries are way off compared to places like London or Berlin, Paris is expensive and being pretty much the only place to find "startups" you become locked with a small salary and high expenses, it is elitist as hell, unless you have an engineering degree, good luck finding a decent job, and even if you find one, it'll take years before you move up or get a raise. The list could go on and on, but it is clear to any frenchman/woman who decided to move away that any amount of measures will not change the culture, a culture of elitism which doesn't leave room for talent.

I'll add that there are decent jobs in France, but there are scarce and the fight for them is high. You are more likely to end up working for Peugeot, AXA or some big corp like that. If you want a future in tech, avoid France, that place will never rise to the challenge.


If you read it right, I'm going there for studies, not job. France, is working hard on its higher studies, if any government is serious, I as a investor, would leverage on that.


The studies really are top notch, at very competitive prices. There are hidden gems around, like Toulouse School of Economics.

Generally, in every french university, you can really learn stuff, have a good core curriculum - and even do that at a discount price if you shop around or know how to play the game.

Your decision to study in France is wise. Make the most of it. I just recommend you reevaluate where to start your business when the times come, because of the opportunity costs.

I'm french, and if things had been different (or in the future) I'd consider starting my business in India :-)


Actually, Toulousse, is where I want to go..


Email me. I'll be happy to give a hand.


I'd like to know your sources, and wear your rosy glasses. As a French student, I'll leave the country at the first occasion. We are heading into a big, thick wall and we'll lose more than the pigeons when we go bankrupt.


If everyone saw that side window opening at the same time, the term 'pioneer' would not have been coined.


Making generalizations is not my thing but I know two things.

1) A crisis and less jobs means more and more young people here are just saying "fuck it, let's startup my own business".

2) Some French startups have done great and became global players in the last couple years, like Criteo, and there are plenty new and fast growing companies that are recruiting talent not only in France but from all over Europe.

I should know, I work for one such company, it's called Pretty Simple, and its hit social game of investigation is in the top 5 Facebook games. And we're recruiting like crazy (jobs@prettysimplegames.com), from iOS devs to game artists to game designers. We have self-taught people as well as engineers. We're nothing like the outside cliche of France would have you believe, and we're kicking ass with an international team that speaks English interchangeably with French.

Also, Paris is one hell of a cool city to live in, we've got good food, good parties, good benefits, and good people, and living here is not that expensive either when compared to London or the Valley.


Sorry, I should have been clearer. I'm a aspiring entrepreneur, and yes, I want higher education if possible from select people in france, but I don't want to stay in France, or any western country right now.

India's Purchasing power is 3rd highest in the world, yet its actual GDP is only 7-8th largest. India, is where I would be, but not right now. Not for post graduation, quality education is something hard to find, due to such intense competition in India, your chances of getting into a IIM, is lower, compared to getting struck by a truck.


Not expensive compared to London, really? I live in London, it is expensive, but the salaries are better here, more than compensating for the cost of living.


Maybe you should get some first hand experience there first before making such grand statements. France is in fairly deep trouble in spite of nominally getting out of the current recession early (in part because of a massive increase of public debt), it's Southern neighbor Spain (and major trading partner) is doing (much) worse.

There are a lot of people working hard to try to solve this but to say that France is 'sprinting' where the USA, UK, China and India are 'exhausted' is showing a serious lack in knowledge about the state of affairs.


During depression, opportunities exist.


A collapse offers even better opportunities!


Not sure about France, but your claim about China and India being exhausted is laughable to say at the least.

India is 'The' place to be in this century. With a relatively young free market economy, and a negligible competition space in the start up market. You can practically do anything you want and achieve in India currently.

Don't simply blindly believe the place you want to go to is the best, rather research properly- find the best place and go there.


Yes, India is place to be, in longer run, thats why I'm planning to stay here. But France is a short term opportunity, as long as this government is taking stuff seriously.

As a student entrepreneur, I find India a lot harder than France.


That's a view I totally share - except for the government being serious. I have my thing with Hollande. It's the first good thing I've heard him say.

But certainly, if you can grab an opportunity, run with it.


This is an interesting point of view and that it’s not the first time I’ve heard it (especially from indian students who were wondering if they’ve made the good choice coming in the UK instead of France).

However the only trouble on those stories is they were describing France a bit too much like California.

That said many foreigners usually do see opportunities when locals are just blind.

So if there is any attractiveness to France seen by Indian people who believe they can leverage those opportunities, this should be welcomed and probably rewarded too.


Yes, its not a walk in the park. If you seek opportunity, even in desert, you would find riches. Its not a hunch, I have carefully compared, what I want, and what I would be getting there, at a particular university.


Maybe, but I'm not so sure. Why do you believe that ? (Examples, or whatever)


Well, Its the actual changes in law, like this particular article here today, 10 steps announced by the French Govt. Over last 1-2 years, France has been working pretty hard... on this, lot of opportunities to capitalise on. This year itself, I attended a tour-de-India, by cultural groups from France, it was a really big thing, a clear intent.

Its more like, you might know something is cool, before its cool. The same way, people would laugh at the overpriced education in US/UK, 20 years back in India..

we will see how it goes.. I know clearer than a day, that at the first opportunity, I'm going to France.


There are surely more Frenchmen settling in China right now than Chinese or Indians wanting to come and set up a business in France. I have no idea where you get impression it works the other way around.


> Frenchmen settling in China right now than Chinese or Indians wanting to come and set up a business in France

That's a pretty bold claim. Outside my window are quite a few chinese businesses. Not necessarily the YC-type though. Import/exports, textiles, restaurants, restaurant suppliers, etc. I'm sure for every frenchman that goes to China there are 100 Chinese coming here to start a small, family run enterprise.


or prefer not to work at all :) When you see Liberation glorifying people living on RSA...


Of course, it's a minority. I prefer to add this information for all the readers.


Yeah, because it's so easy and comfortable living on 650 euros/month...


Source ?


Ah that was not Liberation, but inrocks instead... but I may have read something similar in the Liberation since they are so very much in the same line of thought: http://www.lesinrocks.com/2010/09/26/actualite/ils-ont-decid...

For English speakers out there, the title means "they decided not to work anymore"

That's what you get for giving out welfare without setting any expectations to the person who gets it: people abusing the system.


Thanks. I don't think that article glorified anything though.


Well, when 95% of the article supports one idea and only the last 10 lines mention the potential issues with it, I call that very biased at the least.


The article says they can't afford proper food and have no social life...


That's because they can't find jobs or they chose not to work. Either way, who's to blame for this? Surely not the hard working wealthy. Oh wait....


It's more like they choose not work, most of the time, and live off society.


The visa thing is nice. Simplifying capital gains tax is awesome.

I can't say that I'm a big fan of the tax breaks though. We shouldn't subsidize any business, they should fail or succeed on their own merits.


> Simplifying capital gains tax is awesome.

It _would_ be, but that's the part I'm the least confident about. Simplifying goes against the DNA of both France and bureaucracy, so I don't expect much of French bureaucracy about this; I expect the ministère des finances to reintroduce at least as many byzantine rules as they're forced to abrogate.

The ministère is stuffed to the brim with [ENA alumni](http://en.wikipedia.org/wiki/%C3%89cole_nationale_dadministr...), i.e. people extremely well connected and well versed in stealth sabotaging of unwanted reforms. They've a strong track record of politically killing finance ministers who wanted to "simplify" them.

> We shouldn't subsidize any business, they should fail or succeed on their own merits.

Indeed, but big companies have an unfair advantage over small ones: they're able to influence regulation (especially if they can afford to hire ENA alumni). In a heavily regulation-prone country such as France, this advantage is so important that it stifles SMEs; some countermeasures are needed.


I believe there is something somehow similar in the US where a founder gets a 100% exclusion from tax (up to $10M per taxpayer) for “qualified small business stock” held for more than 5 years. I think this is still the case.


Agreed with "own merits" but that would be true is competition was local. Once you start compete with Delaware-based company, tax breaks can help and make it more fair.


It's a question of balance, if people want to see more new businesses to come around then it makes a lot of sense to lower the entry barrier.


So sorry about some French habits : many of bad comments are made by French... In fact, some French guy like French bashing, in public international place, but it doesn't sounds good for business isn't it ?

We have also great entrepreneur with great exits or great companies. And some of us are business ready and don't complain all the time. Such a shame nobody ear of them...


I remember hearing about France's 35-hour work-week (in the mid to late '90s I believe) and I'm curious if some of the Frenchmen here can tell us how eliminating that cap has affected the economy. Are people simply working more hours? Has unemployment gone up since a business needing X number of hours a week needs less workers? And most importantly, was that limiting the ability to create start-ups?


35 hours-week was set up during a time of (worldwide) growth and massive improvement of the unemployment rate. Discussing real effects of that law is doomed to an endless debate and heated arguments :)

Some facts :

- French are some of the most productive people in the world.

- Implementation of the law differs from company to company (35 hours, or additional day-off, or paid overtime).

- It's not uncommon for people to work longer unpaid hours.

- Salaries have stagnated (well, except for upper management and CEOs), which you can pin partly on that law.

- Unemployment is currently at an all time high, but it affects most of Europe.


I work in France and I'm still trying to wrap my head around the 35-hour rule. I've only worked PMEs (<50 empl.) so I don't know how big companies manage, once you get over 50 different rules kick in.

* General salaries are sort of trapped outside the big cities. You can work 35-hours but don't expect any pay raises. I think the avg salary is around 1500€/mo. I would say most people have built there lives around the 35-hour week and even though it's not an upper limit anymore I haven't noticed an uptick in working hours.

* There are so many things wrong in the French economy you can't really site a single source. Sluggish economy, automation, globalisation, all play a part. Do remember that after 35 hours that extra time is voluntary, as Apple is finding out. A smart manager wouldn't build a work schedule around 40 hours knowing the workers can legally walk off at 35.

* Startup culture was much harder in the past. Where would you live? No property owner would rent you a flat because you don't have a "real" job. Bankruptcy was devastating, that 040 code. And then you have the social charges. The government wanted you to pay your pension, insurance, and the other social charges, in advance. Imagine what it costs to create a startup? Now imagine having to pay an entire year of taxes before you can sign your first customer. And the other thing was bureaucracy, lots of it.

The government tried to make inroads on the tax charges by allowing them to be delayed for 2 years. And a lot of companies failed at 2 years for this reason.[1]

[1] this was told to me by a political activist friend.


Thanks for the information ... After working 60-80 hour weeks on the start-ups I've done, I just couldn't imagine how it would have been possible with the old laws.


You could, but that is a very big brass ring to put in front of your employees. If you are working that many hours there better be a good reason, like a big payday. Startups are different than PMEs because the only way you would even think about working 60+ hours is if you have some equity in the success of the company.

There are 2 ways the 35 hour week works:

1) You are paid for 35 hours/wk and work as much as you want all year long. December arrives and you go full RTT. You basically take a vacation while the company pays you the balance of those over 35 hour weeks. I've been in a few places where half the office is gone for the entire month of December, and sometimes November. If you don't use all your RTT by 31/12 you've basically worked for free.

2) Overtime. In my case my CDI (employee contract) is for 35 hours + 4 overtime hours that I've agreed to. Say the company only wants me to work 35hours/wk one month, too bad pay me 35+4. And if I go over 39 hours? RTT. Depending on the workplace, this can either get collegial or hostile very quickly.

Also, when it's 7-8 hours of work the french really do work those hours. This is in contrast to my American observation of working 6-7 and goofing off for 2-3. But then you're always having to stay late. This pacing requires proper project management, something that was really lacking in most of my american bosses (Americans tend to inherit the manager job, to go cadre in France you actually have to take courses on managing people).


And then there's the typical programmer under the SYNTEC union convention, who is paid for 37.5 hours/wk, with only 10 days off for RTT per year.

But in reality, we work the full 39/40 hours, because we're paid by the day, and there's much work do be done anyway. So, we're averaging 35 hours on paper, but more like 37.5 in reality.

I guess that's just something to keep in mind while negotiating the salary.


Every time I start a new contract or role in the UK, I need to sign a form waiving my rights to the 35 hour limit.


Some nice minor gestures, but these will hardly "redefine French business as we know it."


I have to check again, last time I called my lawyer, the tax on my income was 14% and the tax on an share sale would have been 42%, so I'm really in favor of having both at the same rate.


Bullshit! A french teacher can't learn entrepreneurship. Most of them have no idea what is a company and what is business!


but entrepreneur can do it :-)


Beside the "040" indicator everything else sounds like golden bullshit to me.


These measures are extremely favorable to entrepreneurship in France. They will help people to create companies, to develop them, and even to bounce back if they fail \o/


Yes, it's about as reassuring as the Treaty of Versailles.


Americans (and the Vulcans) have a saying:

  Only Nixon could go to China.


and #11, if you are successful, we take most of your money.


75% tax rate. He is a sociallist big time. He hates free market economy. Now confronting public outrage he puts some lipstick on a pig and it still doesn't look good as he doesn't get the markets.

75% tax rate, who is he kidding? Who wants to work for free for years on their startup and sacrifice their savings, their social life, sometimes their family, just to be hit by 75% tax at the end of the journey?

No thank you Hollande, but no thank you.


I like to say that, in Europe, we believe in a peculiar kind of social mobility. Social mobility ends in middle class. The old aristocracy has secured its benefits in special untouchable jurisdictions (Switzerland, luxembourg, lichnestein or dozens of capital havens), and is actively preventing anyone else from entering the club. What's worse, they don't even invest, preferring to spend on luxuries.


Of course that only applies to the salary over one million. As people earning that much usually have plenty of options to get their money through different channels, this is purely political posturing. They didn't even significantly increase tax revenue.

I agree that it is ridiculous but, in a similar way, it is ridiculous to claim that one rate makes France unfriendly for business.


Are marginal tax rates rare ? It alway seems like people don't understand how they work. But i don't see how you could do without them, there would be a strong incentive not to change bracket.


> Of course that only applies to the salary over one million.

Of course! So have a look at me: worked 8 years in IT and saved about 150,000 USD in that time period. I paid taxes on this, mind you. To save this amount I had to live on much lower standard of living that my peers. My wife and my kid too. I quit the job, I'm trying to run a startup. I have a child, a wife and expenses related to that. Instead of getting regular income as everybody else, I spend my savings (accumulated capital) to try create something of value for the public. I take risks. My family does too. We live on 40000 dollars a year or less. Because I'm putting everything into this business. 2 years and 80000 so far plus income I lost by not working in 8-5 job in these 2 years.

Let's say it works out. I sell the business after 3 years for 1,000,000 dollars. You are telling me that it is fine to take 750,000 from me and from my family? For all the risks I took? For all the hard work? For years of living below standard my family could have afforded but decided to take risk and save, and invest? So, you would like to see me with just 1/4 of this? And give 3/4 to people who didn't take any risks, didn't save, are living comfortably (better than me!)

I don't think you understand. France is history.


What don't you understand in "over one million" ?

If you sell it for 1,000,001 the 75% rate only applies to the extra 1. Not the whole 1,000,001 just the 1 that is over the million.

That's what is called a marginal taxe rate. Each tax braket only applies to the money within the backet range.

If you make 1,000,001 the first 6,000 are not taxed and the last one is taxed at 75%. (Or will be if we ever get that).

--

Edit : There also seems to be a concensus about selling not being taxed like a salary. I wouldn't know. But there was also quite a debate on whether the taxes on selling companies was to high.


True. But the first million is not tax free neither. If over 1,000,000 is 75% then I'd assume that below 1,000,000 isn't much better. I'd assume if I sell for 2,000,000 the total tax will be at least 50%. How is this fair?


It's fair because you're driving on roads, bring your children to school, may need to go to hospital at times, and profit from a judicial system able to enforce law and your company's contracts, among other things. If you want to live in a country without taxes, try Somalia, or Congo.


The debate is not between "taxes" and "no taxes." We're all clever enough to understand shades of gray.


No, in my experience there are no shades of gray. It's just "taxation is theft". There is no level of taxes, no matter how low in real terms, where people actually stop complaining.


It's not about complaining. It's about policies that make sense.

Look, I have saved for few years to have initial funding for my business. This means I had to take away from myself and my family. To save for future business. So, in that period of time, I had lower standard of living that my coworkers. Right? Maybe my daughter couldn't get the toys her friend. could. Maybe we couldn't go for a vacation in 5 years. Maybe we had to live is small apartment vs. a house. Drive car that's not really nice. All of this to save money to invest in future business. Once the money was saved, I quit the regular job. Now, it's even worse. I have no income at all. And still have to pay bills for the family + spend on the business.

The statistics are 1 in 10 startups make it. 10% chances. So after additional 2 years working on the startup and burning all the savings, let's say - 10% chance - it worked. I made it, I sold the business.

You are telling me to tax people like me at 50%. And how do you think now, why in France there is no Silicon Valley? Because nobody in their right mind is going to work their butt off to be taxed at the end at 50%. It just doesn't add up. It would be better for me to stay with a regular job if I were in France. And in the end that's bad for France. It makes it much less competitive, much less innovative, and scares prospect capital off its borders. California alone has bigger economy than France. But in California nobody will punish you with a tax at 50% for trying to be innovative. And California has good roads and sewage system too. Without extreme taxation and business unfriendly environment.


Marginal tax rates on the top earners (ie: the high-tech sector) are 46% here in Israel and we've got plenty of start-ups.

And yes, it's about policies that make sense for the economic constraints of the government and the values of the voters. Key words there being values of the voters. France might have a very state-driven economy, but most of the world's top economies certainly don't take the American neoliberal wannabe-anarcho-capitalist approach.


> Marginal tax rates on the top earners (ie: the high-tech >sector) are 46% here in Israel and we've got plenty of >start-ups.

And if the rate was 15% your guess is there would be even more start-ups or less? And if more, wouldn't that be more valuable for the Israeli economy than to give this 30% difference to politicians to waste?

>And yes, it's about policies that make sense for the >economic constraints of the government and the values of the >voters. Key words there being values of the voters.

Agree 100% here with you. However when people vote for something they rarely see the side-effects that quite often are much worse than the potential benefits. Like with cough medicine that gives you heart attack. People don't see things through at times. They'll vote for a politician who promises the most, understanding he'll go deeply in debt and not really caring that their children will have to pay it all off. Democracy gives the people great power, the problem is they don't want to accept responsibility for it. I have a great example here: In 1990s Democrats in the USA got this really good idea that all Americans should have a house. Even ones who couldn't afford it. What they did is they told the banks: look we (the Government) are going to guarantee all the mortgages. If you give a mortgage to someone and that person stops repaying it, the Government will buy the mortgage back using taxpayers money. And you know people voted for it. So all the folks who really weren't qualified got mortgages they couldn't afford. How markets work is that there is a balance between greed and fear. You're greedy to give someone a mortgage but afraid he will not repay. The Government took the fear part out of equation. Obviously the whole thing had to collapse. And in 2008 it did. And what caused that? Good intentions, socialism - let's give house to everyone. Now everyone's screwed over. And the funniest part is that now they blame bankers and capitalism for that. It was socialistic idea from the start.

>France might have a very state-driven economy, but most of >the world's top economies certainly don't take the American >neoliberal wannabe-anarcho-capitalist approach.

US is much more socialist they you could think. They talk the talk but don't walk the walk. Currently in the US there are more people who get Government benefits than those who pay the income tax. That's not capitalism. If you want to see capitalism look at China.


US is much more socialist they you could think. They talk the talk but don't walk the walk. Currently in the US there are more people who get Government benefits than those who pay the income tax. That's not capitalism. If you want to see capitalism look at China.

First: you're thinking of social-democracy, not socialism.

But honestly, using China as an argument in favor of capitalism is INCREDIBLY BAD. China looks pretty dystopian to outsiders.

And if the rate was 15% your guess is there would be even more start-ups or less? And if more, wouldn't that be more valuable for the Israeli economy than to give this 30% difference to politicians to waste?

If the rate was 15%, I would guess that there would be roughly the same amount of start-ups. Never has the real business world been shown to respond predominantly to income tax rates. Other factors have always dominated the issue of business formation: availability of skilled labor force, public R&D investment, available infrastructure, solid legal system, etc.

Good intentions, socialism - let's give house to everyone. Now everyone's screwed over.

Neither socialism nor social-democracy gives people loans. You're talking about some kind of weird American state-capitalist thingy. In a social democracy, there are what the Brits call "council houses": available houses or apartments literally owned by the local government and leased or given out based on human need.

Get your brain out of the America and into the sensible world.


China is capitalistic that's why so successful economically. Human rights, democracy, etc. - I agree - a total disaster. But when they talk about Greece being in debt, US being in debt, all these countries indebted through their noses, they never mention who the creditor is. China is. You see they can ignore the image they have as they are our creditors. We are at their will. And that's because despite all their flaws they embrace capitalism.

So, if the amount of startups would be the same why not to tax at 80% ? Would it still be the same?

I wouldn't start one with 45% tax rate, that's for sure. I agree I could start one if the chance of success were really good. I can take that. It's 45% tax, but I'm pretty sure it'll work out. But if you want to have a real risk-taking start-up creating a market - 45% will be a no-no. So that tax rate will force founders to look into easy solutions, not an innovative stuff that will change the world. That's why the really innovative things come out of the US because it still makes business sense to try starting them there. Google, MS, Facebook, Apple. These were all extremely high risk. No sense even approaching them with the Government cutting half of the potential reward when chances are 1 in 1000. 1 in 5 it may make sense. For my business now the rate is about 1 in 10. So, it wouldn't make sense with 45% going to the taxman. I'm sorry I wouldn't start my startup in Israel. Risk/reward ratio would be just too much against me. I'd rather sit with my ass in the comfortable office paying off mortgage.

Your council houses exist in the US too. They are called "projects" and are free housing for poor. Literally free: http://en.wikipedia.org/wiki/Public_housing#United_States

You see socialism in the US progressed so much that they are even one step in front of the Brits. After building all the Projects they decided to do even more "good" and started promising banks to repay poor's mortgages.


All very nice for you, but we've hit a core issue: you are now talking about your personal preferences for tax rates, rather than addressing the actual economic question regarding start-ups.

The economic question is: "At what level of taxation (both in terms of effective tax percentage and income level where it kicks in) do taxes become the largest factor preventing the formation of start-up companies?" We need to be talking about Big-O optimization: we should always solve first the problem that is largest and whose solution will cause the fewest new problems.

So, if the amount of startups would be the same why not to tax at 80% ? Would it still be the same?

See above. You are asking the wrong question: "Do we get more start-ups with a higher tax rate or a lower tax rate?" That assumes tax rates on high-income professionals (in Israel that 46% rate is for the top 10% of income-earners, the people earning the most income you can without owning a company) are the dominant factor in whether or not a start-up gets founded.

This assumption is ideologically based (in American anti-tax rhetoric) and almost definitely wrong. Why? It's obvious: a start-up founder running on savings and investment isn't actually bringing in enough new income to get hit with the top tax-rate! Think about it: if you're a founder getting your start-up going, in any country, do you burn your seed money to give yourself a salary in the top 10% of incomes, or do you forgo the larger personal income to keep more of the money in the business for a longer time? Obviously the latter.

So the tax rate on the rich and the upper-upper middle class is not the deciding factor. To pose a counterpoint: would you found a start-up in a country with a 10% income tax but no intellectual-property laws?


First of all, honestly, very nice talking to you. As a fiscal (not social!) conservative I enjoy discussions with more of a left-wing friends a lot! So, just wanted to say it's cool talking with you. Which doesn't mean I won't be trying to be badass bad dealing with your responses, lol.

>All very nice for you, but we've hit a core issue: you are >now talking about your personal preferences for tax rates, >rather than addressing the actual economic question >regarding start-ups. >The economic question is: "At what level of taxation (both >in terms of effective tax percentage and income level where >it kicks in) do taxes become the largest factor preventing> >the formation of start-up companies?" We need to be talking >about Big-O >optimization: we should always solve first the >problem that is largest and whose solution will cause the >fewest new problems.

That's not that difficult to answer that question really. Just look at the data. Where most of the successful start-ups that made it big come from? Start-ups that changed the world (innovation) or created whole new segments of the economy? Amazon, Ebay, Facebook, Microsoft, Apple, GitHub, Oracle, Intel, whatever. Where are they from? France? Israel? Japan? Australia? Canada? Russia? You know the answer. US. And as you pointed out yourself that is where the "anarcho-capitalism" (lol) is, so please connect the dots ;-) (no offense intended) Actually, the only start-up I can think of that made it big and is non-US based is Skype (based of the UK). You know any others in the IT that made it big and created a new market or changed the world or created whole new market segments and are not US-based?

I think that the business environment is important factor as well. If a country imposes 75% income tax on whoever/whatever it just tells you a whole lot about the public attitudes towards business and capital in that country. It is like a thermometer showing you have a fever. Once you see 39C degrees you know that's no good no matter what's the excuse. It's the same with the tax rate for the markets. 75% looks like very unfriendly place business-wise imposed no matter on whom and for what. This is why it scares off the capital. Because it shows that the general public treats businesses with suspicion. So maybe better to invest somewhere else.

>This assumption is ideologically based (in American anti-tax >rhetoric) and almost definitely wrong. Why? It's obvious: a >start-up founder running on savings and investment isn't >actually bringing in enough new income to get hit with the >top tax-rate! Think >about it: if you're a founder getting >your start-up going, in any country, do you burn your seed >money to give yourself a salary in the top 10% of incomes, >or do you forgo the larger personal income to keep more of >the money in the business for a longer >time? Obviously the >latter.

Obviously not. I work almost for free for many years for a prospect of a single huge payout at the end. If I sell my business for $1 million, I don't want half of it to be taken by the Government! Let me explain in more detail below.

Let' say I sell the business for $1M. Let's say the tax rate is 46%. So, after 2 years of work and investing $100k in it, I make the math: 1. My last job I made $150k a year. Two years equals $300k in lost income. 2. $100k invested from savings 3. Low quality of life for the family 4. $1,000,000 - $460,000 = $540,000 after taxes. (yes, I know it'll be less because rates are progressive, so let's say: $1,000,000 - $350,000 = $650,000) 5. $650,000 - $100k burnt savings - $300k lost income equals... yeah! I just made $250k profit! While the Government made $350k.

I invested years of my live, substandard living, and $100k in savings plus $300k in lost income. The Government invested nothing. Oh, actually it has been trying to make it as difficult for me as possible all the time because that what Governments do by design when they come in touch with any business: regulations, paperwork, imposing controls, etc. So, at the end: I made $250k. The Government made $350k. You call this fair because I could use roads and sewage system? Geeez, thanks!

Now look at these numbers again as they explain why you won't see Google or Amazon going out of France or Israel any time soon.

As I said in the previous post the tax scheme that you have in Israel works only with a short-term business plan that is a sure thing. Like an IT consultancy when I know that clients are there for sure. And they are there right now. So, I don't loose $300k in income and don't need $100k in savings to work on something without any income for another 2 years. I can start today and have income tomorrow. But that's NOT how innovation happens. I'm sorry. Innovation takes time and funding. Your taxation scheme kills it before it even has chance to happen.

>So the tax rate on the rich and the upper-upper middle class >is not the deciding factor. To pose a counterpoint: would >you found a start-up in a country with a 10% income tax but >no intellectual-property laws?

No. But I would in a country with comparatively low income tax and very strong intellectual property laws.


That's not that difficult to answer that question really. Just look at the data. Where most of the successful start-ups that made it big come from? Start-ups that changed the world (innovation) or created whole new segments of the economy? Amazon, Ebay, Facebook, Microsoft, Apple, GitHub, Oracle, Intel, whatever. Where are they from? France? Israel? Japan? Australia? Canada? Russia? You know the answer. US. And as you pointed out yourself that is where the "anarcho-capitalism" (lol) is, so please connect the dots ;-) (no offense intended) Actually, the only start-up I can think of that made it big and is non-US based is Skype (based of the UK). You know any others in the IT that made it big and created a new market or changed the world or created whole new market segments and are not US-based?

This is the kind of experimental design that would and should fail an undergrad experimental-design course. And I really mean that, I'm not trying to make an ideological point or condescend to you. This is really bad reasoning.

Not only have you jumped to claiming that Correlation Equals Causation, you're not even correlating tax rates (the variable you want to examine) with start-up success. You're correlating national headquarters with start-up success, and then claiming this says something about tax rates.

The fact that US tax rates have themselves varied over time and place is counterevidence against your claim! What does it mean to you if California-with-high-tax-rates produces as many start-ups as California-with-low-tax-rates? Or what does it say about California versus Texas versus New York versus Massachusetts? The actual evidence points towards Silicon Valley being special somehow rather than a general effect from tax rates.

There's also a huge issue with the phrasing, "Start-ups that changed the world (innovation) or created whole new segments of the economy?" To once again reference HPMoR, yes, only your start-ups are in this new reference category you've constructed to include only them by definition.

Let' say I sell the business for $1M. Let's say the tax rate is 46%. So, after 2 years of work and investing $100k in it, I make the math: 1. My last job I made $150k a year. Two years equals $300k in lost income. 2. $100k invested from savings 3. Low quality of life for the family 4. $1,000,000 - $460,000 = $540,000 after taxes. (yes, I know it'll be less because rates are progressive, so let's say: $1,000,000 - $350,000 = $650,000) 5. $650,000 - $100k burnt savings - $300k lost income equals... yeah! I just made $250k profit! While the Government made $350k.

Sheer nonsense. Merely probably opportunity cost is not on the actual accounting books; you could have lost your job the next year anyway. You made $550k and the government got $350k.

Besides, if you already made $150k/year, you're ridiculously fortunate and you have no valid claim to society's pity. You made 61% of the net profits after a 46% tax rate, and for a small start-up sale like $1,000,000 a profit to the founder of $550k is pretty freaking good.

Now look at these numbers again as they explain why you won't see Google or Amazon going out of France or Israel any time soon.

http://mappedinisrael.com/ -- Try and stop us.


>This is the kind of experimental design that would and >should fail an undergrad experimental-design course. And I >really mean that, I'm not trying to make an ideological > >point or condescend to you. This is really bad reasoning.

So, do you know any any IT companies that made it big and created a new market or changed the world or created whole new market segments and are not US-based? Or not? I'm sorry, but I could care less about you reasoning if it has no evidence based in reality.

>The fact that US tax rates have themselves varied over time >and place is counterevidence against your claim! What does >it mean to you if California-with-high-tax-rates produces as >many start-ups as California-with-low-tax-rates? Or what >does it say about California versus Texas versus New York >versus Massachusetts? The actual evidence points towards >Silicon Valley being special somehow rather than a general >effect from tax rates.

Of course Sillicon Valley is somehow special. The same way Los Angeles is somehow special that it is de facto movie and music industries capital of the world, New York is finance capital of the world, Las Vegas is gambling capital of the world, Chicago is commodities trading capital of the world, and some claim New York is fashion capital of the world (heard it from a Parisian fashion designer), etc. You see, once you have friendly business economic environment, all types of beautiful and creative kind of things will happen all over the place. Not only in IT. Again probably theoritcally or academically you can come up with some "evidence" to the contrary, but the simple truth is that if you are serious actor, you will move to LA, if you are serious software developer, you'll move to SF and if you are seriously into finance you'll move to New York. And this wasn't built on 50% or more tax rates my friend. You are serious or you're not serious. With tax rates like this it looks like you're not really serious.

>There's also a huge issue with the phrasing, "Start-ups that >changed the world (innovation) or created whole new segments >of the economy?" To once again reference HPMoR, yes, only >your start-ups are in this new reference category you've >constructed to include only them by definition.

Thank you for admitting that if you want to change the world, you have to move to the US and open company there.

>Sheer nonsense. Merely probably opportunity cost is not on >the actual accounting books; you could have lost your job >the next year anyway. You made $550k and the government got >$350k.

Lol, yeah, or I could win $10M in the lottery. And seriously: you had your classes at College, I had mine. You do add lost opportunity cost in your business plan.

>Besides, if you already made $150k/year, you're ridiculously >fortunate and you have no valid claim to society's pity. You >made 61% of the net profits after a 46% tax rate, and for a >small start-up sale like $1,000,000 a profit to the founder >of $550k is pretty freaking good.

It's not 550k. Deduct the opportunity cost. And then it's mere 250k. Now, add all years of saving, unhappy wife, etc. No, it's not worth it. And how came you don't address the fairness part of the whole thing. The Government is almost like a mafia here that provides nothing, or comes up with some kind of a BS like "sewage, roads" (mafia says that they provide "security services), you know it's BS. And then they take bigger part of the profits than me! Hahaha, I guess I would be really "fortunate" for me then :-). The Government doesn't deserve it. And still it's good in Israel. Now imagine France and me selling it for let's say $3m. The Government would collect 75% from each dollar above $1m. Fortunate me, huh. :-) I can pay 75% of my sweat to the mafia because I sweat all my life trying to do something great vs. sitting as a Government employee from 8 to 5 all my life. Yeah sure, penalize me. I'm sure it has no impact on enterprenuers decisions in France now, lol, Im sure ;-)

Another point is that leaving money with the people and not the government is better for the economy too.

Finally, fortune has nothing to do with it, but people who believe in socialism don't get it.

> http://mappedinisrael.com/ -- Try and stop us.

Your Government and attitudes like your do good job enough in that stopping department (sadly). A little bit like a cancer on overall healthy body of the nation. Quite to the contrary I wish Israeli IT Scene all the best. However, it would be difficult for them to cope with that type of Government and society believing as strongly is socialism as you do. I mean sure you can be a success story. But with this penalizing tax rate forget about creating something more than US-validated clone ideas for the local market. Because with that type of taxation nothing else probably makes sense.


Your willful self-delusion aids my cause, so I'm going to leave you to it.


As Schopenhauer famously noticed if you lack arguments start personal attacks on the discussant. No outside-US based good start-ups, no? No outside-US based strong movie industry, no? No outside-US based strong music industry, no? And list goes on and on.

Socialism works. For the capitalistic US and China it does! Because once you impose economic barriers on yourself they have much easier job competing with you. Hence why 'cancer'. Cells killing the body that hosts them.


I'm not making a personal attack; I'm pointing out that you're completely ignoring the real evidence put before you.

For instance, if Israeli start-ups suck so much, why do your vaunted American investors keep buying them?


Everyone drives on roads, takes their kids to school, and may need to go to the hospital at times. Some of us pay extra for private roads to be built and for private schools for our children to attend because the government equivalents are crap.

As the poster mentioned, if you are an entrepreneur, normally you forgo a steady salary and corporate benefits in order for a big payout later. When the government is going to take a huge chunk out of that payout when you've already been sacrificing hard just to get there - it begins to look less and less worth it.

I've spent my adult career going from startup to startup. Looking at the current regulatory and confiscatory tax environment, I don't know if I'd do the same starting over.

If I could go back 20 years, I'd probably just go work for a big company like IBM or UPS and stay there. If I'm noticing that pressure against entrepreneurs then others are noticing it too. The government is slowly but surely killing off drivers that increase risk taking.

That's a bad thing.


> As the poster mentioned, if you are an entrepreneur, normally you forgo a steady salary and corporate benefits in order for a big payout later.

Utter bullshit. I'm an entrepreneur, and you know why I was able to create a company? Because of the very good French unemployment benefits that allowed me to build up my business for nearly two years after my previous startup failed! Without that, lacking a personal fortune I just wouldn't have been able to create the company.


The 75% proposed tax is for earned salary not sales of shares. Thus it will only be relevant to you if you get your company to a point where you are taking out over 1 million euros a year in salary, not if you simply sell your company for over 1 million.


See for yourself : http://fr.wikipedia.org/wiki/Baremes_de_l_impot_sur_le_reven...

Now you may not understand french but the table is quite understandable. Fist column the brackets, last column the marginal taxe rate.


> I sell the business after 3 years for 1,000,000 dollars. You are telling me that it is fine to take 750,000 from me and from my family?

You're so very wrong.

1° the 75 % tax doesn't apply if you reinvest the money in a new company. There are several different ways to avoid paying the tax through investment. It's a tax on revenue, earnings, NOT capital. If you use your money as capital, basically you'll never pay more than about 35% taxes overall.

2° you don't understand how marginal tax rates work. You pay 75% of tax on everything ABOVE 1 million. So if you sell your company for 2 millions, the 75% applies on the second million but not the first one.


> I sell the business after 3 years for 1,000,000 dollars. [...]

I don't know about French taxation, but I don't think the sale of the business would be taxed as a million dollars of income.


If you sold the business, this would not be a salary - this would be a capital gains transaction.


The 75% tax only applies to salaries not if you sell your business and it's a marginal tax rate, if you earn 1,000,000 euros it doesn't apply to you.


Not feeding the troll, but the average tax for a company is ~36%.

75% is the income tax when you are very rich. (And it's still a project). now, the income tax is 50% for the rich people.


Also, the 75% is a marginal bracket. Only the money over the 1 million bar or whatever it is right now gets taxed that much. All the money you make up to 1 million faces lower percentages.


Well that's still far high enough even at 36%. There are several places more business-friendly around the world.


> There are several places more business-friendly around the world.

Sure. There are also several places with much worse infrastructure around the world. If you don’t want to pay taxes, go to Somalia.


What about places like UAE? The Dubai "Internet City"- Free Trade Zone offers absence of corporate and personal income taxes or customs duties, as well as free repatriation of capital and profit in any currency. I'd say, if you don't want to pay taxes, go to Dubai.


Wasn’t there a thread here recently how it took them until 2010 to build a second sewage plant and still have to haul their shit away in trucks?


FYI, after what happened in Cyprus (and may be repeated in malta), dozens of online businesses which were based there are moving to Dubai. Not sure how the schizoid behavior of Europeans authorities with regards to business is helping at all.


Because, err, Dubai is such an extremely democratic country where it is absolutely guaranteed that the government will jump in if you fail and where there is a large social security net in case your company goes bankrupt?

Really, Cyprus and Malta are not that different from Dubai, and neither is their business model. The difference is that Cyprus and Malta are part of a larger entity that guarantees certain things, such as human rights[0], reimbursement of up to 100k € if the bank goes bankrupt[1] and support for temporarily failing countries[2]. Oh, and the risk of Iran attacking Cyprus or Malta is surprisingly low as well.

[0] extradition to the US from the UK being one of the interesting things here.

[1] cf. the EU’s opposition to the Cypriot government’s original idea to just take n% from everybody.

[2] extra loans to Ireland, cheap money to Italy etc.pp.


Hey i'm not claiming it's a better place to live in. The point is, businesses are mobile nowadays and europe is doing everything it can to scare them away.


That certainly depends on the business, and given sufficient political interest, it is rather easy, especially for an economic area as large as Europe, to shut out external businesses exploiting tax loopholes or subsidies abroad.


Vanuatu is another good place. No income tax unless you're a landlord. They won a survey for happiest people in the world. The weather is great. Of course, they're a long way from anywhere, 80% are subsistence farmers, and some islands even still have actual cargo cults, but still, no tax, happy environment. Not much infrastructure, but hey, no taxes.


Or to Ireland, Estonia, Malta etc.


75% marginal on income over 1 million. So if you make 2 million, you probably only make, like 750,000 for yourself (which isn't too bad) - if your tax accountant is useless. And if you fail, you have a safety net.


Only on _salaries_ of over a million. Except for soccer superstars, nobody makes more than a million _in salary_.

He promised it for populist reasons, but never wanted to do it; so he does it in such a way that it affects virtually nobody.

It has a nasty effect, though: it reinforces the idea that wanting to become rich is somewhat antisocial in France, and ought to be punished. A 75% tax is what you levy on vice: oil, tobacco, alcohol or lottery. This is insulting and discouraging to entrepreneurs, many of whom crave social recognition at least as much as wealth.


75% tax rate is very common in Europe even for workers with average salary. There are many hidden taxes such as 'social security insurance payed by employer'.


A load of tosh. "Income tax rates in France" in google gives you them with ease.

http://en.wikipedia.org/wiki/Taxation_in_France#Taxes_on_inc...

In order to hit 40% income tax, you have to be a single on 70k or a nuclear family on 210k. Even if they have 20% VAT equivalent, that only works out to another 10% of what's left, leaving 50% as disposable income. And that's the highest tax bracket, and given that the average wage in France is supposedly ~30k euro, that's less than half the highest bracket cutoff.


As I wrote there is lot of hidden stuff such as taxes payed by employer plus social and health insurance. I don't care how it is called officially. It is calculated as percentage from income and one may go to jail for not paying it. There are also non-income taxes such as 60 percent VAT on petrol.

I am not French (Czech living in Ireland), so I dont know what is situation exactly, but I bet it is not much different. In Czech Republic I payed about 55% tax from my 1500 euro/month salary (bellow average for Prague).

From wiki you linked: > Taxes paid by employers on wages, namely social contributions, are not considered as taxes by the French central government.


>There are many hidden taxes such as 'social security insurance payed by employer'.

He's taking about hidden taxes such as this one, which is paid by the employer, so many French people I've talked to about it seem to think it's somehow magically not money out of their pocket.


You can see those as compulsory 401(k), health and disability insurance.


I doubt that it does in any EU country. In France it actually does not exceed 50% including VAT. (http://www.revolution-fiscale.fr/le-systeme-actuel/des-impot...)


or VAT (sales tax) in whereabouts of 20%.


If a 75% tax rate is being socialist big time, were the US communist back in the 50' ? Because they had tax rates up to 91% at the time. It's under 50% only since Reagan.

One source among others: http://www.beggarscanbechoosers.com/2011/09/america-prospere...


There is no 75% tax rate.


There is a reason for which there have been no big French or European company founded after WW2 (1945). The reason is called socialism. Think about it. BMW, Mercedes, Siemens, Loreal, Peugot, you name it! No Google from Europe, no Microsoft, no Oracle, or Tesla, or whatever. Not a single big company from the EU after 1945. Especially overregulated places like France.

I met a French clothes designer in New York recently. He told me he escaped Paris and France because he couldn't afford to open fashion house in Paris. He told me that just to open a fashion design shop in France he would need to pay 15,000 euros (about 20,000 USD) in fees in taxes to the Government. Just to obtain a few pieces of paper from the Government to be able to start the business. Just to open. No profit yet, doesn't know if it will work out or not, has no customers. Using his life savings or going into debt to start his own business and contribute to the society. Penalized to the point he said good bye. He escaped to the USA. Good job Hollande!


There is a reason for which there have been no big French or European company founded after WW2 (1945).

So, the following don't count?

Bouygues (http://en.wikipedia.org/wiki/Bouygues) founded in 1952. Large conglomerate with 130,000 employees world wide.

Capgemini (http://en.wikipedia.org/wiki/Capgemini) founded in 1967. One of the largest IT consulting firms in the world.

Carrefour (http://en.wikipedia.org/wiki/Carrefour) founded in 1958. It is the second largest retail group in the world.

JCDecaux (http://en.wikipedia.org/wiki/JCDecaux) founded in 1964. The largest outdoor advertising firm in the world.

Sodexo (http://en.wikipedia.org/wiki/Sodexo) founded in 1966. One of the largest food service companies in the world.

etc.


> Sodexo (http://en.wikipedia.org/wiki/Sodexo) founded in 1966. One of the largest food service companies in the world.

I now can blame the French for the spotty food service in my company.


I'm sorry, never heard of most of them. And still as socialism progressed less and less were able to grow really big as your own timeline indicates.

The companies from your list are not innovative enough too. They are not like Benz that was first cars manufacturer in the world. Or Microsoft that was the first software company in the world.

Yeah, they opened a few stores more than others, or are one of a bazillion successful IT consultancies.

That's not innovation. And innovation is this what requires friendly tax regimes and little to no regulation. That's why it's not happening in the EU.


The USA is a massive massive home market and has been since 1945. If you succeed in USA, then the past century has almost assured you will succeed globally.

Put in place that most of the big companies mentioned are huge successes mostly in IT - and the distortion becomes more obvious - IT plays homage to the network effect, the biggest home market in the world is the USA, so get yout IT play right there, you get it right everywhere.

When a home-grown IT company busts out of India or China (or rather out of Bangalore or Chengdu) then it will be time to blame overregulation.


Tesla is a big company? Bigger than Virgin? Pull the other one, it's got bells on. I'm not saying incorporation is not stupidly expensive in Europe, but lets keep it balanced.


And in the software field a little company called SAP AG and elsewhere in the technology field a little phone company called Vodafone.


Not to mention the giants coming from privatisation of previous publicly owned industries – e.g. Deutsche Post, Deutsche Telekom and Deutsche Bahn.

The difference to the US seems to be that many businesses that grew after WW2 already existed beforehand (e.g. Aldi) and/or didn’t really grow, but still outcompete everybody else in their respective fields (SME aka German Mittelstand).


He means non-UK Europe.


The extent of your argument seems to be "socialism", "just think about it", and one anecdote. If we are going to boil down a country's economic history to one word can we at least be more reasoned about it and elaborate more?


I know a French clothes designer who manages to bootstrap her business despite a shoestring budget and having the clothes made in France. http://www.afleurdorgies.fr/




Guidelines | FAQ | Support | API | Security | Lists | Bookmarklet | DMCA | Apply to YC | Contact

Search: