Germany (Tax Cuts) France (Tax Increases): Who Will Win?

This should be the next debate topic. If statistics, morality, and history are any indicators, the direction that Germany is taking will win the day. Of course, cutting government to its proper role (in the US that means its constitutional limitations), there will always be appeals for more money.

Public schools are a perfect barometer of the claim that more money fixes things. Nonsense. A homeshooling family can educate a child for less than $1000 per year. It’s one of the reasons Dr. Gary North has described the homeschool movement as the “The Most Radical Social Movement in America” for the simple reason that it’s opposed to educational and political messiahism. Statism is the god of most politicians and the people who benefit from wealth transfer payments confiscated from the productive — America’s 47 percent.

France wants to raise taxes, thus giving more power to the government at every level. French President Francois Hollande believes that he can bring prosperity to France by raising taxes on the most prosperous people, you know, the people with money who could spend and invest more if tax rates were lowered resulting in higher employment.

The 2013 budget calls for $26 billion in tax increases, “including a levy of 75 percent on incomes over [$1.24 million], and eliminating limits on the wealth tax.” Stupid is as stupid does.

“We’re getting a lot of calls from high earners who are asking whether they should get out of France,” said Mr. Vincent Grandil, a partner at Altexis, which specializes in tax matters for corporations and the wealthy. “Even young, dynamic people pulling in 200,000 euros are wondering whether to remain in a country where making money is not considered a good thing.”

Hollande is under the false impression that his government can spend money better than people who have money.

Then there’s Germany. Chancellor Angela Merkel is calling for tax cuts and an end to bracket creep:

Merkel told business leaders Germany should end the automatic progression of workers into ever higher tax brackets due to inflation, which siphons more than 20 billion euros ($26 billion) out of the economy each year. She also renewed her calls for cuts in pension contributions as another way to boost purchasing power.

“Growth in Germany can at the moment be stimulated by an increase in domestic demand more than anything else,” she said.

And what is the source of inflation? Government. Not only do governments tax at higher and higher rates, but they dilute the value of our money by adding money to the economy that is backed up only by hopes and promises of future prosperity.

All things being equal, Germany will win this debate, if not in the short term, certainly in the long term.