Multiple parties are jockeying for position in the aftermath of France’s seismic snap election. The leftist New Popular Front (NPF) insists its ideas should be implemented.

France’s left wing New Popular Front (NPF) - now the largest group in parliament - has called for a prime minister who will implement its ideas including a new wealth tax and petrol price controls.

The leftist alliance secured the most seats in the recent French elections but fell short of the 289 needed for a majority in the National Assembly, France’s lower house of parliament.

President Emmanuel Macron’s Together bloc came in second and Marine Le Pen’s far-right National Rally (RN) party finished third.

France’s parties are now jockeying for position and it’s unclear exactly how things will shake out, but the NPF has insisted it will implement its radical set of ideas.

  • Buelldozer@lemmy.today
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    4 months ago

    Sounds great, now how are they proposing to tax the wealthy. You know, those people who have a jet set lifestyle but no income to tax?

    • jj4211@lemmy.world
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      4 months ago

      The answer would be of course they have income, and we have to adequately recognize it as such.

      Borrowing money against stocks? Income. Capital gains on high value or nonessential assets (e.g. non-primary residences and stock)? Income.

      Actual money has to come in at some point to manifest that lifesytyle and that is obviously income.

      • NotMyOldRedditName@lemmy.world
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        4 months ago

        I’ve always thought that it would make sense to tax borrowing money against something, but you need to have a way to account for it being paid back with either yet to be taxed assets, or already taxed assets.

        E.g

        Has 100 million in bank.

        Leveeages 10m to buy a house.

        Sells stock to pay off loan monthly.

        Now in this case we can tax the 10m (maybe at a different rate) but if they sell the stock to pay off the loan it should take into account the tax they paid on the loan.

        Also if they pay the loan off with already taxed money (cash in an account) that loan then needs to have its tax refunded in some manner.

        It can get pretty messy, but if the law only triggers when you do this over a certain threshold, those people would be able to afford the tax people to sort it out.

        • Buelldozer@lemmy.today
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          4 months ago

          The easy way around the problem is to tax loans that aren’t being used to purchase an asset. This is the “living expenses” loan hack that the ultra-wealthy use and it absolutely needs to be removed.

          Your example is a bit different because the wealthy person is selling stock to make the mortgage payment. In this case they should already be paying capital gains taxes on those sales. If they aren’t then figure out why and fix the tax code.

          We can tie the two situations together by considering the annual sum of all stock sales and non-asset purchasing loans as regular income and thus subject to income tax, minus any capital gains taxes already paid.

          That easily closes both of the common loopholes that the ultra-wealthy use while leaving us normal people untouched. The ultra-wealthy would suddenly be paying income taxes on the money they are spending to maintain their lifestyle, same as the rest of us are.

          • NotMyOldRedditName@lemmy.world
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            4 months ago

            Sorry I meant in my example they took out a loan, not a mortgage.

            Better rates that way probably.

            But it’s the same problem even if it’s living expenses.

            You borrow 1m to live off of and pay income tax on it.

            You then sell stocks to close out the loan and pay capital gains tax

            You’ve now paid tax twice.

            Edit: that’s what it needs to be able to account for which might get messy

      • CanadaPlus@lemmy.sdf.org
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        4 months ago

        Stock dividends? Oh, you bet that’s income. Income should be delta wealth, simple as.

        Borrowing money against stocks? Income.

        I actually take issue with this one, though. Debt doesn’t just disappear, until you (or someone else) pays it back, rich or poor alike.

        Edit: It doesn’t but apparently in the US specifically the taxation isn’t the same.

        • jj4211@lemmy.world
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          4 months ago

          At least in the US dividends already count as normal income and taxed at the rate of wages, as far as I know.

          On the debt, I’d say the remedy for that is some sort of tax credit on repayment, depending on how the repayment goes. So if you are using real income to pay a debt that has already incurred tax liability, then that real income is exempt to avoid the double taxation.

          • CanadaPlus@lemmy.sdf.org
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            4 months ago

            They’re not in Canada, I’m pretty sure. Which is messed up.

            Is there something I can read on leveraging stocks as a loophole? I’ve never heard of it. Every financial advisor will tell you to avoid long-term debt if at all possible.

            • jj4211@lemmy.world
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              4 months ago

              Here’s something talking about the loophole: https://equitablegrowth.org/closing-the-billionaire-borrowing-loophole-would-strengthen-the-progressivity-of-the-u-s-tax-code/

              And some talking about some ways in which it can be leveraged: https://www.healio.com/news/hematology-oncology/20220928/avoid-capital-gains-taxes-like-a-billionaire-using-buy-borrow-die-strategy

              In short, by borrowing, the tax code assumes that long term the proceeds of the loan will be disposed of in an appropriate tax way. However there are so many ways to be slippery about repayment that it’s hardly a guarantee. So it may be wise to shift to pessimistically assuming long term shenanigans at borrowing time and taxing the proceeds as income, with tax breaks around “sane” repayment to handle the intended “avoid double taxation” behavior.

              • CanadaPlus@lemmy.sdf.org
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                4 months ago

                Fascinating. Old paintings as a way of hiding wealth make sense - that is subjective value - but you can look up stock prices in near-real time. Uncle Sam just has a really weird way of defining a transaction, probably do to something in deep US history.

                If we’re rearranging the whole tax code in this hypothetical, I’d just write it in such a way the IRS is allowed to tax gains even if there’s no “realization”, or at least taxes heirs just like the deceased. If not, I guess it’s a matter of what you can get legislative support for, and what the article suggests would be a reasonable kludge.

                • jj4211@lemmy.world
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                  4 months ago

                  Problem with taxing unrealized gains is that there’s a fair argument that unrealized gains are, largely, fictitious. For example if Musk said, today, “I am selling all my stock, give me 250 billion now”, he would not get 250 billion dollars, because there isn’t 250 billion dollars of money actually primed to buy Musk’s stock.

                  Analagous, if your house went up by $150k, then they said “oh, you ‘earned’ $150k, you owe $80k”, your only way to cover that would be to sell the house, which isn’t fair because you were living in it, not using it as a financial instrument. However, if you borrowed $150k and used it to buy a couple of corvettes based on that equity increase, well that’s weird but maybe ok depending on how you ultimately pay back that $150k you borrowed, but at least in the short term, you made $150k appear out of thin air, which might be janked in the long term…

                  • CanadaPlus@lemmy.sdf.org
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                    4 months ago

                    Yeah, there’d need to be a bit more flexibility about payment schedules, I think. If your stuff appreciates you’re definitely richer, it’s not just theoretical before selling in today’s complex financialised market. It would have to be legal to owe more than you pay for a long period if there’s a good reason like “my house isn’t subdividable and I am house poor”. Taxing something hard to value would be a stickier wicket, but you could just leave the amount owed for your now legendary sports card undefined until it is defined (realised, basically, but without needing to pin it down in the legislation).

                    And capital gains tax should have to be settled up before your estate closes.

                    Analagous, if your house went up by $150k, then they said “oh, you ‘earned’ $150k, you owe $80k”, your only way to cover that would be to sell the house, which isn’t fair because you were living in it, not using it as a financial instrument.

                    Primary residences are often exempted from financial requirements for that reason.