It should surprise no one that someone writing at Forbes thinks that France’s 75% income tax rate is going to be disastrous. (And he may, for all I know, be right – I am honestly uncertain how far France can usefully raise its top income tax rate.)
What I found interesting, though, was the contrast he drew between the US and Europe at the end:
… For the US tax system is based upon citizenship while everyone else bases it upon residence. If you have a US passport then you are subject to US taxation (you might not have to pay any because of a low income, but you’re still subject to those tax laws). It doesn’t matter where you live in the world you still cough up to Uncle Sam. The only way out of this, the only way to “avoid” such US taxation is to give up your US citizenship. At which point the Feds will charge you all of the tax you would ever have paid anyway….
Which brings us to the wry point. Given this possibility of simple exit from any and all of the European tax systems (and such exit does not require that one stays in the EU either) the theoretical peak of the Laffer Curve is lower in Europe than it is in the US. Where such exit is very much more difficult. Which is rather odd really, given that tax rates and the tax burden are rather higher in the EU than they are in the US. It’s almost as if each place has the tax system suitable for the other.