The recent tax measures announced by the Government Marois, that have attracted so much controversy, seem to have been strongly inspired by those promised by François Holland, the Socialist Party candidate in the presidential election of may last in France, and who have just recently come into force in 2013 budget. Indeed, the same desire to assume by the best there in these two Governments pledged a tax burden more important to control the deficit.
However, please note some important differences between the two sets of measures.
The lighthouse of François Holland measure that has particularly attracted attention in France and the world was to impose 75 annual income % more of one million euros (about $1,250,000 anyway!). Yet, oddly, well that the Socialist Party is no minority and is likely to be in power for at least four years, this measure should last only two years.
Better understand its temporary character knowing that such a measure is clearly more symbolic than effective, the Government does collect it as approximately 160 million euros, which, for a country 10 times more populous than Quebec, is highly.
In Quebec, many commentators indicated that the increase in the levels of taxation would lead well little additional revenue, but the Government did not talk about only temporary measures.
The second measure of the Holland Government is the creation of a new level of tax to 45% for annual income above $ 150,000 euros (more than $180,000). An alert reader will note that despite furious protests from the French, it’s still lower than existing rates currently in Quebec, and this, before even the measures Marois announced which, let us remember, would the combined rate to 55% for annual income over $ 250,000.
Finally, the Socialist Government plans to reduce its large deficit, two-thirds by the tax increases and the third by the decrease of the State expenditure, decrease of which we have not yet heard in Quebec, component increase seems to be the only one that is topical.
It is still surprising that Government Marois has taken over or imitated tax measures of a clearly identified as Socialist Government, while radicalizing them more. The corner left of the PQ is evident.
In closing, the neighbors (Ontario, New Brunswick) Quebec demonstrated more restraint to the announcement of the Marois measures than the British neighbor of the France. Indeed Prime Minister Cameron, who comes from reducing its maximum rate, 50% to 45% responded to the announcement of these increases by stating in June 2012 at the G20 Summit that he conducted the red carpet at all French – individuals and businesses – wishing to emigrate. This says a lot about the expected effect of such increases. Does Quebec, despite their restraint neighbours, must already, with reason, to lick their chops.
Philippe Lelarge – partner, Gasco Goodhue St-Germain