François Hollande’s 75% tax rate is still going to struggle due to the ease of moving out of France (or any country besides the US) but bringing a dose of fairness is going to be much easier. There will be plenty of complainers who will suggest how difficult it will be to attract top talent but there is even more evidence that shows paying top dollar (or euro) does nothing to attract top talent.
For years we have seen one company after another bump up pay to attract the next Steve Jobs or whatever other CEO of the day is being described as the greatest leader ever. The reality is there was only one Steve Jobs. The others command superstar pay but more often than not, they under-deliver. (We only need to look at Bankia as one recent example.) They’re always billed as the leader who will take the business to the next level, but the only thing going to the next level will be the executive pay.
Since Hollande is a Socialist, this change will no doubt trigger a storm of criticism and howling from the so-called free market “capitalists.” As in the same free market capitalists who all thought it was important to bail out the lifestyles of the bankers and keep the quantitative easing policies that have been all about free money for bankers to gamble. There hasn’t been anything close to a free market or raw capitalism for years so spare me any arguments about socialism. We’ve had it and it has been socialism for the 1%.
If we are ever going to bring some balance back to society, we’re going to need a lot more action like this. We’ve tried excessive CEO pay and it simply does not provide an acceptable ROI. More on fat cat pay from The Guardian: