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The French Choice: Soccer or Taxes

The French Choice: Soccer or Taxes
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The list of France’s national pastimes includes striking, but it also includes soccer. You can imagine the confusion/ire/angst generated by the announcement that the premier French league will strike at the end of November in protest of Socialist President Francois Hollande’s controversial new tax initiative.

The tax in question is a top marginal rate of 75%. This will only apply to income earned over $1 million, and while it affects almost no Frenchman directly as few earn so much, it is affecting everyone by the looming uncompetitiveness it will saddle the French soccer league with. Unable to pay the wages necessary to secure topflight players, talent will migrate to other markets.

I’m sure that soccer club managers and fans of nearby markets – the English Premier League, Germany’s Bundesliga, Italy’s Serie A and Spain’s La Liga – are all licking their lips at the deals that will soon be on the market looking to seek exile away from France. French players have already started the exodus, preferring to play in the relatively unknown Monaco because of the special “treatment” that it gives not only soccer players, but all its citizens: low taxes.

In the words of Jean-Pierre Louvel , president of the French professional clubs union (UCPF): “We are involved in a historic protest and have a real determination to save football by having a weekend without games at the end of November.” This only raises the question: when will French politicians supporting this tax see that what is good and necessary to save one industry is also good and necessary for the others?

Scrapping this “super tax” might not just save French football from relegation to the minor league, it would also save France from becoming a second-rate country.

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David Howden is Chair of the Department of Business and Economics, and professor of economics at St. Louis University, at its Madrid Campus, Academic Vice President of the Ludwig von Mises Institute of Canada, and winner of the Mises Institute's Douglas E. French Prize. Send him mail.

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