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France’s Lesson in Consequences…

By JLP | December 12, 2012

“While we are free to choose our actions, we are not free to choose the consequences of those actions. Consequences are governed by natural law.” – Stephen Covey in “The 7 Habits of Highly Effective People”

France raises taxes on the wealthy.

The wealthy leave France to escape the higher taxes.

France’s Prime Minister, Jean-Marc Ayrault, whines about the “greedy” rich leaving his country.

Question: What did Jean-Marc Ayrault expect would happen?

I suggest Mr. Ayrault memorize the quote at the beginning of this post.

Topics: Economics, Taxes | 9 Comments »


9 Responses to “France’s Lesson in Consequences…”

  1. Sam Says:
    December 13th, 2012 at 5:04 pm

    Ayn Rand has a similar quote, maybe out of Atlas Shrugged. Something about how you can ignore reality, but you can’t avoid the consequences of ignoring reality. Maybe Mr. Covey got his quote from her.

  2. BG Says:
    December 14th, 2012 at 1:05 pm

    If politicians don’t know that government policies always have unintended consequences, then they don’t deserve to hold their office.

    I can’t believe that not a single person warned the PM of the consequences of excessive tax hikes…its common sense that if you excessively raise taxes on the group most equipped to flee your country, they will.

    Flat/fair equal tax rate for all, with no exemptions, deductions, loopholes would be ideal.

    Even the US is doing it wrong. Obama wants to raise rates because (some of) the rich are paying less than their fair share. Those guys are paying less because of the loopholes, not because the top rates are too low. Increasing tax rates won’t make Mitt Romney pay a single cent extra in taxes.

  3. Evan Says:
    December 15th, 2012 at 2:13 pm

    BG,

    From the CARD Act to certain provisions of Obama Care it just seems like NO politician really understands or cares about unintended consequences

  4. BG Says:
    December 17th, 2012 at 8:50 pm

    Evan) Actually, there was a negative unintended consequence of the CARD act (most consequences, intentional or not, were positive): stay-at-home moms were not allowed to claim house-hold income on credit applications — so they were being denied credit. AFAICT: the CFPB has already started rolling back those regs so the stay-at-home moms/dads can use household income on credit apps again.

    So, I think we do a pretty good job in the US of admitting mistakes and fixing them in law. Or are you talking about some other unintentional negative consequence of the CARD act?

    As for ObamaCare (Patient Protection and Affordable Care Act), that bill has so many provisions that it is going to take many years to fix all the negative unintended consequences of the new law.

  5. Jack Says:
    December 17th, 2012 at 11:10 pm

    “stay-at-home moms were not allowed to claim house-hold income on credit applications — so they were being denied credit.”

    That sounds like a Good Thing.

  6. BG Says:
    December 18th, 2012 at 8:51 am

    Jack) Married people should appear as one financially — shared debts and incomes.

    The CARD act was preventing stay at home moms/dads from building credit because they couldn’t claim the household income (primarily earned by the spouse) on credit applications. This reinforces domestic abuse by preventing a victim from being able to flee, and also creates a controlling atmosphere.

    That unintended consequence was not a
    Good Thing.

  7. Jack Says:
    December 19th, 2012 at 7:25 pm

    Sorry, BG, but I cannot find what you’re talking about in the CARD Act.
    http://www.govtrack.us/congress/bills/111/hr627/text

    The only thing I found was this:

    SEC. 109. CONSIDERATION OF ABILITY TO REPAY.

    (a) In General- Chapter 3 of the Truth in Lending Act (15 U.S.C. 1666 et seq.), as amended by this title, is amended by adding at the end the following:

    ‘SEC. 150. CONSIDERATION OF ABILITY TO REPAY.

    ‘A card issuer may not open any credit card account for any consumer under an open end consumer credit plan, or increase any credit limit applicable to such account, unless the card issuer considers the ability of the consumer to make the required payments under the terms of such account.’.

    And my opinion is, anything that makes it harder to get a credit card is a Good Thing.

  8. BG Says:
    December 20th, 2012 at 9:39 am

    Yes, Jack, that is the exact section of the CARD Act I’m referring to, and is a perfect example of unintended consequences.

    That seemingly harmless language prevents stay-at-home moms from opening lines of credit because the rule forces the banks to only take into consideration the income of the “consumer”, not the “income to which such consumers have a reasonable expectation of access.” (ie: the income of a spouse).

    Here is the CFP proposed rule change to undo this unintended consequence.

    CFPB Proposes Making it Easier for Stay-at-Home Spouses and Partners to Get Credit Cards

  9. Jack Says:
    December 20th, 2012 at 1:55 pm

    To quote your own source, “Under current CARD Act regulations issued by the Federal Reserve, a card issuer generally may only consider the individual card applicant’s income or assets.” (Emphasis mine.)

    The “unintended consequence” was NOT a consequence of the law, but of the regulations.

    And I repeat, anything that makes it harder to get a credit card is a Good Thing.

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