One of the main complaints about Macron's policies since taking power have concerned his moves that have favoured the rich. He suppressed the so-called ISF (Impot sur la fortune), and he is in the process of abolishing a whole range of property taxes. Both measures are felt by many to favour the wealthy, and there are mounting calls to reinstate some form of wealth tax.
Like many people, I'm personally in favour of taxing the one thing that people cannot move out of the country. They can move their yachts, Rolls-Royces, paintings, statues etc offshore. But they can't move their chateaux, mansions, villas and estates.
But, as usual, I'm reluctant to suggest schemes that appear to target specific classes of people or which require complex sets of rules. History has shown that attempts to target the wealthy with taxes that depend on the number of windows will simply lead people to block up the windows.
My preference would be to have a flat rate annual tax that depends on the value of the property or land. Suppose that the annual tax was set at 1%. In that case, on a €200,000 property, the owner would be required to pay €2000 a year. For an agricultural estate you would use the current average value of agricultural land - currently €5990 per hectare in France, although the value depends a lot on the location. For example, in Southern Corsica, it's under €3000 but can reach €13000 in parts of the North. A really large 1000 hectare property might thus cost €10,000 a year, but since the average property in France is around 55 hectares, the amount due would be much less.
The idea of taxing land has come under attack from people who quote the case of a farmer with land on the Ile de Ré, which, because it is a tourist area, became very valuable. Taxing the farmer on the value of the land would bankrupt him.
But it seems to me that there is a simple solution. When the tax claim for 1% of the value of your property arrives, you would have a choice. Either you pay the sum in euros, or you effectively bequeath 1% of your property to the state. If, you lived on the land for 50 years without ever paying, 50% of your estate would belong to the state. And thus, when you die, and the property is passed on to your decendents, the State could asked to be paid. Again, the decendents could chose not to pay. But if they continued, the entire estate woud belong to the government.
It seems a fairly simple system to me. Obviously, one could choose to have different tax rates for different types of property - with a higher rate for commercial property than residential or agricultural property. But, frankly, it seems to me that this is an unnecessary complication. Why not just have a flat rate (for example 1%) for everything?
Clearly, you would need to have some way of deciding what the correct value is for each property. But it is estimated that the value of property in France exceeds €10,000 billion.
If all that was taxed at 1% per annum, it would generate €100 billion a year - a substantial proportion of the entire French governments budget - currently around €385 billion. Admittedly, many people might be tempted to avoid paying the tax and progressively hand over the ownership to the Government. But, irrespectively of whether people pay cash or by granting the state rights, it is the French people that effectively become wealthier as a result.
One particular case of interest is agricultural land. If a farmer was having difficulty in generating enough income to pay the property tax, it would be fine to hand over 1% of the land per year. That agricultural land could be loaned to citizens who could be required to use the land to cultivate fruit and vegetables or rear stock. It turns out that around 1000 m2 of land can be perfectly sufficient to feed a family of four. The only problem is that it requires a lot of manual work - roughly 6 hours a day according to my cousin Chris, who knows about these things. But with increasing automation, robotics and AI, many people will have much more time on their hands for such activities.
And with around 28 million hectares of agricultural land in France, that is enough to allow 280 million families of four to be self sufficient! In other words, just transferring 1% of the agricultural land to common use could solve the food problem- and we would all be eating much more healthily!
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