French President Francois Holland’s proposed tax on the rich touched off a media firestorm. There were headlines from the U.K. to the United States and Singapore saying the French were running for the border to avoid the 75 percent tax.
There were even comparisons between Obama and Hollande as "The Socialist Twins."
Well, nevermind.
News reports in France today say the tax has been tweaked so that it will only effect 1,000 households. And that’s if it passes – which remains a big question.
The French newspapers Les Echos and Le Figaro both say today that the tax being considered would only be levied on income of more than 2 million euros. That’s double the original cut-off.
There may also be other changes. Rather than applying to all income, the tax may only apply to ordinary income from salaries. If investment income or capital gains is excluded, the wealthy French who make their money from investments need not worry. (Read more: Ultra-Rich Ready to Return to Stocks)
The tax also makes special provisions for athletes and artists, carves out social security taxes and ... you get the idea. Pretty soon, it’s not anything like a 75 percent tax on million-plus earners.
Pro-business folks are cheering the changes. The left is calling it treason.
But the tax changes in France look a lot like the tax-hikes on the wealthy in the U.S. – lots of politics, lots of headlines, lots of class warfare and and lots of feigned panic on the part of the wealthy and their accountants. But in the end, their taxes stay the same.
We're seeing a similar phenomena in Britain, where a floated tax on wealth is now being discussed as a moderate tax on mansions that's unlikely to get very far. (Read more: Mass Migration of the Super Rich)
Why don't these taxes go anywhere? The left would say they're blocked by a self-interested plutocracy that strong-arms politicians into backing down. The right argues that more rational minds have prevailed and that we shouldn't tax job creators or chase out the top producers.
Either way, wealth taxes are more politics than economic reality these days. When it comes to taxing the rich, the more things change, the more they stay the same.
-By CNBC's Robert Frank
Follow Robert Frank on Twitter: @robtfrank