Please stop furthering the myth that Europe has no startup scene.
"Here's hoping the French will have a chance to adjust before they destroy what little is left of their startup economy."
I'm not sure anyone knows how this will be implemented yet. Just like US startups are incorporated in Delaware, European startups can, and some are, be incorporated in countries like Luxembourg or the UK. That's just one example how things could work in practice. I think (at least part of) the French startup community is doing themselves a huge disservice at the moment. Drawing premature conclusions and throwing in gripes for good measure.
I disagree, I don't think most entrepreneurs invest to advance the species in general, from my point of view they invest in things that have a potential to make money, while the government has a better incentive to fund something useful but with less direct financial benefits. But of course you can give a lot of counter-examples.
All western governments, with some rare exceptions, are highly indebted. Those debts were just created to keep the machine running, not to make investments.
One could therefore say that governments destroyed wealth and contributed to an excessive growth of a financial economy through loans.
An individual taking the same course of action would end up being bankrupt and would not take millions of persons with him in the process.
Taxes are not just a question of rich vs poor.
Big businesses get subsidies, tax breaks, bank bailouts etc: Corporatism
Corporatism is good for businesses, capitalism is good for consumers.
What you describe is closer to an oligarchy or plutocracy, with corporate indirection acting as a shield to scrutiny, rather than a shield from unfettered associative liability.
But yes, capitalism is good for consumers (and capitalists and entrepreneurs).
Big government has big contracts that need big companies to deliver and manage them; solution, smaller government. (Corporate) welfare government wants to make sure everyone gets a fair chance (via stimulus), including enterprises that productive capital markets find too risky; solution, smaller governmental budgets. Utopian governments believe that society and the world can be engineered to a certain "perfection" (insert megalomaniacal vision here) if just enough constraints (ie, regulations) are placed upon it, like choke collars; solution, fewer constraints.
Big corporations provide the anonimity and scale to meet the needs of large contracts, be non-personal recipients of stimulus (as "job creators"), and have enough contentrated power to scale or bypass the regulatory walls. Small organizations and individuals cannot meet any of these needs effectively.
The solution is to get rid of big government. :-)
Others (including myself) focus on the money. Is the money being used efficiently for things the population wants? How can people more efficiently allocate money so that we all benefit. After all, if the money is being used to its maximum effectiveness, shouldn't all the people benefit? Let's look at the money, decide how efficiently we can get that to move around, then the people will follow along behind that.
Capital gains is where this difference in philosophy hits hardest. Do we want rich folks paying the same as wage earners? Or do we want people who are better at allocating money to things that advance the species in general to have more ability to do more of that?
There's no right or wrong answer. People on both sides take the arguments too far. But when you have no entrepreneurial community and the few that you have are publicly screaming at you to slack off, perhaps you've gone a little too far in one direction.
My question is "How do governments learn what is a happy medium?" I think the answer is regularly changing up who is in charge, because there is no exact and unchanging answer. Here's hoping the French will have a chance to adjust before they destroy what little is left of their startup economy.
I'd also note that laws and policy many times are made based on the public's caricatured idea of something instead of the thing that actually exists. In the U.S., it's common to hear politicians rail against "big corporations" while proposing policies that would sack the local stock broker or web startup guy. Meanwhile the truly large corporations have lawyered up and done enough regulatory capture that they skate through. There can be a huge difference between what's advertised and what the public actually gets.