France’s taxing expatriates
Gerard Depardieu, 64 years old before the year’s end, is an actor of great range and talent. He could play the naïve, finally broken farmer in Jean de Florette; the heroic, swashbuckling, great-nosed Cyrano de Bergerac; the slobbish but romantic Georges in Green Card…and so on, and on, through scores of films and TV series, made at a rate of nearly five a year for over forty years. He acquired a fortune, restaurants, vineyards and many awards, capped by the Legion d’Honneur.
Earlier this month, he became an expatriate to escape French taxes. He returned his passport to the government, and moved from Paris to the village of Nechin in Belgium, just over the French border, where he joined a community of the French rich. They live there to enjoy the low taxes on stock and capital gains – low compared to those in France, where the Socialist government has imposed a marginal tax rate of 75 percent on incomes over 1 million euros ($1.2m).
He leaves in bitterness, with the curses of his government ringing in his ears. Jean-Marc Ayrault, the Prime Minister, said he was “shirking his patriotic duties.” He said that the rich were leaving “because they want to get even richer… we cannot fight poverty if those with the most – sometimes with a lot – do not show solidarity and a bit of generosity.”
For his part, Depardieu claimed he had paid 145 million euros ($190 million) in taxes in his career. “I am leaving,” he wrote in the Journal du Dimanche, “because you (the government) believe success, creation, talent, anything different must be sanctioned.”
In the markets and global financial institutions there’s a story building that France is a failure, and maybe even the next sick man of Europe. Louis Gallois, a prominent business figure, produced – on President Francois Hollande’s invitation – a report in October on how to buck up France’s economy, calling for a “competitiveness shock” that would include relaxing rigid labor laws and cutting taxes. These run counter to much in the Hollande program – he’s raised taxes, threatened to nationalize an Indian-owned steel plant that is closing and insisted that a 35-hour week, introduced by a previous Socialist government and much reduced by his predecessor Nicolas Sarkozy, will stay. In an interview, Gallois said that “there is not actually a consensus in France that companies must be competitive to create value” – a serious charge. The president welcomed the report, moved to implement some of it, then seemed to retreat.
At this fraught moment, the departure of Depardieu, France’s – and maybe even Europe’s – most famous actor, dramatizes an already steady flight of the rich. At the G20 summit in June, Prime Minister David Cameron gracelessly announced that Britain would “roll out the red carpet” for all rich French men and women who wished to escape to freedom in low tax Britain. London, especially, has drawn into its ample, multicultural bosom a large number of French – up to 400,000, making the British capital the sixth-largest French city.
Depardieu is a man in full: born to working class parents in central France, finding his feet in the cinema in his mid-twenties, and then a dizzy rise to stardom, in Europe and in Hollywood. He claims to drink up to six bottles of wine a day – no wonder, then, that he has had multiple motorcycle accidents, and has started brawls with other drivers. His tall and rugged good looks are now largely hidden under layers of flesh.
His wealth and success give him freedom. Like others of his status, he’s found himself as a kind of Ayn Rand hero, contemptuous of regulations and especially of socialist politicians, seeing them as intolerable little figures seeking to tie him down. “Despite my excesses, my appetite and my love for life,” he has been quoted as saying, “I am a free man.” He is pitting the power of his fame against the authority of the state. The center-right daily Le Figaro wrote in an editorial entitled “The real scandal” that the affair revealed “an absence of common sense on the part of a government which perpetually insults rich people.”
Yet the governing politicians, elected on the Socialist ticket, are grasping after the other two elements in the French motto – Liberté, Égalité, Fraternité – that find their origins in the 1789 Revolution. Depardieu has claimed Liberté. For those in power, Égalité and Fraternité (or solidarity) must have equal sway. They are trying to fashion a society less divided by wealth, one that doesn’t allow the megarich to exist in a separate sphere from their fellow citizens.
In her recent book Plutocrats, Chrystia Freeland (editor of Thomson Reuters Digital, and so the boss of this column – but even so, her book is worth citing) writes of a period in the U.S. recent history, from the 50s to the 70s, when divisions of wealth actually lessened. This is partly attributed to “the Detroit Agreement,” an accord signed in 1950 between the U.S. car companies and the auto workers’ union that traded industrial peace for high wages and health and other benefits.
Slice by slice, that kind of compromise has eroded. As jobs have headed east, so did the steady middle-class incomes that industrial and service workers had come to expect. Globalization has also led to the appearance of the ultra-super rich. Depardieu, a mere multi-millionaire, isn’t the richest of the rich, members of which reckon their wealth in billions; but he’s still a class apart.
The French ministers have an idea of a society where égalité is more than a slogan. They want it to be real in the here and now, not just as a piece of leftist nostalgia. It’s an idea now being tested, by a working-class hero multi-millionaire turned scourge of the Socialists – tested, perhaps, to destruction.
PHOTO: French actor Gerard Depardieu tastes his latest sparkling wine edition at the Paasburg’s winery store in Berlin, November 30, 2010. REUTERS/Tobias Schwarz