France’s taxing expatriates

By John Lloyd
December 26, 2012

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

Comments
17 comments so far

Why is it that we always look at the rich as being ungenerous? They are simply protecting their wealth from being stolen via extortion, or taxation, whichever term you prefer. I applaud anyone who can successfully avoid being robbed of a portion of their wealth by the largest criminal organization to ever exist.

Power and privilege has and will always exist. In my view, a person saying “Tax the rich at higher rates than the poor” is saying nothing more than “You there, you have and I want, so I vote to support those who will rob you and give to me.” It’s easy to vote for a Robin Hood government when you’re the recipient. Until there is a “void office” box on the ballot, or, as long as there is a ballot, people will choose to use the machinery of government in the way that best suit them personally. “Fairness” is a sham and so is “equality”. They are words that can only be enforced by the same power and privilege that creates the inequality and the unfair to begin with.

If you want to equalize wealth, then equalize the means by which it is obtained. It’s hard to be filthy rich without a money monopoly. The King, Baron and peasantry has been replaced by the President, Legislator and citizen, but the mechanism its self never changed. Gerard made a fortune by the enforcement of patent and copyright. End that, and you end the filthy rich movie star. End the money monopoly and you end such large scale taxation and everyone prospers.

Posted by LysanderTucker | Report as abusive

In his foolishness, Hollande will bring about the collapse of the Etatist regime that has plagued France for decades, regardless of the political party in power.
France is yet another European country facing harsh reality, after years of believing in its own version of the utopian welfare state dream.
No modern country with such a huge government footprint in the economy (57% in France’s case) can hope to survive an era of increasing global competitiveness.
We’re likely to see the fifth French republic collapse within a few years, and a sixth French republic emerge after much social unrest and political turmoil.

Posted by reality-again | Report as abusive

@LysanderTucker: In nearly all countries and nearly all times government has ultimately benefitted the rich. Who protects their property ‘rights’? Who fights their wars? Who creates the rules that allow these guys to suck up so much money?

Boo-hoo. “I live in a society that has allowed me accumulate more resources than a person could possibly need in a hundred lifetimes and now they want some of it back so they can maintain that society.” What a struggle it must be to be Depardieu .

Posted by anarcurt | Report as abusive

Albert Einstein, in his book, Thoughts and Opinions, said something like,

“It’s impossible for any human to give more to society than he receives. We use the knowledge of our ancestors stored in books in the libraries, written by people long dead. We walk on roads and streets built by the labor of men no longer living. We live and work in buildings and houses crafted by carpenters a generation before us.”

Einstein had it right, it seems to me. When I hear wealthy people, and most especially those who inherited wealth, claim to “own” things, as though they are great givers to society, I think they should consider Einstein, who, genius that he was, still humbly appreciated that he gained much more from society that he ever contributed.

Yet today, all the rich kids who inherited wealth, or got lucky with an investment, are whining and telling us how much we owe them, how tough it was for them. Such sacrifices they made.

Enough.

Posted by AdamSmith | Report as abusive

@anarcurt – Well said. And you asked the key question: Who protects their property ‘rights’?

My thought is this:

The mansions ‘owned’ by the wealthy are each ‘legally protected’ by a piece of paper we traditionally call a deed, a copy of which is stored in the county courthouse, which is government with a capital G.

Without that Government, so desparaged by him, the wealthy man can no longer direct the police to throw another human off ‘his’ estate.

The wealthy shoud consider that when society is treated fairly, it tends to respect that little piece of paper, the deed. But when 99% of society goes broke, and loses their own homes to foreclosure, they start to see the deed as something evil rather than beneficial.

The best outcome can only happen when people are treated with some degree of fairness. Capitalism is part of nature, and is a powerful force. But without fairness, it will be the mechanism of society’s destruction.

That’s how it seems to me.

Posted by AdamSmith | Report as abusive

Water flows to the path of least resistance. Rich or poor will find a way to avoid taxes. Why have so many taxes in the first place? Oh well better for Belgium.

Posted by Butch_from_PA | Report as abusive

The reason for a possessor of great wealth to pay taxes is to prevent his mansion from being burned down tonight.

That has been true from the beginnings of civilization.

Posted by AdamSmith | Report as abusive

I congratulate people who escape from a high tax regime such as France or the US. It’s like hiding your valuables from marauding barbarians. For example, Eduardo Saverin, one of Facebook’s founders, gave up his US citizenship and now is beyond the reach of the thieves in Washington, DC.

Governments are fighting back though. For example, see Senate bill S. 3205 that was introduced this year, the ex-PATRIOT Act, which would ban people who left the US for taxes reasons from re-entering the country among other provisions. The US government is proclaiming that you are its slave in perpetuity and your property is theirs.

Posted by paulmcg0 | Report as abusive

“Chrystia Freeland…writes of a period in the U.S. recent history, from the 50s to the 70s, when divisions of wealth actually lessened….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.”

A rose by any other name…Ms. Freeland rushes forward to enthusiastically embrace the industrial blackmail by which unions attained a privileged place in the American economic system of that period. No matter that the “special status” of union workers was paid for by every non-union American buying an American-made car?

I grew to maturity during that period. My first new car was NOT an American one. It was an Austin Healey Sprite. It was human in size, as opposed to elephantine. It “handled”, as opposed to gliding one in cushioned comfort to the scene of an accident when circumstances dictated a sudden stop or change in direction of travel.

As I came to appreciate quality construction, reasonable price, reliability and economy of operation, I switched, like most enthusiasts, to Japanese cars; my first being one of the “original” 1970 240Z coupes. I still have it. Other Americans had flocked to the VW , the Datsun 510, the Volvo and the Mercedes for better value.

That “…Detroit Agreement” set in motion the repudiation by more and more Americans of oversized, outmoded poorly designed domestic vehicles. Far too heavy for the purpose intended, the typical American car of that period required an inordinate amount of raw materials to construct, 100,000 miles of reliable service was only rarely achieved, and the quantity of gasoline consumed to go that distance would today earn one a “Friend of OPEC” bumper sticker.

Today I still greatly enjoy driving a 1999 Chevy Metro 3-door hatchback with a manual transmission, bought new. At just over 120,000 miles, it should serve as my primary transportation to 200,000 miles and beyond.

It can cruise at 80 mph without strain and still deliver 34-38 mpg. It delivers 40,000 miles on a set of 13″ Michelin tires. Made in Canada to my specification (waited four months), GM only sold this vehicle because such subterfuge was the only way they could achieve their federally mandated “fleet mileage” of that time. It was REALLY the Suzuki “Swift”.

Americans are not all permanently brainwashed by union propagandists. I just LOVE to hear that union chorus that “we’re ALL in this together”! Union bumper stickers SHOULD say “Live better…at the expense of every non-union worker buying a union-made product.”

Posted by OneOfTheSheep | Report as abusive

As long as the global economy continues and nationalism stays subdued, then this trend will not only continue but increase. The wealthy being under attack domestically and morally challenged by their global peers will most likely seek respite by moving to the most friendly and advantageous places. Global corporations will soon seek international autonomy as more and more countries try to tax and leverage them for their purposes. We are seeing the beginnings of this with the current labor and corporate moves within the US and other countries, and globally with places like Dubai, Macau, and the cruise ships converted to floating international homes.
I agree with @LysanderTucker in that we should change the game, not the players.
In the game of Monopoly, the game always ends. It may take a few days with an honest banker, but inevitably it will end. If I were to play a game based on our economics, I would hope the game never ended.

Posted by tmc | Report as abusive

Is that the same Detroit agreement that marked the decline of the competitiveness of our auto industry, the beginning of defined benefit legacy costs that bankrupted GM and led to thousands of layoffs….yes, I believe it was.

Posted by jaham | Report as abusive

Property is a human construct without any real meaning except for laws. And laws are made to protect the wealthy, that’s why Lenin said that we need to replace the dictatorship of the capitalist with the dictatorship of the working class. That however did not go so well. But the fact remains that the planet does not belong to anybody and when the next medium size meteorite comes around it will prove my point. But for a short end to this rant, adieu Monsieur Gerard Depardieu and good ridance. I never found his movies interesting anyway.

Posted by ofilha | Report as abusive

I always thought Depardieu is a lousy actor. He is also fat and ugly. I have no idea how he made his way into movies. Just as long as he does not move to the USA and drive around drunk over here in a high powered exotic car.

Posted by americanguy | Report as abusive

Depardieu seems to easily forget the $millions that the French government over the past century has invested in French cinema. Where Hollywood basically overtook film making worldwide, France has held its own, providing actors like Depardieu a career in his own language.

So now that Depardieu has $millions to live off of, he can’t do his part for the next generation of French film?

Posted by Acetracy | Report as abusive

Oh please, he left because he’s one of those people for whom far more than most others just isn’t enough.

Posted by borisjimbo | Report as abusive

Great op-ed John, and as usual the cacophony of the comments makes an interesting epilogue. Mon Dieu!

Posted by CaptnCrunch | Report as abusive

John, if you haven’t already, read ‘That Sweet Enemy’ by Robert and Isabelle Tombs. It’s a history of cultural differences between France and England. Thick, but well done and quite interesting/amusing. He’s English and studied in France, she’s French and studied in England.

Petain in the 1940′s rejected the Revolutionary ideals, though of course came to grief with the collaboration. De Gaulle was seriously dedicated to the upper-class and successfully destroyed the Fourth Republic, but came to grief in ’68 with his inflexibility.

France is schitzo. Most countries are, but most don’t have quite the legacy of cutting off heads. At one time much of upper NY state was settled by French emigres from the Revolution, living in genteel poverty, at the current time the [wealthy] senior management in its banking sector is very much a closed and family affair. So Depardieu is noteworthy only for making the news, otherwise seems a rather conventional Frenchman.

Posted by ARJTurgot2 | Report as abusive
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