Opinion

John Lloyd

France’s taxing expatriates

John Lloyd
Dec 26, 2012 18:32 UTC

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.

Wanted: Equitable capitalism, profitable socialism

John Lloyd
Oct 23, 2012 16:26 UTC

Socialism – real, no-private-ownership, state-controlled, egalitarian socialism – has been off the political agenda in most states, including Communist China, for decades. The mixture of gross inefficiency and varying degrees of repressive savagery that most such systems showed seems to have inoculated the world against socialism and confined support for it to the arts and sociology faculties of Western universities. But what was booted triumphantly out the front door of history may be knocking quietly on the back door of the present. The reason is inequality.

Pointing out inequality is a political attraction these days, and as good a dramatization of that as any is in the comparison between what Tony Blair, Britain’s Labour Prime Minister, said about it in 2001, on the eve of his second election, and what Conservative leader David Cameron said about it in a speech in 2009, soon before the 2010 election that made him Prime Minister. Blair, questioned about rising inequality, responded that while he was concerned with poverty and its alleviation, he didn’t lose sleep about the rich being rich. “It’s not”, he said, invoking Britain’s most popular sports figure, “a burning ambition for me to make sure that David Beckham earns less money.”

Cameron, referring to the recently published The Spirit Level by Richard Wilkinson and Kate Pickett – a detailed argument that inequality is bad for everyone, even the rich – said the book showed that “among the richest countries, it’s the more unequal ones that do worse according to almost every quality-of-life indicator.” That left and right should so switch places marks the shift that has taken place in the past decade, from living in societies where the tide of growth lifted all boats to one where most fear they’ll soon be sinking (assuming they already aren’t).

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