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Source link: http://archive.mises.org/5326/wealthy-are-fleeing-frances-wealth-tax-in-france/

Wealthy Are Fleeing France’s Wealth Tax in France

July 17, 2006 by

Interesting article in the Washington Post: Old Money, New Money Flee France and Its Wealth Tax, by Molly Moore:
[A] sizable community of rich expatriate French [are being] driven out by the world’s highest tax bills on wealthy citizens. The exodus continues: On average, at least one millionaire leaves France every day to take up residence in more wealth-friendly nations, according to a government study. At a time when France is struggling to stay competitive in an increasingly integrated world, business leaders say the country can’t afford to make refugees of some of its most established business families. They include members of the Taittinger champagne empire, the Peugeot auto magnates and leading shareholders of dominant retailers Carrefour and Darty. Also going are members of a new generation of high-tech entrepreneurs….The wealth tax — officially called the solidarity tax — is collected on top of income, capital gains, inheritance and social security taxes. It’s part of the reason France consistently ranks at the top of Forbes magazine’s annual Tax Misery Index — a global listing of the most heavily taxed nations. Wealthy citizens’ tax bills can be higher than their incomes, according to tax analysts. President Jacques Chirac’s government attempted to rectify that disparity last year with changes intended to guarantee that no one would pay more than 60 percent of income in taxes. But many businesspeople say actual maximum tax rates still hover at around 72 percent.

{ 11 comments }

Urbanitect July 17, 2006 at 12:54 pm

The cycle of socialism usually lasts about 30-40 years before turning into a real crisis. America started down socialism in the 1930′s and hit its crisis in the 1970′s. Britain hit its crisis in the late 70′s. Canada started socialism in the 60′s and hit its crisis in the early 90′s. France actually had to wait until the 80′s for the triumph of socialism, and we should expect them to begin their crisis right about now.

Tom Rapheal July 17, 2006 at 1:57 pm

72% tax on income? That is confiscatary, probaly worse than most slaves pay comparitaively. Why would anyone with enough money to move away want to stay in France?

Chris July 17, 2006 at 3:46 pm

Not to worry…the French government is going to start teaching their citizens about wealth creation and Capitalism:

http://news.bbc.co.uk/2/hi/business/5157720.stm

Max July 18, 2006 at 2:57 am

72 % ? That’s almost the tax rate in Germany (76%), when you include all the “non-direct” taxes that are either indirectly taxed (gasoline) or called “Sozialabgaben” (social justice tax ;) ).

So, I don’t think that France is solo on this, but rather an example of the European socialist model.

Kieron July 18, 2006 at 5:57 am

I think it’s rather unfair to call it the “European” model, though, when countries like Belgium, Holland and Britain – and for that matter, Estonia – which certainly don’t have anything like 72% income tax, are equally European. A better name might be the Franco-Italo-German model – though the current German and Italian governments at least recognise the need to reform it.

Artisan July 18, 2006 at 8:02 am

@Urbanitect

France abides a socialist model ever more since WW2. The 80′s wasn’t such a breach from Giscard even though he was supposed to be conservative. De Gaule had to concede the decision power in most public services like postage phone electricity. Much evil starts from there.

@Kieron
Belgium isn’t too good an example of a liberal economy. It should be criticized a lot! Taxes officially go up to 50% in Belgium … but on top of that Inheritance is taxed 20%, 30% when over 250000 euro (320000$), which is much higher than German taxes (zero under 563.000 €, 15% at the most over that sum).

Belgium took ten years to go from 115% to 95% government spending of the GNP. the third worse score in Europe, before Italy and Greece.

Besides, being capital to the EC, and being a conglomerate of different cultures, its governmental structure and spending is massively oversized compared to its “efficiency”.

Artisan July 18, 2006 at 8:06 am

@Urbanitect

Sorry, I meant to write De Gaulle had to concede the decision power to the communists in the public services in 1945… lasting till now!

Mark July 18, 2006 at 5:02 pm

I wonder if socialists can understand that 72% of nothing is nothing?

Nyarlathotep July 20, 2006 at 7:54 am

I’m french, living/surviving in France, and to answer your question: no, they do not understand, definetely not, as socialism is all about faery tales. But the situation in France is not only a crisis of socialism, per se, but of statism, as the dominant anti-liberalism ideology looks more like a syncretism between a tradition of hobbesian statism, dating back to the Old Regime, of Saint-simonian technocracy and of socialism both marxist and indigenous. It spans from the left to the right of the political spectrum, for most of french people dismay as no elections can bring notable change: purely a situation anticipated by Bastiat, where statism is reinforced by its own failures… until all collapses.

sorry for my clumsy english, I’m unable to find my dictionnary in the mess of my flat.

M E Hoffer July 20, 2006 at 10:02 am

Nyarlthotep,

Worry not about you English skills, you communicate better than many “native speakers”.

Artisan,

How is this :”Belgium took ten years to go from 115% to 95% government spending of the GNP. the third worse score in Europe, before Italy and Greece.”– possible?

Gov’t spending=115% of GNP ?
Isn’t that like a stock declining by 140% ?

Artisan July 20, 2006 at 5:15 pm

Ooops Thanks Mister Hoffer, you are right. I meant to say, Belgian Government had a public debt equivalent to 115% of its GDP, while, according to the CIA(!) , the US is at level 67% for instance and Germany at 68%

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