Making the rich flee
Sheesh! Successful people in France are getting a lot of grief lately.
As it goes, socialist French President François Hollande has raised the tax rate on those earning more than $1.3 million to 75 percent.
Hollande has decided that $1.3 million is enough for the rich to be rich and they only need to keep 25 percent of their earnings beyond that.
The rich, however, are telling Hollande to pound salt. According to many reports, French actor Gerard Depardieu has put his home in France on the market and set up residence in a small village in neighboring Belgium.
Belgium's tax rate for those as rich as Depardieu is still high at 50 percent, but even an English major like me knows that rate is 25 percent less than the rate France is demanding.
Besides, says the U.K. newspaper The Telegraph, Belgium doesn't impose wealth taxes on citizens or capital gains taxes on private fortunes, as France does — thus, 2,800 well-to-do French people have chose to reside there.
Hollande's high taxes are producing tremendous economic activity, however — in French real estate. Listings of the homes of the well-to-do, which hardly ever go on the market, have soared — and the value of those homes has dropped.
Hollande has a real mess on his hands. According to The Economist, France is the next ticking time bomb. Its government is spending far more than it is taking in — France's debt has grown from 22 percent to 90 percent of GDP in the last 20 years. Its economy is stalled. Business investment is way down.
“French firms are burdened by overly rigid labor- and product-market regulation, exceptionally high taxes and the euro zone's heaviest social charges on payrolls,” says The Economist. “Over 10% of the workforce, and over 25% of the young, are jobless. The external current-account deficit has swung from a small surplus in 1999 into one of the euro zone's biggest deficits. In short, too many of France's firms are uncompetitive and the country's bloated government is living beyond its means.”
Who do the French think they are? Americans?
Because much like the United States, France is out to “get” its most successful citizens — even though doing so will do very little to balance the books, but will happily contribute to further hobbling the economy.
Hollande's 75-percent tax rate is expected to bring in 200 million euros, about $261 million — a drop in the bucket — and that assumes any of the rich stick around to pay it.
Many of the rich are voting with their feet. They are moving to lower-tax regions and countries. This has really upset French Prime Minister Jean-Marc Ayrault, who said such moves are pathetic and unpatriotic.
Au contraire, Jean-Marc! What is unpatriotic is to divide your people — to pit rich against poor. What is unpatriotic is to assume that you, through the levers of government power, have the right to take the lion's share of what one person has earned and give it to many others who haven't, so those others will vote for you in the next election.
Who do you think you are? President Barack Obama?
But c'est la vie! It is an old story of political and government avarice. This is what a collapsing civilization always comes to in the end.
Sooner or later, you can no longer borrow or take enough of other people's money and the entire government apparatus falls under its own weight.
We have yet to learn this in America, which is why so many fools keep voting for it.
Now America is fast headed the way of France. How long will it be before taxes on the rich are increased to 75 percent here?