7/05/2012

Any bets that the French will get a lot less than the amount of money they think that they are going to raise from taxes?

Tax competition means that some people will be leaving France.
David Cameron infuriated the French last month by promising Britain would "roll out the red carpet" to wealthy French citizens and companies who wanted to emigrate and pay their taxes in Britain. . . .
A 75 percent income rate and higher wealth and inheritance taxes will have consequences.

“I’m very happy in Paris. My wife and I love Paris. We came here by choice. But I’m reconsidering our situation given the changes in the pipeline,” says Roger, who declined to be identified by his real name.
More than the 75 per cent rate, it is a move to higher wealth and inheritance taxes that worries him – and what he perceives as a cultural hostility to the rich. “The anti-wealth rhetoric is just not encouraging. I’d rather be in a country where I don’t have to deal with that,” he says. . . .
“The question is how to achieve these goals? There is no example, in modern economic history, of a country that has succeeded in reducing its deficits by bringing taxes to a confiscatory level. On the contrary, it leads to a decline in activity, and an increase in the deficits.” . . .
“France is not isolated from the rest of the world and Paris needs to be competitive,” says Guillaume Poitrinal, chief executive of Unibail-Rodamco, the European shopping mall group based in Paris. “[Our] large companies provide business to small and medium-sized enterprises and are France’s best asset – they provide a large part of what’s left of economic growth today.
“I am sure that the government realises that if they are weakened vis a vis their competitors abroad, this would be a negative for employment, tax resources and economic growth.” . . . .

At least Hollande isn't a complete idiot.  Note how he is retroactively heavily taxing property owned by foreigners, that is at least if he can get away with it given the EU single market laws.  If he can get away with it, foreigners don't vote.
On Wednesday (July 4th), the French government announced it was to increase taxes on foreign-owned second homes. Tax on rental income would rise from 20 per cent to 35.5 per cent, and capital gains tax on property sales would rise from 19 per cent to 34.5 per cent. The extra in each case is being labelled a "social charge".
A Treasury source said on Wednesday night: "We will need to study the details. But we will of course challenge any proposal which breaches European single market laws and anti-discrimination rules." . . . 
The rise in tax on rental income will be retrospective, from Jan 1 this year. . . .

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