During his campaign for president, France’s Socialist President Francois Hollande famously declared “I don’t like the rich” and upon taking office hit the wealthy with a 75% tax rate — a rate that I have criticized as economically foolish and part of an increasing demonization of the wealthy around the world. Now wealthy French citizens have responded predictably by moving out of France and last week famed French actor Gerard Depardieu joined the exodus. The steady stream of departures has left the Hollande government incensed and this week Prime Minister Jean-Marc Ayrault blasted the rich. The English have also seen the same decline in wealthy taxpayers after it imposed a 50% tax. They are now going to reduce that tax after the departure of many wealthy Brits and David Cameron controversially pledged to “roll out the red carpet” for any French residents fleeing the massive tax hike. In the meantime, anger at the wealthy continues to rise in France, where “eat the rich” signs are appearing. The problems is that you cannot eat the rich if the rich flee before the meal.
Depardieu is not going to a tax haven. He is reportedly moving to Belgium which has a 50 percent taxation rate. He is moving to Nechin, a town just a kilometer inside Belgium near the French city of Lille.
Bertrand Delanoe, the Socialist mayor of Paris regretted the move because Depardieu “is a generous man but in this instance he is not showing that.”
Politicians often assume that higher taxes have no impact on market behavior for earners. However, such taxes often make no investments less attractive once the labor and time is factored into the lower rate of net profit.
While I am in the minority on this blog, I continue to be concerned over the economic impact of such confiscatory tax rates and the demonization of the wealthy. A 75% tax rate will not only encourage many French to leave the country or find ways to avoiding direct income, but it will discourage those who might become French citizens. I also fail to understand the increasing vilification of the wealthy which is defined as anyone making over $250,000 a year (as defined by the Administration’s proposed tax hike on the rich). Many of such earners are active in community work and supporting social programs. They also pay the vast majority of taxes in this country. Will they have to pay more, yes. However, the suggestion that they are all deadbeats who do not pay their fair share is unfair in my view.
In the meantime, the exodus is likely to continue and brings new meaning to the statement of Georges Danton: “At last I perceive that in revolutions the supreme power rests with the most abandoned.”
Source: France 24
Elaine, Grab your signboard and head to Michigan. You’re losing another state to that horrible right to work travesty. The honest chant should be, “NO CHOICE, NO CHOICE, NO CHOICE.” But, that doesn’t sound good, does it?
Woosty,
You’re right on the money!
BTW, how come no one calls it class warfare when some of the greedy mega-rich use their money to get anti-worker legislation…to eliminate collective bargaining for public workers…to bust unions…to buy politicians who will work to privatize/eliminate social programs like Medicare and increase the age at which the elderly can receive the full benefits of Social Security. These same people don’t give a damn about the number of children and elderly and working class folks living in poverty or near the poverty level.
Maybe France needs to build their version of the Berlin Wall. Hopefully, they won’t use the Maginot Line blueprint.
The tea party had two factions, the religious zealots and the fiscally radical libertarians. Only the religious faction has proven least useful in the last general election to the true conservative agenda. If it comes to a battle between which side remains, it will be the latter. They have already gained what they needed from the false religious segment of society; namely, to give money the appearance of righteousness despite it being the “root of all evil.”
http://www.salon.com/2012/12/11/koch_brothers_tea_party_cash_drives_michigan_right_to_work_bill/ Snyder benefited from Koch Bros funded pack. The tea party is not dead.
Great point, anonymous. It is becoming more and more evident that governments are powerless against the mad money machine. Governments have throughout history served as the strong arm for the wealthy bandits. The real culprit behind the monetary system exposes the greater evil causing senseless poverty, sickness and death around the globe. Currently it is twisting the arm of America to become more “business friendly” which is code for creating sweatshop-like conditions like the tyrannical nations have already been providing to them.
Let’s not forget that General Petraeus comment to a Fox “analyst” showing the “growth” is in the intelligence sector. Growth for the sake of growth is a cancer and it is destroying our people and therefore our nation.
I remember in 2008 I asked a friend who was a one-percenter why the wealthy could not be asked to simply hold onto their stocks and ride the storm so that they could increase America’s strength. He was horrified. He said, “You can’t do that; it would interfere with the market!” I wonder: If it’s OK to make someone sacrifice for the country’s strength when that person makes $24,000 per year and has a net worth of negative $4,000, how is it not fair to ask the one percent to sacrifice for the country’s strength?
Are we just nuts or stupid or what?
Mike S., I especially liked your earlier comment — we quickly forget that the so-called “class war” has two sides, and that it has been waged for decades by those at the top of the heap, and the “class war” canard pulled out whenever the rest of us resist or propose an alternative.
Barkin, re: The Economist (the second post in this thread), they have been predicting France’s immanent demise for decades — I think they simply cannot fathom that France has been essentially successful by following something other than the US-British (or, as the French would have it, Anglo Saxon) economic model. There is more than an undercurrent of the ancient rivalry between France and the UK in the pages of The Economist in that paper’s coverage of affairs across La Manche.
http://www.nytimes.com/2012/12/12/opinion/hsbc-too-big-to-indict.html?hp
Editorial
Too Big to Indict
Published: December 11, 2012
It is a dark day for the rule of law. Federal and state authorities have chosen not to indict HSBC, the London-based bank, on charges of vast and prolonged money laundering, for fear that criminal prosecution would topple the bank and, in the process, endanger the financial system. They also have not charged any top HSBC banker in the case, though it boggles the mind that a bank could launder money as HSBC did without anyone in a position of authority making culpable decisions.
Clearly, the government has bought into the notion that too big to fail is too big to jail. When prosecutors choose not to prosecute to the full extent of the law in a case as egregious as this, the law itself is diminished. The deterrence that comes from the threat of criminal prosecution is weakened, if not lost.
In the HSBC case, prosecutors may want the public to focus on the $1.92 billion settlement, which includes forfeiture of $1.26 billion and other penalties, as well as requirements to improve its internal controls and submit to the oversight of an outside monitor for the next five years. But even large financial settlements are small compared with the size of international major banks. More important, once criminal sanctions are considered off limits, penalties and forfeitures become just another cost of doing business, a risk factor to consider on the road to profits.
There is no doubt that the wrongdoing at HSBC was serious and pervasive. Several foreign banks have been fined in recent years for flouting United States sanctions against transferring money through American subsidiaries on behalf of clients in countries like Iran, Sudan and Cuba. HSBC’s actions were even more egregious. According to several law enforcement officials with knowledge of the inquiry, prosecutors found that, for years, HSBC had also moved tainted money from Mexican drug cartels and Saudi banks with ties to terrorist groups.
Those findings echo those of a Congressional report, issued in July, which said that between 2001 and 2010, HSBC exposed the American “financial system to money laundering and terrorist financing risks.” Prosecutors and Congressional investigators were also alarmed by indications that senior HSBC officials might have been complicit in the illegal activity and that the bank did not tighten its lax controls against money laundering even after repeated urgings from federal officials.
Yet government officials will argue that it is counterproductive to levy punishment so severe that a bank could be destroyed in the process. That may be true as far as it goes. But if banks operating at the center of the global economy cannot be held fully accountable, the solution is to reduce their size by breaking them up and restricting their activities — not shield them and their leaders from prosecution for illegal activities. “
“6 Things Money Shouldn’t Be Able to Buy” (link posted by Mike S.)
I’d add another one: “One’s way out of jail”
“Where Are The Handcuffs Now? During S&L Crisis, Thousands Of Bankers Went To Jail”
First Posted: 10/19/09 06:12 AM ET Updated: 05/25/11 03:00 PM ET
http://www.huffingtonpost.com/2009/09/03/where-are-the-handcuffs-n_n_277063.html
Another example of why I’m no longer civil when it comes to the 1%. Their depredations make the Cosa Nostra and the Russian Mafia look like social reformers. They keep attacking inexorably and we are supposed to only answer them with respect and reasoned argument? I think we are well past that point.
http://www.politicususa.com/koch-puppet-governors-continue-dance-masters-rome-burns.html
OT? Or not… Ah the benefits that accrue to the wealthy and powerful:
HSBC, too big to jail, is the new poster child for US two-tiered justice system
“DOJ officials unblinkingly insist that the banking giant is too powerful and important to subject to the rule of law”
http://www.guardian.co.uk/commentisfree/2012/dec/12/hsbc-prosecution-fine-money-laundering
“The New York Times Editors this morning announced: “It is a dark day for the rule of law.” There is, said the NYT editors, “no doubt that the wrongdoing at HSBC was serious and pervasive.” But the bank is simply too big, too powerful, too important to prosecute.”
—–
(As to the 75% tax rate? It’s obscene.)
Some examples of why the “Class Warfare” being run by the rich deserves anger rather than civility:
http://www.alternet.org/economy/6-things-money-shouldnt-be-able-buy?page=0%2C1&paging=off
No, Swarthmore Mom, you had it right, “god” is the more appropriate way to refer to the sainted Bill Gates.
oops good things
“But it’s because of their political activity that the brothers Koch have recently gained notoriety. Together, they’re probably the nation’s biggest political donors. Nobody else — not George Soros, not Bill Gates, not even Sheldon Adelson — comes close. And their influence is everywhere. They’re major funders of two conservative think tanks, the Heritage Foundation and the Cato Institute. They’ve created pseudo-scientific research centers on many college campuses, like the Mercatus Center of George Mason University. They’re the sugar daddies behind two powerful political organizations, FreedomWorks and Americans for Prosperity — which is currently running anti-Obama TV ads in 10 states. They were the money bags behind the tea party. They put up the funds to oppose new mining safety regulations in West Virginia, overturn tough mileage standards in California, and elect Scott Walker in Wisconsin. And, by my count, they’re principal sources of funding for at least 57 conservative political action groups.
Indeed, their political empire is so vast it’s been called the “Kochtopus.” Charles Lewis, founder of the Center for Public Integrity, told the New Yorker’s Jane Mayer, “The Kochs are on a whole different level. There’s no one else who has spent this much money. … They are the Standard Oil of our times.” Chicago Tribune The Koch bros. are far far worse than Bill gates. The Bill and Melinda Gates Foundation does do some god things. The Koch bros. are in a league of their own.
Mespo, Context, context, context! I assume a measure of knowledge is possessed by anyone engaged on a blog such as this one. And yes, Bill Gates may not be as maniacal as the Koch brothers, but they still reap the same rewards. Wall Street is the tool by which all corporations open to public trading operates. Wall Street only differentiates between the moguls whose wealth it protects and the middle class savings group by whom they hedge their bets.
really its only fair that we approach on bended knee and plead with the wealthy to inform us how much they feel they should pay to support the government that made their wealth possible and protects them form the rabble that would take it from them.
Perhaps we could start with burnt offerings, perhaps a few old or disabled people, if the smell pleased them they may not be so deeply offended when we ask such an impertinent question.
Hmmm, I was just about to call Paul naive 😉
Mespo, I know you have said that the class warfare is rally a matter of envy. But, by their behavior, who do you think started this war?
While I take your points, and of course who can deny Edmund Burke was a sane man, there is an anger and emotion underlying the unfairness of our political economy that wont be talked down. It’s only going to get worse, but I am confident the rich will shelter themselves adequately. Emotions are seldom rational (duh), but a necessary leavening.
BTW, I don’t see all that much difference between Koch and Gates, but maybe it’s because I curse Gates every time anything goes wrong with my computer 😉
Amen, Paul.