..a sharp increase in taxes on capital gains from the sales of stock and company stakes is pushing most people to leave, according Didier Bugeon, head of the wealth manager Equance.
French entrepreneurs have complained vociferously against a proposal in the Socialist's 2013 budget to increase the capital gains tax on sales of company stakes, which they argue will kill the market for innovative start-up companies in France.
They say a stiff increase in capital gains tax would remove incentives to do this in France. They also argue that capital has already been taxed several times in the making.
The French government did wind up "backtracking" on the hefty tax increase on the sale of a company, and the 75% tax is now only for two years, but people are still packing up and moving. Actually they started moving in anticipation of an Hollande win, and are now following through with it.
And it's not just businesses, French actor Gerard Depardieu (a Nicolas Sarkozy supporter, it turns out) is planning on moving to Belgium where the taxes aren't quite so exorbitant. His decision so infuriated the French government, that its criticism led to Depardieu writing a scathing letter which was published in the Journal du Dimanche. Addressed to Prime Minister Jean-Marc Ayrault, who called Depardieu "pathetic" for wanting to move to Néchin, Belgium and take all his money with him, it said, in part:
He also wrote:
"I am handing over to you my passport and social security, which I have never used," he said. "We no longer have the same homeland, I am a true European, a citizen of the world, as my father always taught me to believe."
He concludes: "Despite my excesses, my appetite and love for life, I am a free being, Sir, and will remain polite."
"Unfortunately there's nothing left for me to do here, but I will continue to love the French, the public with whom I've shared so many emotions! I leave because you consider that success, creation, talent, difference, in fact, should be sanctioned."
Bottom line Depardieu doesn't want to live in a socialist country that is going to tax the bulk of his earnings, which is unfortunate for France since he had 80 people working for him. Plus he claims he has paid over 145 million Euros in taxes during the past 45 years that he's been working. He also allegedly paid 85% tax on his 2012 income. That's a lot of tax monies that France will no longer have.
Naturally the leftists would be apoplectic, after all, who else is going to fill those coffers to pay for all their social programmes if all the rich bail. Some call those leaving 'traitors'. Socialist Aurelie Filippetti, minister of culture, likened Depardieu's abandoning ship to:
"deserting the field in the middle of a war against the [economic] crisis," and that "French citizenship is an honour, and includes rights and also duties, which include the ability to pay taxes."
The conservatives there, however, know the consequences of overly taxing the rich.
"We're losing the rich, like Gerard Depardieu, and the poor feel betrayed," said Rama Yade, a former Sarkozy minister, and vice president of the moderate conservative Radical Party, referring to workers at factories expected to close down. "France is the one getting weakened, and its future is being sold off cheaply," she said.Sound familiar? The U.S. should take heed before the mass exodus of our rich, since that has already started to happen.
Ironically, a bunch of the rich and famous of France had banded together to petition to be taxed a higher percentage:
“We are conscious of having benefited from a French system and a European environment that we are attached to and which we hope to help maintain,” wrote the group, which included the chief executives of Air France-KLM and Société Générale, and the billionaire heiress to the L’Oréal fortune, among others. “When the public finances deficit and the prospects of a worsening state debt threaten the future of France and Europe and when the government is asking everybody for solidarity, it seems necessary for us to contribute.”That is, until they realized how high.