- Obama takes aim at ‘corporate deserters’
- Dick’s Sporting Goods lays off 478 PGA golf pros
- Senators: Cease-fire must allow Israel to defend against rockets, tunnels
- Sierra Leone doctor fighting Ebola catches disease
- Iraq welcomes Russian fighter jets, helicopter gunships into ISIL fight
- John McCain laments: Obama’s ‘self-pity … is really kind of sad’
- GOP offer to fix VA gives $10 billion in emergency funds
- Paul Ryan offers to repair U.S. economic safety net with a single grant stream
- Kim Jong-un builds bond with Putin: $250M Russia-backed addition to key port opens
- Pope Francis meets Meriam Ibrahim, a Sudanese woman sentenced to death
Sarkozy cuts tax on French fortunes
Question of the Day
PARIS — French President Nicolas Sarkozy is rolling out the welcome mat for thousands of rich French people who fled one of Europe’s most onerous tax regimes, but few may heed his call.
In his first economic act since taking office, Mr. Sarkozy is pushing a tax law to lure back exiles such as rock star Johnny Hallyday, 64, and members of the Mulliez clan, who control the French retailer Groupe Auchan SA. The measure will increase exemptions on the “fortune” tax — the bete noire of rich expatriates — and cap the total individual tax rate at 50 percent of income.
Mr. Sarkozy, 52, needs these wealth-creators to help rekindle an economy that’s lagging behind its neighbors and to sustain future growth.
One challenge may be changing a centuries-old French attitude that regards people who make money with suspicion. That view has made penalizing the rich popular in France and leaves the wealthy uneasy about whether any pro-rich policies can last.
“In France, to earn a lot of money is to be seen as a little bit criminal,” says author Anne-Marie Mitterrand, who moved to Belgium in 1997. “In Belgium, the mentality is completely different. People who have a little money are not regarded as thieves.”
French suspicion of wealth runs deep. Finance Minister Christine Lagarde, 51, traces it to French aristocrats who turned up their noses at people who earned their fortunes.
Even the French Revolution of 1789 didn’t change that: “The Right to Laziness,” a 19th-century book by Paul Lafargue, Karl Marx’s son-in-law, advised against working more than three hours a day. And French author Honore de Balzac said, “Behind every great fortune lies a crime.”
Angry at paying more than 72 percent of his income in taxes, he moved to the ski resort of Gstaad in December, generating considerable publicity in the process. After Mr. Sarkozy’s May election, Mr. Hallyday hinted he might come back.
Households fleeing the fortune tax climbed to a record 649 in 2005 from 370 in 1997, according to a study by French Sen. Philippe Marini.
A study by the Economic Analysis Council, which advises the government, says about 10,000 business directors fled in the past 15 years, taking as much as $137 billion in capital to invest elsewhere.
These “are not people living off their interest but entrepreneurs and investors who are needed by France’s small and medium businesses,” Mr. Marini said in his February report. Losing them means “a loss of economic dynamism” for France, he wrote.
The French economy is set to expand 2.2 percent this year, compared with 2.7 percent for other euro-based economies, according to the Organization for Economic Cooperation and Development.
But Francois Micheloud, a Lausanne lawyer who helps clients settle in Switzerland, says he doubts French exiles will return any time soon because they distrust government tax policies.
By Michael Widlanski
Leveling the battlefield to aid terrorists enables evil to fight on
- 'We're coming for you, Barack Obama': Top U.S. official discloses threat from ISIL terrorists
- NAPOLITANO: What if our democracy is a fraud?
- Hamas rejects Kerry's call for cease-fire; Fears grow others could join fight against Israel
- Evidence shows Russia firing artillery into Ukraine: Pentagon
- Cutler wins endorsement from gun control group
- Obama orders Pentagon advisers to Ukraine
- Algerian plane diverted due to storms, second aircraft: 116 missing
- Man says he shot burglar who said she was pregnant
- CARSON: Costco and the perils of mixing politics and business
- Obama's empty tough-talk: Gun prosecutions plummet on his watch
Obama's biggest White House 'fails'
Celebrities turned politicians
Athletes turned actors
20 gadgets that changed the world
Fighting in Iraq