Skip to comments.Taxed to the Point of No Recovery; France Plans Tougher "Exit Tax"
Posted on 12/06/2013 12:34:04 PM PST by Kaslin
In a feudal as well as futile attempt to keep wealthy French citizens from leaving the country, France hikes the "Exit Tax" on transfers of wealth to outside of France. They also lower the base and increase the number of things on which the tax applies.
According to a "pay-walled" article on Le Monde of which I can only read a part ... "The exit tax was established in 1999, repealed in 2005, then reintroduced in the first Amended Finance Act for 2011. The law was intended to limit the temporary exile of entrepreneurs wanting to sell their stakes in more favorable tax conditions than under domestic law."
Reader Bran informs me the the article states they plan to integrate collective investment in realty into the realm of the exit-tax.
Taxed to the Point of No Recovery
Here are some pertinent points on exit taxes and taxes in general by Veronique de Rugy writing for the National Review: France to Beef Up Its Exit Tax.
The French government seems committed to taxing itself beyond the point of no recovery. Youve heard me talk about how over the years, and in particular over the last four years, France has relied heavily on tax increases in trying to contain its huge deficits. Everyone knows about how President Hollande campaigned for and then proposed a 75 percent tax rate on personal income above 1 million.
One aspect of Frances confiscatory taxes thats often overlooked by Americans is that previous President Nicolas Sarkozy was almost as bad as Hollande when it came to raising taxes. In fact, data compiled by taxpayers watch groups and newspapers show that between 2007 and the end of 2012, taxpayers were subjected to 205 separate increases in their tax burden, from excise levees on televisions, tobacco, and diet sodas to multiple increases in the capital taxes and a wealth-tax hike. Sarkozy is also responsible for increasing the top marginal income tax rate from 40 to 41 percent in 2010, and again, to 45 percent, in 2012.
Le Monde published a special report in September 2013 in which the liberal newspaper used data from the Ministre des Finances to show that, since 2009, under both Presidents Sarkozy and Hollande, 84 new taxes have been instated. The article also notes that Sarkozy increased tax revenue by 16.2 billion in 2011 and 11.7 billion in 2012, while Hollande added another 7.6 billion on top of that as soon as he was elected. Hes planning to raise an additional 20 billion in 2013. Thats 55.5 billion in new tax revenue in four years, with more than half of the total collected from businesses.
And theres more: The French government has also announced that it will beef up the exit tax, a tax first implemented by Sarkozy in 2012 intended to slow the pace of people leaving the country for tax reasons. The exit penalty taxes capital gains at the rate of 19 percent and adds a 15.5 percent payroll-tax-like penalty. The tax isnt paid as taxpayers exit the country, but people have to pay the tax if they sell their assets within eight years after their exit.
Tax Policy Theory and Results
Tax News reports France Plans Tougher 'Exit Tax'
The French National Assembly Finance Committee has adopted an amendment to the country's 2013 year-end supplementary finance bill, toughening the so-called "exit tax."
Since March 3, 2011, French taxpayers with wealth in excess of EUR1.3m, electing to transfer their fiscal residence abroad, are subject in France to a tax on latent capital gains crystallized at the time of their departure, if they cede the assets within eight years.
Significantly tightening the existing provisions, the adopted parliamentary amendment provides that the threshold for application of the levy should be lowered to EUR800,000.
Furthermore, the measure stipulates that the tax should be due if taxpayers cede their assets within 15 years following their expatriation, rather than eight.
Despite the tough stance, the measure is expected to have very little impact on the public finances. Last year, the exit tax served to yield a meagre EUR53m for the state.
French Flee a Nation in Despair
Inquiring minds may wish to consider an excellent article on flight from France on the Telegraph referenced by the National Review: Down and Out: the French Flee a Nation in Despair. Here is the opening statement:
The failing economy and harsh taxes of François Hollande's beleaguered nation are sending thousands packing - to Britain's friendlier shores.
By 2014, France's public expenditure will become the world's highest, at 57 per cent of GDP Photo: Howard McWilliam
Left wing governance has devastated the west. Its long past time to try something different.
Several years ago I spoke with a South African businessman. He was slipping his money out of SA by buying antiques abroad. He’d buy one fake and one real and send the real one to America and the fake to SA. That way, no tax. His plan was to eventually get all of his wealth out and leave. (The SA government was trying to keep whites from leaving with their money. They didn’t care if they left, they just wanted their wealth to stay.) The French will get it out somehow. They may buy gold and just take it out a bit at a time and deposit it in Britain.
“We contend that for a nation to tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle.”
Maybe the should do what Gerard Depardieu did... head to Russia. The women are prettier there, and don’t have any dental problems!
Worry not—the right wing will be in power soon and these taxes will evaporate like mist in the sunlight. Its not going to be a good day for Unions and Islamic people. Watch as a movement cleans house. France will go neo-fascist. Factories will bloom once again. france will be just the first—other nations will follow—even england and Germany.
And course such a tax will really encourage young French entrepreneurs and businessmen and businesswomen to stay in France and grow their firms. sarc/ Yes the older established business people may stay but the new creative class will leave before they have much to accumulate.
The solution in France: an exit tax just for leaving.
Man is that true
“You can go but leave your money here”
is that even enforceable?
The scenario you describe sounds chillingly like what the German Jews started doing in the 1930’s.
Maybe Sharia law will fix the problem.
An Exit Tax is a Marxist idea based on the notion that everything you have comes from the State.
Hussein was making reference to that concept when he said “you didn’t build that”.
It’s the assumption that the State owns you, and private property does not exist...only the communal property of the Party and the State...which are of course identical.
It’s the rhetoric of gangsters and thugs, and ultimately feudalism...which also are the same thing.
France’s feudalists are the Leftists themselves, who descend from the old aristocracy, and merely adopt the rhetoric of Marx and Rousseau to justify their personal privilege, power and income.
BF Deal. It’s not any better here.
Our highest marginal tax rate on ordinary income is 43% with the Obamacare tax thrown in, and that’s just Federal. States have taxes too, averaging around 5 or 6%.
If you forfeit US citizenship, it’s a taxable event. Our highest Federal Tax on capital gains is 23.8%, higher than France’s.
If you live abroad and you are a US citizen, you have to pay taxes to the US (although there are some living allowances and credits for taxes paid to the country in which you are earning). France doesn’t have that.
What France may have that we don’t have is the $1 million plus earners tax. Hollande tried 75%, but that was held to be too much by the courts.
They also have the VAT, which is higher than most of our sales taxes.
Most developed countries have VERY hungry governments.
It was typically about $50,000 to leave the old Soviet Union.
I know Russian Jews who gladly paid it.
Several years ago I spoke with a South African businessman. He was slipping his money out of SA by buying antiques abroad. Hed buy one fake and one real and send the real one to America and the fake to SA. That way, no tax. His plan was to eventually get all of his wealth out and leave. (The SA government was trying to keep whites from leaving with their money. They didnt care if they left, they just wanted their wealth to stay.) The French will get it out somehow. They may buy gold and just take it out a bit at a time and deposit it in Britain.
I personally know a white SA couple that did it with diamonds. It got pretty crazy in South Africa for awhile it seems.
This would be easy in a country like Cuba, North Korea, Venezuela, or Zimbabwe where the currency isn’t really convertible anyway.
I guess they could try buying bitcoins....
I vaguely remembered that but not the details.
was that $50K in communist currency?
Or did they have to get dollar based donations?
They’ll have to flee France in balloons, like they did in East Germany.