“François Hollande wants fewer rich people. I want fewer poor people”. This statement by Nicolas Sarkozy during the 2012 presidential campaign, although a caricature, foreshadowed the unease felt by France’s wealthiest only after a few months of Hollande as President.
Confronted by a rise in unemployment (that blithely exceeds 10%) and moribund economic prospects (a growth of 0.1% is expected for 2013), the less fortunate of French citizens are becoming more and more likely to criticize the owners of magnificent apartments in Paris’s eighth district, or the owners of fat bank accounts.
The Sarkozy years, marked by a non-dissimulated proximity of the high spheres of power with some major shareholders of CAC 40 (the French stock exchange) companies, are very fresh in people’s minds. This contributes to the pejorative image of the rich: being wealthy is perceived as something that is dubious, or even dishonest.
In this unfavorable environment, the privileged few are exposed to considerable fiscal sanctions. Taxes on the wealthiest estates have been greatly increased for 2013. The wealth tax (Impot Sur la Fortune), lightened by Nicolas Sarkozy, was planned to be substantially augmented as well. However, the Constitutional Council, in an unexpected decision, rejected this project, That being said, the government is already working on a way to circumvent this obstacle for 2014.) Many public personalities, such as Serge Dassault, the UMP deputy and defense industry industrial, see the accumulation of taxes as fierce fiscal measures, and denounce their “confiscatory” nature.
This discontent appears to be well-founded, at least for the few thousands with the biggest assets – but with moderate revenues – who pay at times more than 85% of taxes. The economic opportunity of these measures is also called into question, given that these additional taxes do not really increase the State’s capital. They can however discourage foreign investment towards France, or cause investors to leave in a time where economic recovery should be a priority.
Recent fiscal exiles to Belgium, such as the one of Bernard Arnault, CEO of luxury group LVMH, or the spectacular departure of actor Gérard Depardieu, accentuate the mistrust towards French fortunes. A veritable witch-hunt targets those suspected of fleeing the homeland to better manage their assets. In a populist impetus, a socialist deputy even briefly proposed to strip these renegades of their nationality: a measure which entirely contradicts international law.
In a more pragmatic approach, legislation to reduce the advantages of French citizens living in Switzerland has been announced. The latter country is well-known for its imposing mountainous landscapes and for the forgiving nature of its taxes. The United Kingdom is another vogue destination: the French government, haunted by the possibility of more departures, has little appreciation for David Cameron inviting unhappy French citizens to emigrate in the UK.
Economic weakness, debates around taxes, and fiscal exile are factors that contribute to a fracture between the general population and its richest faction. Instead of inciting that faction to play an active role in the economic recovery and allaying sterile tensions, the government stigmatizes French fortunes, thus worsening the country’s socio-economic situation.
– Théo Bourrelier (translated from French by Matthieu Charriaud)
(Featured photo: Patrick Peccatte, Creative Commons, Flickr)