Free Republic
Browse · Search
News/Activism
Topics · Post Article

Skip to comments.

Taxed to the Point of No Recovery; France Plans Tougher "Exit Tax"
Townhall.com ^ | December 6, 2013 | Mike Shedlock

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 "The exit tax was established in 1999, repealed in 2005, then reintroduced in the first Amended Finance Act for 2011.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. You’ve 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 France’s confiscatory taxes that’s 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. He’s planning to raise an additional €20 billion in 2013. That’s €55.5 billion in new tax revenue in four years, with more than half of the total collected from businesses.

And there’s 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 isn’t 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



TOPICS: Business/Economy; Culture/Society; Editorial
KEYWORDS: europeanunion; france; francoishollande; fransoishollande; hollandetaxhike; socialism; socialisteconomy

1 posted on 12/06/2013 12:34:05 PM PST by Kaslin
[ Post Reply | Private Reply | View Replies]

To: Kaslin

Left wing governance has devastated the west. Its long past time to try something different.


2 posted on 12/06/2013 12:37:58 PM PST by skeeter
[ Post Reply | Private Reply | To 1 | View Replies]

To: Kaslin

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.


3 posted on 12/06/2013 12:38:04 PM PST by Gen.Blather
[ Post Reply | Private Reply | To 1 | View Replies]

To: Kaslin

“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.”


4 posted on 12/06/2013 12:38:28 PM PST by SandRat (Duty - Honor - Country! What else needs said?)
[ Post Reply | Private Reply | To 1 | View Replies]

To: Kaslin

Maybe the should do what Gerard Depardieu did... head to Russia. The women are prettier there, and don’t have any dental problems!


5 posted on 12/06/2013 12:42:31 PM PST by Cowboy Bob (They are called "Liberals" because the word "parasite" was already taken.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: SandRat

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.


6 posted on 12/06/2013 12:43:21 PM PST by Forward the Light Brigade (Into the Jaws of H*ll)
[ Post Reply | Private Reply | To 4 | View Replies]

To: Kaslin

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.


7 posted on 12/06/2013 12:43:42 PM PST by Maine Mariner
[ Post Reply | Private Reply | To 1 | View Replies]

To: Cowboy Bob
The women are prettier there, and don’t have any dental problems!

Man is that true

8 posted on 12/06/2013 12:48:03 PM PST by Regulator
[ Post Reply | Private Reply | To 5 | View Replies]

To: Kaslin
That sounds like a great idea.

“You can go but leave your money here”

is that even enforceable?

9 posted on 12/06/2013 12:49:01 PM PST by sickoflibs (Obama : 'If you like your Doctor you can keep him, PERIOD! Don't believe the GOPs warnings')
[ Post Reply | Private Reply | To 1 | View Replies]

To: Gen.Blather

The scenario you describe sounds chillingly like what the German Jews started doing in the 1930’s.


10 posted on 12/06/2013 12:49:39 PM PST by Hardastarboard (Temporary tag line - RIP Paul Walker)
[ Post Reply | Private Reply | To 3 | View Replies]

To: Kaslin

Maybe Sharia law will fix the problem.


11 posted on 12/06/2013 12:51:24 PM PST by Navy Patriot (Join the Democrats, it's not Fascism when WE do it, and the Constitution and law mean what WE say.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: Kaslin

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.


12 posted on 12/06/2013 12:52:10 PM PST by Regulator
[ Post Reply | Private Reply | To 1 | View Replies]

To: Kaslin

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.


13 posted on 12/06/2013 12:52:11 PM PST by Pearls Before Swine
[ Post Reply | Private Reply | To 1 | View Replies]

To: sickoflibs

It was typically about $50,000 to leave the old Soviet Union.

I know Russian Jews who gladly paid it.


14 posted on 12/06/2013 12:53:14 PM PST by Regulator
[ Post Reply | Private Reply | To 9 | View Replies]

To: Gen.Blather

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.

__________________

I personally know a white SA couple that did it with diamonds. It got pretty crazy in South Africa for awhile it seems.


15 posted on 12/06/2013 12:53:40 PM PST by Tulane
[ Post Reply | Private Reply | To 3 | View Replies]

To: Kaslin

This would be easy in a country like Cuba, North Korea, Venezuela, or Zimbabwe where the currency isn’t really convertible anyway.


16 posted on 12/06/2013 12:56:50 PM PST by GeronL (Extra Large Cheesy Over-Stuffed Hobbit)
[ Post Reply | Private Reply | To 1 | View Replies]

To: Gen.Blather

I guess they could try buying bitcoins....


17 posted on 12/06/2013 12:58:01 PM PST by GeronL (Extra Large Cheesy Over-Stuffed Hobbit)
[ Post Reply | Private Reply | To 3 | View Replies]

To: Regulator

I vaguely remembered that but not the details.

was that $50K in communist currency?

Or did they have to get dollar based donations?


18 posted on 12/06/2013 12:59:41 PM PST by sickoflibs (Obama : 'If you like your Doctor you can keep him, PERIOD! Don't believe the GOPs warnings')
[ Post Reply | Private Reply | To 14 | View Replies]

To: Regulator
But now a days dont the French rich put their money in foreign banks?
Does the EU enforce French tax laws?
19 posted on 12/06/2013 1:01:34 PM PST by sickoflibs (Obama : 'If you like your Doctor you can keep him, PERIOD! Don't believe the GOPs warnings')
[ Post Reply | Private Reply | To 14 | View Replies]

To: Kaslin

They’ll have to flee France in balloons, like they did in East Germany.


20 posted on 12/06/2013 1:04:03 PM PST by dfwgator (Fire Muschamp. Go Michigan State!)
[ Post Reply | Private Reply | To 1 | View Replies]

To: Gen.Blather
Yep. Leftards just don't understand that they cannot repeal the laws of economics.

There is a reason that Russians, Cubans, Jews, Chinese and other refugees from libtard hell holes turn out to be some of the best capitalists in the world.

21 posted on 12/06/2013 1:07:27 PM PST by Vigilanteman (Obama: Fake black man. Fake Messiah. Fake American. How many fakes can you fit in one Zer0?)
[ Post Reply | Private Reply | To 3 | View Replies]

To: sickoflibs

It worked out to 50K in USD according to people I knew who paid it


22 posted on 12/06/2013 1:08:46 PM PST by Regulator
[ Post Reply | Private Reply | To 18 | View Replies]

To: Regulator

I am just wondering if they were communist currency and if it was worth anything outside of communist countries.

It wasnt the EURO


23 posted on 12/06/2013 1:10:58 PM PST by sickoflibs (Obama : 'If you like your Doctor you can keep him, PERIOD! Don't believe the GOPs warnings')
[ Post Reply | Private Reply | To 22 | View Replies]

To: sickoflibs

I guess there is a reason that the communist bloc used to trade commodities for commodities, they didn’t even accept each others currencies.


24 posted on 12/06/2013 1:12:54 PM PST by GeronL (Extra Large Cheesy Over-Stuffed Hobbit)
[ Post Reply | Private Reply | To 23 | View Replies]

To: Kaslin

The semifinal step for all collectivists, taxing people for fleeing your utopia. The French wall can’t be far behind.


25 posted on 12/06/2013 1:13:14 PM PST by ArmstedFragg (hoaxy dopey changey)
[ Post Reply | Private Reply | To 1 | View Replies]

To: Pearls Before Swine
If you live abroad and you are a US citizen, you have to pay taxes to the US

Not entirely true. I lived in Germany for 12 years and only paid taxes over $90k from working for a US company abroad...given you stay out of the country for 330 days...GET ME OUTTA HERE!

26 posted on 12/06/2013 1:41:50 PM PST by gr8eman (Bandying nice with wannabe commies is over! You're either for freedom or you're not!)
[ Post Reply | Private Reply | To 13 | View Replies]

To: Kaslin

So they get them coming and going.


27 posted on 12/06/2013 2:08:21 PM PST by Uncle Chip
[ Post Reply | Private Reply | To 1 | View Replies]

To: Uncle Chip

It sure looks that way


28 posted on 12/06/2013 2:16:10 PM PST by Kaslin (He needed the ignorant to reelect him, and he got them. Now we all have to pay the consequenses)
[ Post Reply | Private Reply | To 27 | View Replies]

To: gr8eman

You’re talking about the overseas cost of living exemption. I suppose I could have mentioned it, but the point is that other countries don’t tax foreign earnings at all. The US is much more aggressive about that.


29 posted on 12/06/2013 2:39:45 PM PST by Pearls Before Swine
[ Post Reply | Private Reply | To 26 | View Replies]

To: Kaslin

This is pretty funny actually due to the unintended consequences. In another 15-20 years, countries with a birth deficit like France are going to be begging for young, fertile, well-educated people. You can try tax wealth but good luck in taxing skills once the people possessing them leave.


30 posted on 12/06/2013 5:40:30 PM PST by RKBA Democrat ( There is no worst president but owebama, and valerie jarrett is his prophet.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: Forward the Light Brigade

“France will go neo-fascist.”

???????


31 posted on 12/06/2013 6:24:46 PM PST by ripley
[ Post Reply | Private Reply | To 6 | View Replies]

To: Gen.Blather

Another dodge I heard of was buying a yacht, sailing away in it and selling it abroad. A certain amount of risk involved, but effective.


32 posted on 12/06/2013 9:23:43 PM PST by coydog (Time to feed the pigs!)
[ Post Reply | Private Reply | To 3 | View Replies]

Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.

Free Republic
Browse · Search
News/Activism
Topics · Post Article

FreeRepublic, LLC, PO BOX 9771, FRESNO, CA 93794
FreeRepublic.com is powered by software copyright 2000-2008 John Robinson