Johnny Depp Flees France Over Tax Hikes

Townhall.com ^ | September 3, 2012 | Daniel J. Mitchell

[Kaslin]

I’m a bad person. I know it’s not nice to take joy in the misery of others, but I can’t help but smile when I see a story about bad news in France.

In my defense, this is not because of hostility to French people, who have always been friendly to me. Instead, France has become the global symbol of statism (particularly since Sweden has been moving in the right direction). The French, for instance, are increasingly infamous for class-warfare tax policy and onerous levels of intervention.

And since it’s my job to promote liberty, I’ll confess that it’s easier for me to convince non-French policy makers that free markets and small government are the right approach when there’s more evidence that statism is failing in France.

So why am I smiling? Well, France wasn’t doing so well under the de facto socialist Nicolas Sarkozy, and it seems that things are looking even worse now that the de jure socialist Francois Hollande is in charge.

Here’s some of what Reuters recently reported.

“It’s always time for a tax hike!”

The French are bleaker about their country’s future than at any time since 2005, a new poll showed on Saturday, with 68 percent saying they are “rather” or “very” pessimistic… Hollande’s government has been reeling from unemployment at a 13-year high and a rash of job cuts in recent weeks at top employers like carmaker Peugeot and retailer Carrefour. The government launched a plan this week to create 150,000 state-sponsored jobs for youth. Only 34 percent of those surveyed were confident in the government’s ability to battle unemployment, and just 20 percent expect the government to be able to improve their buying power. …The poll found that the pessimism extended even to 58 percent of Socialist party supporters.

I’m wondering when the pessimism will spread to investors. France recently lost its triple-A credit rating, but the rating agencies don’t do a good job, so I think it’s much more important to look at the prices of credit default swaps.

In other words, how much does it cost for an investor to insure debt from the French government? According to this CNBC site, France isn’t viewed as being as creditworthy as nations such as Switzerland, Germany, and the United States, but it is closer to those countries than it is to Spain, Italy, or Portugal.

This is just a guess on my part, but I think France is reaching the point where investors are suddenly going to get concerned about the government’s ability to fulfill its promises.

If Hollande follows through on his threat to impose a “patriotic” 75-percent tax rate, for example, that could be the trigger that makes the bond market a lot more skittish. Particularly since it will result in fewer rich people in France.

I’ve already written about French entrepreneurs and investors leaving the country because of Hollande’s class-warfare tax agenda. It’s gotten so bad that even Hollywood types are packing their bags.

Actor Johnny Depp has moved out of France and returned to America because he didn’t want to become a permanent French resident and pay income tax there. …Depp has now moved his family out of France after government officials asked him to become a permanent resident, as he feared he would end up paying tax in both countries. He tells Britain’s The Guardian newspaper, “…France wanted a piece of me. They wanted me to become a permanent resident. Permanent residency status – which changes everything. They just want… Dough. Money… ” Depp goes on to explain that if he spends more than 183 days a year in France he will have to pay income tax in both Europe and America, adding, “So you essentially work for free.”

Wow, complaining that he doesn’t want to “work for free.” What is he, some sort of radical libertarian from the Tea Party?

But he may want to chat with fellow tax-averse actor Jon Lovitz before moving back to America. Obama’s class-warfare agenda isn’t as bad as what Hollande is trying to impose, but it’s not Hong Kong or the Cayman Islands either.

P.S. Here’s a very good Chuck Asay cartoon about the French economy.

P.P.S. In a few areas, France has better policy than the United States.

[Jack Hydrazine]

“Depp” doesn’t mean anything in German.

[max americana]

Yup. He’s an Ottawa guy. Other canuck guys to mention are the sons of JP Parise and Ray Bourque...who play for Team USA. There’s a lot to mention.

[MinuteGal]

We don't want ya back, Jacque!

You were once a prince of our cinema, now you're just a frog.

Abas le corsaire!

Leni

[EggsAckley]

Outrageous. What will Hollywood say? An actor NOT wanting to give up his US citizenship? Funny how it all comes back around.

[Kaslin]

Not Depp by it self, but if you put in “du bist ein Depp” using the Bing translation it comes out “you are a dork” and since my native language is German, I should and would know I believe

[MarkL]

It’s weird how all of the Hollywood “celebrity” frauds want Socialism/Marxism/Communism but they don’t want to have to pay for it.

Remember Will Smith's reaction when he was told the tax rate in France was 75%? He freaked out.

Mark

[heye2monn]

France is really bad, but the United States is racing to catch up. Regardless of who is the next president, socialized medicine is probably here to stay. Fannie Mae — a cause of the housing bubble — ain’t going anywhere. As for bailouts — just wait until the next big industry gets into trouble.

Worst of all is the old age entitlement state, with its death embrace of higher taxes and bigger government.

Pretty soon, there will be nowhere left on earth for us to go.

[Erasmus]

There is also Freudenschade, which means peevish envy at the good fortune of others.

At least that's what it means, now that I've made it up.

(I'm sure that a Google search will reveal hundreds of other great minds who have done likewise.)

[FlingWingFlyer]

Sure do. It’s funny how they all like to talk about how great socialism is until they figure out that somebody has to pay for it. The government has to steal the money from someone.

[LibertarianLiz]

Lenon's "Taxman" was probably the best anti-tax protest song of all time.

"Taxman" was written by George Harrison.

[USFRIENDINVICTORIA]

Check out my mea culpa in #25.

[Wally_Kalbacken]

The IRS taxes the income of citizens of the U.S. regardless of where they live or work. Depp, and any other U.S. citizen, receives a credit for taxes paid in a foreign jurisdiction, so the only time he would be paying income taxes to France and the U.S. is when the tax rate in France was lower than in the U.S., and I do not think that has been the case lately.

example:

Depp makes $10M in 2010. Assume France has a 42% tax on income. Depp is a U.S. Citizen residing in France for the full year. He pays $4.2M to the French equivalent of the IRS. He also files a return in the US and reports the $10M in income. Let's assume that it is taxed at 38% (forget about exemptions and deductions for this example). He would file a return showing $3.8M owed to the IRS, but would be given credit for the amount paid to the French taxing authority, up to the $3.8M owed in the US.

Since the United States has lower rates than many other countries, U.S. citizens resident overseas for a full year rarely pay in both places.

The recent stink over Denise Rich renouncing her U.S. citizenship (or the earlier brouhaha over the Brazilian-U.S. dual citizen co-founder of Facebook renouncing his U.S. citizenship) illustrates the case of someone who could live and be a citizen in a jurisdiction with an advantageous tax scheme relative to the U.S., who is facing a windfall or an inheritance which would be subject to U.S. taxation. These expatriates who renounce U.S. citizenship are subject to an "exit fee" set by federal law. But, if the windfall is large enough (e.g., Rich, Eduardo Saverin) the exit fee is no impediment.

[Wally_Kalbacken]

The IRS taxes the income of citizens of the U.S. regardless of where they live or work. Depp, and any other U.S. citizen, receives a credit for taxes paid in a foreign jurisdiction, so the only time he would be paying income taxes to France and the U.S. is when the tax rate in France was lower than in the U.S., and I do not think that has been the case lately.

example:

Depp makes $10M in 2010. Assume France has a 42% tax on income. Depp is a U.S. Citizen residing in France for the full year. He pays $4.2M to the French equivalent of the IRS. He also files a return in the US and reports the $10M in income. Let's assume that it is taxed at 38% (forget about exemptions and deductions for this example). He would file a return showing $3.8M owed to the IRS, but would be given credit for the amount paid to the French taxing authority, up to the $3.8M owed in the US.

Since the United States has lower rates than many other countries, U.S. citizens resident overseas for a full year rarely pay in both places.

The recent stink over Denise Rich renouncing her U.S. citizenship (or the earlier brouhaha over the Brazilian-U.S. dual citizen co-founder of Facebook renouncing his U.S. citizenship) illustrates the case of someone who could live and be a citizen in a jurisdiction with an advantageous tax scheme relative to the U.S., who is facing a windfall or an inheritance which would be subject to U.S. taxation. These expatriates who renounce U.S. citizenship are subject to an "exit fee" set by federal law. But, if the windfall is large enough (e.g., Rich, Eduardo Saverin) the exit fee is no impediment.

[Rides_A_Red_Horse]

I expected the really big yachts to sail in 2008 or 2009, but they’re still swinging at anchor in the New York Yacht Club basin (well, except Romney’s — he’s Cayman-flagged now)..... for now.

---

I thought it flew the Bahamanian flag.

[lentulusgracchus]

Last night, TV news, shot of the yacht. ABC I think.

[lentulusgracchus]

It's easy to metasearch on "Romney flag yacht" ..... like this:

http://tinyurl.com/9qh6vhf

Lazy b*stard.

That's the last one, bert. You've worn out your welcome.

[bert]

I thought so. Per Free Republic, the yacht belongs to a supporter

I don’t have the thread though

[dfwgator]

With the way all of these people praise Castro, why don’t anyone of them move to the socialist paradise of Cuba?

[GeronL]

poor poor guy

Now he is a tax dodging rich guy

[dagogo redux]

As an actor, I liked him very much in Fear and Loathing in Las Vegas, and in The Tourist, but I’ve otherwise never been very impressed.

I’m deeply impressed now to see how he’s handling himself as a member of the 1%.