Random posts on all sorts of things designed to inform and provoke.
Almost every European and American government is trying desperately to raise revenues while attempting to contain spending and manage the anger of its residents. The US legislature, for example, is currently stuck in neutral following the House’s failed attempt to do something that would show the country’s citizens that it was doing anything. This scenario is being repeated throughout the democratic world because the solution to these problems can only come from the tough decisions that politicians are not programmed to make.
A politician is only proactive when he/she is faced with either a bankruptcy (the most recent example being Greece) or a war (the most recent example being every country in the world). France did not face any such scenarios and that is why it was such a surprise when the Hollande campaign announced that, if elected, it would combine cuts in spending with a 75 percent tax on incomes of over $1.3 million.
Francois Hollande is now the French president and a few days ago the French parliament passed his 2013 budget that includes $13.2 billion in spending cuts and the aforementioned tax increase. The goal of this budget, by the way, is to reduce the budget deficit to 3 percent – currently 4.5 percent – and raise economic growth to 0.8 percent. While the French people aren’t likely to be happy with the spending cuts that will directly impact their benefits, the news that has divided the country is iconic actor Gerard Depardieu’s move to Belgium to protest the tax rate and avoid the associated payments.
This action by the portly actor has started conversations on whether its moral for someone who earned his fortune from a country to leave that nation in its time of need or should that person focus on his fortune with no regard for the country. These are obviously longstanding questions that are raised every time any government increases or decreases taxes and/or deductions, so these conversations are not surprising.
What is surprising is how many French people are supporting Depardieu. When the French prime minister Jean-Marc Ayrault called the move “shabby”, the actor and his supporters pointed out that the rotund fella was following the path trod by other successful French citizens. In a letter to the prime minister, Depardieu wrote that “I’m leaving because you think success, creation, talent and anything different should be punished” and further stated that he had paid $189 million in taxes since joining the workforce as a printer at the age of 14.
One could argue that it’s a patriot’s job to support his/her country in its time of need but it is also common sense that a country should not take simply over their citizen’s fortune. The Hollande government’s 75 percent tax rate is patently ridiculous and is clearly based on an idea from someone who has never worked in the private sector.
This idea also doesn’t make sense on a practical level because there is nothing to prevent a person from taking their money out of the country. Nowhere is this truer than in Europe where the EU gives citizens of any member country the opportunity to cross borders and still continue to travel and work in any member country.
Finally, a person only becomes successful by being selfish. This is not necessarily a bad thing but it does prevent them from doing anything that does not directly benefit them. Hollande’s goal of generating funds from this high tax is rate is, therefore, not only impractical, counterproductive but also a daydream.