Soaking Les Riches
The call to Vincent Grandil’s Paris law firm began like many others that have rolled in recently. On the line was the well-paid chief executive of one of France’s most profitable companies, and he was feeling nervous.
President François Hollande is vowing to impose a 75 percent tax on the portion of anyone’s income above a million euros ($1.24 million) a year. “Should I be preparing to leave the country?” the executive asked Mr. Grandil.
The lawyer’s counsel: Wait and see. For now, at least.
“We’re getting a lot of calls from high earners who are asking whether they should get out of France,” said Mr. Grandil, a partner at Altexis, which specializes in tax matters for corporations and the wealthy. “Even young, dynamic people pulling in 200,000 euros are wondering whether to remain in a country where making money is not considered a good thing.”
“The thing French politicians don’t seem to understand or care about is that when you tax away two-thirds of someone’s earnings to appeal to voters, productive people who can enrich businesses and the economy won’t come — or they will just leave,” said Diane Segalen, a corporate headhunter.
She said she had been close to sealing a deal for a seasoned executive in London to join one of France’s biggest companies earlier this year, when Mr. Hollande made his 75 percent vow.
“When the guy heard that, he said, ‘I’m not coming,’ and withdrew from the process,” said Mrs. Segalen, the head of the Segalen et Associés, a consulting firm.
Read the whole thing. If Hollande’s plan goes through, France will far exceed the next most taxing economy, Sweden, as the European country with the highest tax rate. Sweden takes 57 cents out of every dollar earned; France would take 75. [UPDATE: Yes, yes, I know, top marginal tax rates; sorry I wasn’t more clear — RD.]
It is interesting to contemplate at what point patriotism becomes a kind of masochism. At what point would the US tax rate on your income make you turn your back on your country? That is, what’s the tipping point at which you would you consider your country to be a thief, taking more from you in taxes than it has a right to, such that you feel compelled to leave it?