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Business

Rising number of wealthy French fleeing abroad

© AFP | Archival picture shows a yacht leaving the port city of Nice on the French riviera in 2014

Text by FRANCE 24

Latest update : 2015-08-08

New figures published this week suggest that an increasing number of France’s top earners are leaving the country, with some observers blaming high taxes for the rising “wealth drain”.

A total of 3,744 people who earned 100,000 euros per year or more left France in 2013, a 40 percent increase compared to 2012, French financial newspaper Les Echos revealed citing figures from the national tax-collecting office.

Furthermore, 659 people who earned 300,000 euros or more annually said ‘au revoir’ in 2013, a 46 percent rise on the previous year. By comparison, the overall French migration rate in 2013 increased by only 6 percent.

The well-respected French newspaper highlighted that the figures were incomplete due to various bureaucratic issues, and warned that it would be dangerous to use it to draw any conclusions. However, the article coincided with the recent publication of a report from the New World Wealth consulting group that listed France third on a list of countries with the biggest outflow of millionaires. Around 42,000 millionaires left France between 2000 and 2014, according to the report.

Both reports have raised eyebrows at a time when France is still trying to claw its way out of an economic slump and reduce its worryingly high unemployment rate.

Targeting millionaires

Some observers have cited the France’s relatively high tax rate as one of the main reasons rich people are jumping ship in record numbers. Taxes and social security contributions accounted for 45 percent of GDP in 2013, the second highest rate among the OECD group of rich nations, according to a report last year. Only Denmark, with a tax rate of 48.6 percent of GDP, topped France.

Prime Minister David Cameron angered many in France back in June 2012 when he said Britain would “roll out the red carpet” to welcome wealthy French citizens and firms overburdened by the country’s taxes.

The conservative British prime minister was responding to questions over a proposed measure by President François Hollande, a Socialist, to tax incomes over 1 million euros at a 75-percent rate. Hollande’s infamous millionaires’ tax, a key campaign promise meant to cut public debt, was eventually struck down by France’s Constitutional Council.

Another uniquely-French levy, the Solidarity tax on wealth (Impôt de solidarité sur la fortune, or ISF) is also viewed as an attack on France’s wealthy. Introduced by the Socialist Party in 1981, it is an annual direct tax on French residents earning an excess of 1.3 million per year.

French cinema star Gérard Depardieu garnered widespread media attention in 2012 when he decamped to Belgium in search of less tax-heavy regime. The movie star was accused of “pathetic” and unpatriotic behaviour by leading politicians at the time, prompting an angry letter from the actor in which he accused the French government of punishing “success” and “talent”.

Depardieu’s self-imposed tax exile has since faded from the public’s attention, but the flight of France’s wealthy – real or perceived - remains a concern for Hollande’s already troubled government.
 

 

Date created : 2015-08-08

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