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Economy

ORIGINAL FRENCH ARTICLE: Les plus fortunés prennent l’oseille et se tirent !

by Sébastien Crépel

The Wealthiest Take the Money and Run!

Translated Tuesday 13 April 2010, by Gene Zbikowski and reviewed by Gene Zbikowski

The “tax shield” gave the well-off 580 million euros in 2009, but it hasn’t stopped the richest French people from exiling themselves.

Pamper the rich and they’ll pay you back. That, in a nutshell, was the Sarkozyist philosophy at the beginning of the President’s five-year term. The first act of the Sarkozy presidency was the adoption of a tax package favoring the wealthiest French people, which was to permit “the rest of the country to benefit best through incentives rather than constraint,” in the words of Christine Lagarde, speaking before the deputies on July 10, 2007.

Following the publication on April 6 of the figures on tax exiles in 2008 by the new Budget minister, François Baroin, one fact has become completely clear: Sarkozyism is now a thorough-going failure. Even the supposed economic fallout from the gifts to the richest people has fallen flat.

The data is eloquent: in 2008, the government registered the return of 312 “tax expats” who must pay the solidarity wealth tax (ISF), as against ... 821 departures. I.e. a negative balance of 509 fortunes domiciled for tax purposes in France. In plain English: the big money-bags are pocketing the cash... and are fleeing abroad, following the same logic as the big corporations that receive public monies and then off-shore.

Even François Baroin admits that in 2009 the big money-bags paid one billion euros in taxes instead of 1.5 billion, which they would have had to pay without the “tax shield.” Instead of the increased tax income expected from the return of wealthy French people to France, the “tax shield” is making the government poorer and is enriching those who are already filthy rich.

In 2009, according to François Baroin’s figures, 585 million euros were paid into the public treasury by 16,350 tax households, of which 47% (7,675 households) pay the solidarity wealth tax. The latter alone got a tax rebate of 580 million euros (75,500 euros apiece, on average). And a handful of the richest of the rich benefited from the lion’s share of the jackpot: 1055 taxpayers who declared a fortune of over 16 million euros benefited from a tax rebate of 383 million euros in 2009 – i.e. 363,872 euros per household.

“For each of them, that’s the equivalent of twenty years’ wages for someone earning the minimum wage,” the spokesman for the Communist deputies, Roland Muzeau, said indignantly.

But abolishing the measure is out of the question, the Budget minister repeats. For him, France is “ill with tax instability.” By that, he means that if the rich continue to expatriate themselves, it’s the fault of the left, whose criticism creates a climate of “instability”!

The government is just barely intending to demand an “effort” from the wealthy by not exempting them from the planned increase in the General Social Contribution and the contribution for the repayment of the French social security deficit. In fact, this is a little bitty concession (at the very most a few hundred euros per household) to sugar the pill of a new injustice: that of a tax increase which everybody, and especially the poorest, will be forced to pay.


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