The French Exodus
Even before François Hollande was elected President of France on Sunday, wealthy Frenchmen were looking to move to London to avoid threatened high wealth taxes put onto the rich.
What is happening in France now is a harbinger for what to expect in the United States because of Taxmageddon 2013.
President-elect Hollande wants a new wealth tax of 75% put on Frenchmen making more than a €1,000,000 euros a year.
Sound familiar? Think, “pay their fair share”.
The Chunnel Connection
Two days before the French elections, London’s Financial Times published this article on the wealthy fleeing France: “Wealthy French eye move across the Channel“- James Pickford, FT, 5/4/2012
London appeals to the French as a tax haven because it’s a world commerce center and because it’s close to home.
According to the FT, London-based wealth management firm, Vestra Wealth, has had a 40% increase in inquiries from French clients after Hollande said this in his January announcement that he was running for French president:
My true adversary in this battle has no name, no face, no party … It is the world of finance
– François Hollande, French presidential announcement, 1/26/2012
That sounds a lot like Occupy Wall Street protesters railing against the big banks and the “1%”.
Wealthy Frenchmen are worried about oppressive new taxes specifically aimed at them.
The election seems to have pushed a growing number of wealthy French to consider their options for where they are likely to base themselves in the future
-Liam Bailey, Knight Frank Researcher, 5/4/2012
Ain’t nobody gonna drum up sympathy for the ultra-rich, either in France or in the United States. They make enough as is. They can afford more taxes.
It’s certain, as a result of the election, that some wealthy Frenchmen will indeed start moving to London and other places.
Before crying “foul!” over Frenchmen moving to avoid paying high taxes, though, consider a low-finance American equivalent.
Average Americans living in Vancouver, Washington USA do not buy their cars or other big ticket items in Vancouver. No. Instead, they drive across the Columbia River to Portland, Oregon to make those purchases.
Why? Washington State has a sales tax, Oregon does not! Normal average everyday Washingtonians drive a couple miles to Oregon to avoid paying taxes. In fact, it’d be dumb not to.
The same is true for wealthy Frenchmen. They’d be dumb not to consider their options for avoiding what they consider to be oppressive new taxation.
Wealthy Americans, also, will consider moving out of the United States when, in their view, wealth taxes become oppressive. They’d be dumb not to.
The problem for the United States is that wealthy Americans living overseas to avoid taxes might discover that globalization has made conducting business there more profitable than here.
When that happens the wealthy will take their businesses and the jobs they create with them.