Tuesday, July 18, 2006

More on France's socialist stupidity.

Bidness: This applies to all countries as its not just the rich that leave to get away from high taxes, but budding businessmen/women also say why bother and leave for better living conditions.

PARIS -- Denis Payre, a self-described French jet-setter, built a successful high-tech company from scratch, then decided to quit at age 34 to spend more time in France with his wife and young children. Instead, Payre said, he was pushed into exile by the French government, which sent him a tax bill of nearly $2.5 million on paper assets he couldn't cash in. "They were asking me to pay taxes on money I didn't have," Payre said. "I had no choice but to leave the country." Payre, who moved his family to neighboring Belgium eight years ago, is today part of a sizable community of rich expatriate French driven out by the world's highest tax bills on wealthy citizens. The exodus continues: On average, at least one millionaire leaves France every day to take up residence in more wealth-friendly nations, according to a government study. At a time when France is struggling to stay competitive in an increasingly integrated world, business leaders say the country can't afford to make refugees of some of its most established business families. They include members of the Taittinger champagne empire, the Peugeot auto magnates and leading shareholders of dominant retailers Carrefour and Darty. Also going are members of a new generation of high-tech entrepreneurs. Socialist leaders and some government officials argue that the rich are merely trying to shirk their social responsibilities by fleeing the country with their millions.
Here is where the class envy and short-sight come into play.
France's opposition Socialist Party leader Francois Hollande said recently that his party's -- and his country's -- opposition to proposals to lower high-income taxes has nothing to do with disdain for the wealthy. "I don't have anything against rich people, as such," Hollande said in a recent political debate. "They have the right to be rich. But I can't accept that the richest can have their taxes lowered." "This tendency to take from the rich and give to the poor which is supposed to solve all the problems in France is ruining the country," said Alain Marchand, who left France six years ago and now has a London-based consulting business that helps relocate French business leaders and entrepreneurs in England and other countries. "That's an incredibly stupid and narrow-minded vision of economic life." Eric Pinchet, author of a French tax guide, estimates the wealth tax earns the government about $2.6 billion a year but has cost the country more than $125 billion in capital flight since 1998. Business organizations and financial consultants say members of the new generation of business school graduates and high-tech entrepreneurs -- who see the tax structure as penalizing not only individuals but also companies' ability to compete -- are especially likely to flee the taxation. In France, employers are required to pay social security taxes equal to 48 percent of each employee's salary. Labor laws make it difficult and costly to fire incompetent workers. "The way the French state is organized makes it impossible for big family corporations to stay on French soil," said 44-year-old Virginie Taittinger, who moved to Brussels two years ago. "If you add up all the taxes an employer has to pay -- social taxes, employee taxes, the wealth tax, taxes on profit -- even a successful business has a hard time surviving."

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