International movie star Gerard Depardieu recently moved to Belgium in order to avoid the 75% income tax on his earnings that French President Francois Hollande slapped on the “rich” after his election.
This didn’t sit well with the government and Prime Minister Jean-Marc Ayrault called his decision to seek tax exile in Belgium “pathetic.”
“I am leaving because you consider success, creativity, talent, anything different are grounds for sanction,” the movie star, known for such classic French roles as Cyrano de Bergerac and the musketeer Porthos, wrote in correspondence to Ayrault published today in Le Journal du Dimanche. “I don’t expect to be pitied or praised but I reject the word pathetic.”
Depardieu, the latest celebrity to leave France after Socialist President Francoise Hollande introduced a slew of new levies since he was elected in May, said he has paid 145 million euros in taxes over the course of his 45-year working life that began at age 14. As well as a 75 percent tax on income over 1 million euros ($1.3 million) Hollande has also added new charges on capital gains, an increased tax on wealth, a boost to inheritance charges and an exit tax for entrepreneurs selling their companies.
The 63-year-old actor, who also played Jean Valjean, the post-revolution Frenchman convicted for stealing a loaf of bread, in a television version of “Les Miserables,” joins a wave of departures among entrepreneurs, businessmen and retirees, according to Philippe Kenel, a Geneva-based tax lawyer at Python, Schifferli, Peter & Associates.
“I am totally scandalized,” Culture Minister Aurelie Filippetti said on BFM-TV today. “Gerard Depardieu is abandoning the battleground in the middle of the war against the crisis.”
The actor, who played Obelix in films on one of France’s most beloved fictional characters, said in the newspaper he paid tax at an 85 percent rate on his 2012 income.
“Pathetic, you said ‘pathetic?’ It’s pathetic,” Depardieu’s letter to the prime minister began. “I don’t have to justify the reasons for my choice, which are numerous and personal. Who are you to judge me in this way?”
I don’t think a 39% top rate will drive many rich people to leave the country. But that’s just the beginning. Some have advocated — most notably Paul Krugman — a top rate of 90% on every dollar earned above $1 million. If that happens, all bets are off and the prospect of a mass exodus of the most successful Americans may become a reality.
It’s already a reality in France. The rich are fleeing the country and President Hollande can only fume:
Depardieu’s exit comes as the French government is seeking to bolster revenue through taxes on large companies, Internet startups and private fortunes to make its budget-deficit target of 3 percent of gross domestic product next year. Hollande, the first Socialist president in France since 1995, has called on those “with the most to show patriotism” in tough times.
Governments only recourse is to eventually prevent people from leaving the country, or prevent their wealth from leaving. France will suffer the consequences of their class warfare policies by receiving less revenue than they expect while seeing a brain drain that will affect their ability to compete internationally.