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During the French election (now) President Hollande presented a plan to cut the budget deficit. Part of the plan was raising taxes on those earning more than EUR 1 million per year (~ $ 1.3 million per year) to 75%.see Article at the Economist Including other levies the top marginal tax rate will be more than 90%. see Article at the Economist

After the elections a funny thing happened: President Hollande followed through with his plan. With a strong majority in parliament (see Wikipedia article) getting the neccessary change to the tax code was no problem. A first version of the necessary law was ruled unconstitutional by the French Supreme Court (see Article) because it fails to guarantee taxpayer equality. The questions raised by the French Supreme Court are widely seen to be solvable. A second version of the law is expected to be passed sooner rather than later.

Predictably some tax payers are having none of it and move to French speaking parts of Belgium where top tax rates are a mere 50% (see Article)

One of the more famous Frenchmen is going full circle after stating that he has paid EUR 145 million in taxes over the last 45 years and is employing 80 people (see Article) he has decided to renounce his citizenship. A few days later Russia's Vladimir Putin offered the citizenship of the Russian Federation to Depardieu. Depardieu has accepted (and now apperently loves Russia and Putin see Article ), travelled to Sotschi and fetched his passport after meeting Vladimir Putin.

Depardieu will now pay a 13% flat tax on his income.

For all those job creators devastated by recent tax hikes there may be a great opportunity:
Go all the way and move to North Korea. They have abolished all taxes in 1974 (see Wikipedia). You can find highly qualified, loyal and motivated personnel there. And they will not not abandon their positions for higher salaries once they are trained (

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Comment Preferences

  •  For francophones, in prison central (3+ / 0-)
    Recommended by:
    ZedMont, Massconfusion, kat68

    "Another world is not only possible, she is on her way. On a quiet day, I can hear her breathing." Arundhati Roy

    by LaFeminista on Sun Jan 06, 2013 at 06:25:34 AM PST

  •  Why do most of the richest (3+ / 0-)
    Recommended by:
    Shippo1776, BlueDragon, SoCalLiberal

    Russians live outside of Russia?  Because of the Russian Mafia.  He may be picking up his Russian passport but i doubt he is going to live in Russia.  I belive the British term for him would be "limely".


    by thegreatkramer on Sun Jan 06, 2013 at 06:28:53 AM PST

  •  Some corrections and comments. (2+ / 0-)
    Recommended by:
    LaFeminista, doc2

    France, like most OECD countries (the US being a notable exception), taxes people based on their residency rather than citizenship.  So Depardieu doesn't have to renounce his French citizenship to avoid French tax (and diarist, note that he's avoiding, not evading, tax.  The former is lawful, the latter illegal).

    So I highly doubt he's renounced his French citizenship, and I doubt that he'll wind up in Russia when he could go to Switzerland (no capital gains tax!) or Belgium or somewhere else in Western Europe.

  •  Talk about a massively overrated (3+ / 0-)
    Recommended by:
    Chi, kat herder, freedapeople

    actor.  The guy was never anything special, just cool with cinephiles because he was French.  Now he's a big fat right wing lunatic.  But he was never a significant artist, and I doubt he has all that much money.  Putin is enjoying sticking his thumb in western eyes with this, Depardieu is being played like a fiddle, and the whole story is stupid.  I hope he ends up being fleeced for all he's worth by a Natasha working for some Moscow gang.


    •  No more a big fat right wing lunatic than (3+ / 0-)
      Recommended by:
      Chi, doc2, debedb

      U2, the Beatles, or the Rolling Stones, all of whom changed residency or set up corps abroad to avoid high tax rates.

      •  No there is a big difference (2+ / 0-)
        Recommended by:
        Chi, kat herder

        First, those artists have talent.

        But yeah it's skanky when Mitt Romney does it, and when Mick Jagger does it.  I have no problem agreeing with that.

        But I believe Depardieu's right wing politics go well beyond this episode, unlike any of those musicians.

        •  Or in other words (1+ / 0-)
          Recommended by:
          kat herder

          In case it isn't clear, in my opinion the only reason Depardieu is at all rich and famous is because he is a French actor.  Were he British or American he'd be doing summer stock.

        •  the Stones were in a different position (2+ / 0-)
          Recommended by:
          kat herder, BlueDragon

          they had a lot of money stolen from them, and the marginal rates were so high in Britain they had literally no way to raise enough money to pay their back taxes.  The result was recording Exile on Main Street in the basement of Nellcote, so I think that's rather an argument for Britain's old tax regime.  (Good documentary, "Stones in Exile" about this -- Bill Wyman complains about living in the French Riviera because they didn't have the kind of pickles he liked.  So ENGLISH.)

          The other examples were, I believe, of incorporating subsidiary management or licensing businesses in offshore or secrecy jurisdictions.  U2, for example, licenses songs thru a Netherlands corporation, which is odd since Ireland is also a bit of a tax haven in its own right.

          Difficult, difficult, lemon difficult.

          by Loge on Sun Jan 06, 2013 at 07:12:08 AM PST

          [ Parent ]

    •  Mr. Creosote. (2+ / 0-)
      Recommended by:
      Massconfusion, skwimmer

      For if there is a sin against life, it consists perhaps not so much in despairing of life as in hoping for another life and in eluding the implacable grandeur of this life. - Albert Camus

      by Anne Elk on Sun Jan 06, 2013 at 10:04:46 AM PST

      [ Parent ]

  •  By the way (6+ / 0-)

    In all this is interesting to consider how much some of the movies Depardieu has done in France have been funded with money from taxes and protected from foreign competition by very stringent protectionist legislation.

  •  It raises a good question (4+ / 0-)

    About whether a given tax can be raised too high, even on the very wealthy.  These days it seems like money and business are much more mobile and global than they were before, and it would be easier for a person so inclined to pick up and move.

    I don't think 35%, or 39.6% now, is too high for a top tax rate.  Even up to 50% would seem ok for the very wealthy.  Beyond that I don't know.  I think if our top tax rate significantly exceeded top taxes countries that a person would consider ok (especially Canada), you might have this kind of flight of capital.  Especially so since in many countries you can get "instant citizenship" if you bring a certain amount of money to invest in the country ($500,000, $1 million, etc.).  If a wealthy person decides to leave, the U.S. taxes paid by that person go from whatever the rate is, to zero.  So somewhat of a balancing act.

    •  Marginal rate on some types of income (3+ / 0-)
      Recommended by:
      Tailfish, MrJayTee, debedb

      for residents of some high tax states / cities is around or over 50%, just FYI.

      •  What would you consider the optimum (2+ / 0-)
        Recommended by:
        Tailfish, johnny wurster

        Set of tax rates for the US?  Income, cap gains, corporate, etc.

        I often disagree with you, but my question is sincere, not an attempt to start an argument.  

        Educate a leftie today!

        Any significant cut to the social safety net ends my support of the Democratic party.

        by MrJayTee on Sun Jan 06, 2013 at 07:03:53 AM PST

        [ Parent ]

        •  Honestly, that is above my pay grade. (3+ / 0-)
          Recommended by:
          Tailfish, MrJayTee, debedb

          I'm one of those people that finds >50% rates sorta grating, because it tells us that the state is the majority owner of the income of the individual; even thought that's an intuition of mine, it's a weak one and not something I'm wedded to.  I guess as rates exceed 50%, I think the state needs much better reasons to justify the rate, but that's not at all to say that those reasons don't exist (rates in WWII,, for example, would be such a reason)

          There's probably a point at which higher rates leads to economic inefficiency, as people go Galt or spend more money on CPAs and attorneys* in order to avoid tax, but that's a really empirical question and I'm way too lazy to spend time reviewing the literature to find out what that tipping point is.

          In conclusion: I really don't have strong feelings on it.  When it comes to tax, I'm more a technician than a policy visionary.

          * Although that would make my line of work more in-demand and, therefore, more lucrative!

        •  I think that's the problem (2+ / 0-)
          Recommended by:
          johnny wurster, MrJayTee

          You don't know what the optimum level is until after you pass it.

          Example:  Your country has 10 rich people who make a million dollars per year.  You have an effective tax rate of 50%, and generate $5 million per year in tax revenue.  You decide to raise the rate to 60%, and two of the rich people decide to leave.  Even though you raised taxes, your total tax revenue declines to $4.8 million.

          But - there's no way to really tell when people will decide to leave.  We'd just be guessing.

          •  Thanks. I wonder (0+ / 0-)

            If it would be such a burning question if we weren't spending money on garbage like wars and corporate welfare and had a system that encouraged investment in the US?

            Any significant cut to the social safety net ends my support of the Democratic party.

            by MrJayTee on Sun Jan 06, 2013 at 07:26:43 AM PST

            [ Parent ]

          •  Our exit tax on expatriates is something of a (1+ / 0-)
            Recommended by:

            tax "Berlin Wall," such that I think it's unlikely that people would leave en masse.  There are some limited exceptions where it makes sense (like w/ that Facebook guy that left prior to the IPO!), but in general I doubt that too many people will flee.  I could be wrong, of course!

            Our tax code does some funny things; many people scoff at things like restrictions on leaving the country (hence my pejorative "berlin wall" analogy) or at things like capital controls, but we impose both of those things indirectly through the tax code.  Try to leave?  You'll get taxed out the ying-yang.  Try to invest in certain foreign investment vehicles?  Horrible, horrible tax consequences if you invest in, say, a French mutual fund or Irish offshore bond (a type of mutual fund held inside of pseudo-life insurance accounts)

            •  Anyone who leaves over a 3% increase in the (2+ / 0-)
              Recommended by:
              johnny wurster, Capt Crunch

              marginal tax rate over $400-$450K is a freaking idiot.

              And who the hell is Grover Norquist???

              by ZedMont on Sun Jan 06, 2013 at 07:54:23 AM PST

              [ Parent ]

              •  Well, 8 or 9%. (1+ / 0-)
                Recommended by:

                3.6% on the base rate, 3.8% on investment income, and 1.2% due to reductions in itemized deductions, so that's about 8.6%.

                But, yeah.  OTOH, as mentioned, a lot of these people have closer connections to other countries; their family is there, or they have something like accidental US citizenship (eg, born here while family was temporarily here and they kept US citizenship as a nice option despite never living here).

                So I wouldn't be quite so quick to judge people giving up US citizenship.  

      •  Also a good point (1+ / 0-)
        Recommended by:
        johnny wurster

        there's definitely a price to pay to live in certain areas, especially America's "world cities" like NYC, LA, Washington.  Both in terms of taxes and a generally higher cost of living.  For some people it's worth in, for others not.

    •  But there are deductions and loopholes. (1+ / 0-)
      Recommended by:

      Anyone smart/lucky enough to get rich knows enough accountants, lawyer and financial planners to shield wealth. Somehow the country survived and PROSPERED before Reagan started blowing up the deficit and cutting taxes.

      Remember the corporate jet subsidy?

      **Your beliefs don't make you a better person, your behavior does** h/t Clytemnestra/Victoria Jackson

      by glorificus on Sun Jan 06, 2013 at 07:06:50 AM PST

      [ Parent ]

      •  That's true (0+ / 0-)

        I think you need to look at the all-in effective tax rate.  I don't believe that under Reagan we had an effective rate of 90%, or even 75%.  My point is that up at levels like that, you might have some people leave.

        •  There were loopholes galore in the pre-1986 tax (0+ / 0-)

          law.  It's impossible to overstate how much the '86 act shut down loopholes.

          •  But the corporate jet subsidy still exists, does (0+ / 0-)

            it not?

            **Your beliefs don't make you a better person, your behavior does** h/t Clytemnestra/Victoria Jackson

            by glorificus on Sun Jan 06, 2013 at 07:28:36 AM PST

            [ Parent ]

            •  I guess I'm not sure what you mean. (1+ / 0-)
              Recommended by:
              kat herder

              slightly accelerated depreciation?  Sure that exists, but there are other anti-abuse rules that exist that make it hard for people to use it (viz, hobby loss rules and passive activity rules).  

              Imputed comp for personal use?  I'm not 100% sure how this is structured, but my recollection is that, under current law, the exec is deemed to have comp in the amount of the deduction that the business takes.  That's not a loophole, that's the matching principle - the thing that animates and structures the entire tax law - at work.  What people are calling a loophole is actually the absence of a special provision that would treat that differently than anything else in the code.

      •  There are limits to deductions & loopholes. (1+ / 0-)
        Recommended by:
        kat herder

        I've done income & estate tax advising for super-mega-wealthy people for 6 or 7 years, and there are very definite limits to loopholes.  For a W-2 earner w/ investment assets - even when their AGI gets into 8 digits - there's only so much they can do.

        re: corporate jet subsidies and the like: those are great for people that happen to be in a position to take advantage of them, but it's not like a person making a zillion dollars can go out and set up a jet company and start taking advantage of it.

        •  No, this was for owners/users of corporate (0+ / 0-)

          jets, iirc. There was a controversy over it not that long ago, during President Obama's first term.

          Even with the "very deifinite limits to loopholes" the very wealthy still keep a LOT of money.

          **Your beliefs don't make you a better person, your behavior does** h/t Clytemnestra/Victoria Jackson

          by glorificus on Sun Jan 06, 2013 at 07:31:20 AM PST

          [ Parent ]

          •  It was for execs of companies that had jets, (1+ / 0-)
            Recommended by:
            kat herder

            and involved the imputed compensation for non-business use of the plane.

            So a rich person can't just say, "I think I'll set up a jet company......" and make use of the exception.  They already have to be an exec of a company that uses jets in its line of business.

            Funny you mention this, because I recently dissuaded a client from plopping a personal-use jet in a corporation; they thought they could get some tax benefits, which apparently is a common misperception.

            •  Or are you talking about 5-year versus 7-year (1+ / 0-)
              Recommended by:

              depreciation? Again, most super-wealthy people can't take advantage of that; the jet has to be used for business purposes, which is a tough bar to clear.  I've never had a client take the position that a corporate jet was a deductible expense, just because it's too hard to beat the anti-abuse rules that exist to preclude loophole-y use of tax breaks like that.

    •  As I understand it (0+ / 0-)

      The 75% tax rate is not on the total income. They don't take 75% of his total earnings.

      It's only on the income which is above a certain amount.

      For instance, if there were only two tax rates, say 25% for incomes up to $250K per year and 75% for incomes over $250K per year then...

      Mr D. would be taxed at 25% of the first $250K and 75% of the amount over $250K. So, if he made $350K, the 75% tax rate would only apply to the $100K he made OVER $250K.

      It makes the picture look a lot different.

  •  Plus que (0+ / 0-)

    Gerard DeparDON'T, n'est-ce que pas?

    Difficult, difficult, lemon difficult.

    by Loge on Sun Jan 06, 2013 at 07:06:56 AM PST

  •  Has he been in anything good (0+ / 0-)

    since " Tous les Matins du Monde"?

    Wait, I should ask, has he been in anything since "Tous les Matins du Monde"?

    The electoral college was my safety school.

    by Fiddler On A Hot Tin Roof on Sun Jan 06, 2013 at 08:53:50 AM PST

  •  He should check with Mikhail Khodorkovsky (0+ / 0-)

    before making any assumptions about the tax rates in Russia. They allegedly have a flat tax rate of 13% (or 30% for nonresidents)  and a VAT of 18%  , but if you find yourself having a falling out with Влади́мир Влади́мирович, they are somewhat higher. Of course, you get accommodations with that, but they're not in the best part of the country. lol.

    Moderation in most things.

    by billmosby on Sun Jan 06, 2013 at 11:42:23 AM PST

  •  People change countries for economic reasons (1+ / 0-)
    Recommended by:

    Most people who came to the US voluntarily did so for economic reasons.

    Poor people, middle class and rich people change counties for economic reasons, its just more newsworthy when a high profile wealth person does.

    Some people emigrate to the US or France because of social programs from government, and others will leave (fully or partially) because of the taxes they are required to pay if they stay.

    The most important way to protect the environment is not to have more than one child.

    by nextstep on Sun Jan 06, 2013 at 12:22:16 PM PST

  •  He's going Galtinsky! n/t (0+ / 0-)

    You know, I sometimes think if I could see, I'd be kicking a lot of ass. -Stevie Wonder at the Glastonbury Festival, 2010

    by Rich in PA on Sun Jan 06, 2013 at 01:15:18 PM PST

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