Sarkozy To London To Dodge Top French Tax Rate!

Originally posted by Teinosuke
I think no1 may have been more right about the past and norm may have a point about the present. It was probably easier to administer very high tax rates in the 1950s, when people were less mobile and less likely to be able or willing to relocate to another country. After all, if you were an American in the 1950s, you were self-evidently living in the most ...[text shortened]... part of a larger question about the effectiveness of national governments in a globalised world.

It may also simply have to do with the image media are portraying and the confidence French people have in their government. The Dutch government temporarily raised taxes for incomes above $73,000 to 68% but people and media didn't make any drama about it.

niOriginally posted by sasquatch672
http://www.dailymail.co.uk/news/article-2266331/Nicolas-Sarkozy-Carla-Bruni-dodge-new-French-tax-hike-moving-London-setting-1billion-fund.html

Former French President Nicolas Sarkozy and Carla Bruni are moving to London to avoid France's 75% top tax rate.

Is there more significance to a former President moving abroad to avoid taxes than an out of work actor doing it?

No...their is no significance at all. People move all the time. This is just an attempt by a few rich folks to call attention to what they feel is an unfair tax situation. If a few middle class folks moved in protest we would hear nothing of it. (I guess some folks are a little MORE equal than others!)😲

Originally posted by spruce112358
Let's start with no1m and normbenign's ongoing debate about high marginal tax rates in the 1950's in the US. no1m claims they led to prosperity. normbenign says no one paid such rates (I am paraphrasing, but bear with me.)

So today France tries high marginal tax rates, and next we hear that Johnny Halliday, Gerard Depardieu, and Sarkozy are all leavi ...[text shortened]... the scheme is doomed to failure because very few are going to stick around to pay such rates?

I made no such claim.

I've yet to see any evidence that "norm was right" on anything.

Originally posted by Teinosuke
I think no1 may have been more right about the past and norm may have a point about the present. It was probably easier to administer very high tax rates in the 1950s, when people were less mobile and less likely to be able or willing to relocate to another country. After all, if you were an American in the 1950s, you were self-evidently living in the most ...[text shortened]... part of a larger question about the effectiveness of national governments in a globalised world.

Where you live is irrelevant to US federal income taxes; if you earn income in the US you are subject to federal tax on it.

Originally posted by no1marauder
Where you live is irrelevant to US federal income taxes; if you earn income in the US you are subject to federal tax on it.

If you're a US citizen earning income anywhere you're subject to US federal income tax. We're the only industrialized country in the world that taxes its expatriates.

Originally posted by bill718
No...their is no significance at all. People move all the time. This is just an attempt by a few rich folks to call attention to what they feel is an unfair tax situation. If a few middle class folks moved in protest we would hear nothing of it. (I guess some folks are a little MORE equal than others!)😲

The end result is the deprivation of revenue to a government which an individual has judged to have tax rates that are too high, yes?

Originally posted by sasquatch672
If you're a US citizen earning income anywhere you're subject to US federal income tax. We're the only industrialized country in the world that taxes its expatriates.

Perhaps everyone should do that, and then the problem would be solved!

Originally posted by KazetNagorra
It may also simply have to do with the image media are portraying and the confidence French people have in their government. The Dutch government temporarily raised taxes for incomes above $73,000 to 68% but people and media didn't make any drama about it.

If a national government collects 68% above $73K, why does anyone work when that level is reached? What is the next lower marginal rate? I take it that doesn't include local, county, or specific use taxes, or real estate taxes.

What is the social welfare income level? In that include a figure for non monetary "income" such as free food, or rent subsidies. Why does anyone work, if he can live nearly as well without an alarm clock, transportation to work, and the drudgery of actually doing the work?

Don't those high marginal rates encourage black market labor?

Originally posted by sasquatch672
If you're a US citizen earning income anywhere you're subject to US federal income tax. We're the only industrialized country in the world that taxes its expatriates.

Tracking and enforcing taxes on expatriates is somewhat insoluble. A relatively small amount of capital in some third world countries can earn a very decent living without any reporting to authorities like the IRS.

Originally posted by sasquatch672
The end result is the deprivation of revenue to a government which an individual has judged to have tax rates that are too high, yes?

Some states which have no or low State income taxes are among the fastest growing, while California and New York are starting to have U Haul backups at their borders.

If anyone it at the high end of NY or Cali tax rates (15% or higher) it's worth considering a change.

Originally posted by sasquatch672
The end result is the deprivation of revenue to a government which an individual has judged to have tax rates that are too high, yes?

Yes, I suppose so, but I'd say this is an internal matter for France to deal with. If a few rich people want to grandstand this way it will grab a lot of press, but it's France's situation, so let them run with it.

Originally posted by normbenign
If a national government collects 68% above $73K, why does anyone work when that level is reached? What is the next lower marginal rate? I take it that doesn't include local, county, or specific use taxes, or real estate taxes.

What is the social welfare income level? In that include a figure for non monetary "income" such as free food, or rent subsi ...[text shortened]... of actually doing the work?

Don't those high marginal rates encourage black market labor?

Well, if they're on a salary of, say $103,000, they still keep an extra $10,000 compared to what they'd get if they only made $73,000. Some people might find nearly an extra thousand dollars a month worth working for.

Originally posted by spruce112358
Let's start with no1m and normbenign's ongoing debate about high marginal tax rates in the 1950's in the US. no1m claims they led to prosperity. normbenign says no one paid such rates (I am paraphrasing, but bear with me.)

So today France tries high marginal tax rates, and next we hear that Johnny Halliday, Gerard Depardieu, and Sarkozy are all leavi ...[text shortened]... the scheme is doomed to failure because very few are going to stick around to pay such rates?

When Kennedy proposed reducing the highest marginal rates from 95% to 65% it is doubtful that anybody really paid those rates. It is preposterous to think that people in that earning bracket would not hire financial planners to utilize the bevy of loopholes and shelters for their excess earnings.

I just read recently that there were only a few hundred people who were in that bracket at that time.

One thing we do know is that virtually everyone makes an effort to pay the minimum legal amount of tax regardless of social or financial position. Those efforts will include moving in many cases, in others moving money making activities, or sometimes saying "I have enough" and stopping work and paying taxes.

Originally posted by Teinosuke
Well, if they're on a salary of, say $103,000, they still keep an extra $10,000 compared to what they'd get if they only made $73,000. Some people might find nearly an extra thousand dollars a month worth working for.

How much time and effort for that extra $10k? I know a fellow who made more than that at lower marginal tax rates in the States and quit his job for minimum wage employment. He does contract work under the table, for which the government gets no revenue. I can see little incentive to work for $30k and receive only a third of it. I would work less, if hourly, or seek less responsibility, if salaried.

I would have to see the curves, but at some point the generous welfare and unemployment programs funded by high tax rates tend to make work somewhat silly.

Originally posted by bill718
Yes, I suppose so, but I'd say this is an internal matter for France to deal with. If a few rich people want to grandstand this way it will grab a lot of press, but it's France's situation, so let them run with it.

It is important for Americans to discuss, because we've been told how superior Europe's high taxation is to our relatively lower taxes.