Sunday, December 31, 2006

Tax Policy & Tax Havens

I thought this was an interesting article about the debate political rhetoric in France over tax policies and how they shape individual choice as well as public policy.

In stark contrast with France, where heavy taxes punish big earners, Switzerland imposes no wealth tax and the state takes only part of the annual income of rich foreigners. In addition, individual cantons can arrange single 'flat tax' arrangements with the very rich.

[Former French rocker] Hallyday will join an estimated 100,000 French citizens, including tennis star Amelie Mauresmo, racing driver Alain Prost and singer Charles Aznavour, now enjoying fondue, the Alps and fine watches (Gstaad [Switzerland] boasts Rolex, Cartier and Patek Philippe shops). According to Francois Micheloud, a Swiss tax expert, Hallyday would be paying up to 60 per cent of his estimated £4m annual earnings to the exchequer [or Treasury Department] in France. His tax bill in Switzerland is certain to be considerably less - it could be as low as £105,000.

Tax is now a major issue in the run-up to next year's presidential elections in France, which explains in part why the decision of Hallyday, a vocal supporter of Nicolas Sarkozy, the Interior Minister and right-wing candidate, is so controversial.

Socialist candidate Segolene Royal sneered that she prefers to have friends who don't leave France to live in tax havens.

Sarkozy snapped back that Hallyday was only forced to leave by left-wing laws that meant France welcomed only those who have 'no papers, no training... and no desire to succeed'.


Roger Seifritz, director of Gstaad's tourist office, insists that, as a high proportion of local people work in traditional agriculture, the atmosphere is more 'authentic'. 'It keeps the valley in touch with real life,' he said. 'That's one reason why rich people come here. It is what life used to be like, and they like that.' |Guardian|
It does seem somehow wrong to me that someone should benefit from a socialist society your entire life and then leave when it no longer makes good economic sense. Although I'm guessing that tax refugees would argue that society contributed little to their development and success.

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