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De Omnibus Dubitandum - Lux Veritas

Monday, January 5, 2015

France's mistake shows taxing wealth doesn't work

By Dan Hannan | January 5, 2015

French President François Hollande speaks during a joint news conference with President Obama, as...

I was living in Brussels when François Hollande, the President of France, introduced his 75 percent top rate tax in 2012. Immediately, my quarter began to fill with French exiles, who could commute to Paris in just over an hour. One of the few Belgians left in my street, a stern local matriarch, stopped me as I left the house one morning. “You’re in politics, Monsieur le Député, maybe you can tell me something. What kind of hell must these poor souls be fleeing if they see Belgium as a tax haven?”...... Hollande’s tax, levied on incomes above one million euros, has been a miserable failure. Over its lifespan, it raised around $500 million, a tiny fraction of the original projections. Why? Well, the Paris bureaucrats who made those projections overlooked something rather important. Rich people don’t sit around waiting to be taxed. They have all sorts of ways of beating the system, not necessarily involving accountants. The two most straightforward forms of legal tax avoidance are earlier retirement and emigration, and wealthy Frenchmen have made ample use of both.  Parts of Kensington, an expensive district of West London, are now largely Francophone. London is, on some measures, the sixth-largest French city in the world......To Read More....

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