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Vive La France ... And Its High Taxes On The Wealthy

Jul 14, 2012
Originally published on July 16, 2012 4:54 pm

As the French people celebrate their revolution on Saturday, Bastille Day, the founding principles — liberte, egalite and fraternite — seem to be alive and well.

New President Francois Hollande embraced equality on the campaign trail this spring. To reduce the French deficit, he proposed raising taxes on large corporations and the super-rich. The move helped his campaign take off, says Gerald Andrieu, a political journalist with Marianne magazine.

"It was a very popular idea, because the concept of equality is really at the heart of our republic. And I think people had been waiting for such a proposal after the years of [Nicolas] Sarkozy," Andrieu says in French.

One of the reasons Sarkozy was so unpopular is that he veered too far from egalite and was seen as a president of the rich.

Hollande's proposal would slap a 75 percent tax rate on anyone making more than 1 million euros a year, a huge jump from the current top rate of 41 percent. It would also reinstate some wealth taxes Sarkozy got rid of.

Many wealthy French have already gone abroad. Singer Johnny Hallyday and former pro-tennis player Guy Forget live in Switzerland. The French community in London is so large that it's jokingly referred to as France's seventh largest city.

British Leader Extends Offer To Wealthy French

At the recent G-20 gathering, British Prime Minister David Cameron said his country would be glad to welcome a few more French citizens.

"I've said before that if the French go ahead with a 75 percent top rate of tax, we will roll out the red carpet and welcome all French businesses to Britain," said Cameron. "And they can pay taxes in Britain, and that can pay for our health service and our schools."

Hollande didn't respond directly, but his labor minister chalked the comments up to British humor and retorted, "It might be a little difficult to roll out a red carpet over water."

Arnaud Vaissie, head of the British-French chamber of commerce in London, says, "the fact that David Cameron has talked about this red carpet being rolled out for the French willing to move to the U.K., it is at the same time annoying the French authorities but also pushing them to think it through," Vaissie says.

The French parliament is expected to pass the new tax laws this month.

As the debate rages over whether the rich will stay or go, the government has played down the possibility of an exodus. The French finance minister said it was a question of patriotism.

So perhaps the French rich are more patriotic. Last year, 16 French millionaires and billionaires signed an open letter, saying they favored paying more to help their country.

"I'm not leaving, because I like my country, and I have no reason to go away," says Philippe Gibert, a millionaire real estate investor.

Gibert, at a Paris dinner party abuzz over the topic, says Hollande is doing the right thing.

"Of course, I'm not very happy about that because I will pay more, but I admit that I have to do that," says Gibert. "Because who can pay for what is necessary? Only the rich. The others, they can't pay. So if somebody has to pay, it has to be the rich people."

Polls show 67 percent of the French say they're ready to pay more taxes to help their country. Chalk that up to the revolutionary spirit of fraternite and egalite.

Copyright 2013 NPR. To see more, visit http://www.npr.org/.

Transcript

SCOTT SIMON, HOST:

Today is Bastille Day. In 1789, the French overthrew their monarchy and system of aristocratic privilege, and replaced it with a democracy built on the principals of liberty, equality and fraternity. In the name of equality, newly-elected President Francois Hollande promised to raise taxes on the rich, dramatically.

And as Eleanor Beardsley reports, so far, most French people - even many wealthy people - seem to support the move.

(SOUNDBITE OF A MILITARY PARADE)

ELEANOR BEARDSLEY, BYLINE: It was President Francois Hollande's first time reviewing the troops in the traditional Bastille Day military parade down the Champs Elysees. As millions of French people celebrate their revolution, its founding principals: liberte, egalite, and fraternite seem to be alive and well, anchored deep in the national psyche.

One of the reasons former President Nicolas Sarkozy was so unpopular is that he veered too far from egalite and was seen as a president of the rich.

(APPLAUSE)

FRANCOIS HOLLAND: (Foreign language spoken)

(APPLAUSE)

BEARDSLEY: Candidate Hollande embraced justice and equality on the campaign trail this spring. To reduce the French deficit, he proposed raising taxes on large corporations and the super rich. The move helped his campaign take off, says Gerald Andrieu, a political journalist with Marianne magazine.

GERALD ANDRIEU: (Through Translator) It was a very popular idea because the concept of equality is really at the heart of our republic. And I think people had been waiting for such a proposal after the years of Sarkozy.

BEARDSLEY: Hollande's proposal would slap a 75 percent tax anyone making more than a million euros a year, a huge jump from the current rate. It would also reinstate some wealth taxes Sarkozy got rid of. The rich have been leaving France for years. Singer Johnny Halliday and former pro tennis player Guy Forget live in Switzerland. The French community in London is so large that it's jokingly referred to as France's seventh largest city.

At the recent G-20 gathering, British Prime Minister David Cameron said his country would be glad to welcome a few more French residents.

DAVID CAMERON: I've said before that if the French go ahead with a 75 percent top rate of tax, we will roll out the red carpet and welcome all French businesses to Britain. And they can pay taxes in Britain, and that can pay for our health service and our schools.

BEARDSLEY: Though Hollande didn't respond directly, his labor minister chalked the comments up to British humor and retorted that, it might be a little difficult to roll out a red carpet over water.

Arnaud Vaissie is head of the British-French Chamber of Commerce in London.

ARNAUD VAISSIE: The fact that David Cameron has talked about this red carpet being rolled out for the French willing to move to the U.K., he is at the same time annoying the French authorities but also pushing them to think it through.

BEARDSLEY: The French parliament is supposed to pass the new tax laws in July. As the debate rages over whether the rich will stay or go, the government has played down the possibility of an exodus. The French finance minister said not leaving was a question of patriotism. So perhaps the French rich are more patriotic. Last year, 16 French millionaires and billionaires signed an open letter, saying they favored paying more to help their country.

PHILIPPE GIBERT: I'm not leaving because I like my country and I have no reason to go away.

(SOUNDBITE OF A CONVERSATION)

BEARDSLEY: That's millionaire real estate investor Philippe Gibert at a Paris dinner party abuzz over the topic. He says Hollande is doing the right thing.

GIBERT: Of course, I'm not very happy about that because I will pay more. But, I admit that I have to do that because who can pay for what is necessary? Only the rich. The others, they can't pay. So if somebody has to pay, it has to be the rich people.

BEARDSLEY: Polls show 67 percent of the French say they're ready to pay more taxes to help their country. Chalk that up to the revolutionary spirit of fraternite and egalite.

Eleanor Beardsley, NPR News, Paris.

(SOUNDBITE OF MUSIC) Transcript provided by NPR, Copyright NPR.