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With all the political debate about the fiscal cliff and the possibility of higher individual taxes, take comfort in the fact that you're not a French citizen, especially a wealthy one. The new French Socialist president, Francoise Hollande, is proposing a 75-percent top individual tax rate, causing some in France to worry that the rich will flee to more tax-friendly countries.
The proposed tax would be imposed on those earning in excess of a million euros a year, or about $1.2 million. The 75-percent rate compares to a top individual rate of 57 percent in Sweden, 50 percent in Britain and Japan and 35 percent in the U.S.
Parliament will consider the proposal in September as a way to help France, the second-largest economy in the European Union, solve its debt issues. The government wants to raise 33 billion euros in new revenue next year, but the number of taxpayers who would be subject to the new tax is estimated to be 7,000 to 30,000, in a country with a population of 65 million.
The flight risk among the wealthy might be overblown, but Hollande is not exactly laying out the welcome mat. "I don't like the rich," he's stated. In general, France has a different, more negative view of the rich. Paris attorney Vincent Grandil explained it this way to the New York Times: "French people have an uncomfortable relationship with money. Here, someone who is a self-made man, creating jobs and ending up as a millionaire, is viewed with suspicion. This is big cultural difference between France and the United States."
What's your opinion on France's proposed tax rate on the rich?
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