Impôt Sur le Revenu — Absolument Pas!

by Don Boudreaux on December 18, 2006

in Music

France’s top rock star, Johnny Hallyday, must have spent too much time in the U.K. and the U.S., for he seems to have absorbed the selfish Anglo-Saxon penchant for not wishing to be used and abused by government.  M. Hallyday is moving to Switzerland in order to escape France’s high taxes.  Here’s the full account from today’s New York Times:

Johnny Hallyday Bids France Adieu

To imagine Elvis Presley moving to Monaco is to imagine what it was like in France when the veteran rocker Johnny Hallyday announced he was leaving the country for Switzerland. The decision, newly revealed by the news magazine L’Express, hit France like a bombshell, The Associated Press reported. What’s more, it was an act with political implications for the country’s presidential race. Mr. Hallyday, 63, said he was moving at the end of the month to Gstaad, the Alpine ski resort, to escape France’s high taxes. “Like many French, I’m sick of paying what is imposed on us in the way of taxes,” he said.

Mr. Hallyday has made it clear that he supports the presidential ambitions of Nicolas Sarkozy, the interior minister, who promises lower levies if he wins election next spring. Mr. Hallyday was promptly taunted by the Socialist party leader, François Hollande, who said, “If he really thought Nicolas Sarkozy could win, and was so convinced by his policies, he only had to wait four months.”

(Hat tip to my better half.)

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{ 28 comments }

Half Sigma December 18, 2006 at 4:38 pm

This story demonstrates two things that I strongly believe:

(1) Most people want as much for themselves as possible.

(2) People respond to incentives.

K December 18, 2006 at 4:50 pm

The taunt by the socialist was clever but not well thought out.

If Hallyday wants Sarkozy to win, as he does, the time to make the announcement is before the election.

One is reminded of those who said they would leave if Bush won in 2004. Some said it before the election but didn't leave. Others said it afterwards but few did.

Hallyday isn't quarreling with policies. He just wants to keep more money. I believe French citizens living abroad do not pay French income tax. Americans living aboard do.

Patrick December 18, 2006 at 6:10 pm

But Mr. Hallyday, who will pay for all the "free" health care, the guaranteed unemployment, guaranteed retirement at age 62, 8 weeks vacation and all of the entitlements of the "social contract" if you don't stay in France and submit to regressive taxation. If everyone had that attitude this whole socialist mess we have would colla….oh…never mind, don't worry French citizens, everything is just fine. By the way Mr. Hallyday, Florida has no state income tax, if you're interested.

Ray G December 18, 2006 at 10:45 pm

There was some French super-model a number of years ago (6 or 7) that was about to made, or was just made, the national symbol. She graced some coinage, and something or other, and then, she bolted because the taxes were so high.

bartman December 19, 2006 at 2:26 am

K:

Americans living overseas don't pay taxes on the first $80,000 they make.

John Pertz December 19, 2006 at 4:23 am

Half Sigma wrote:

"This story demonstrates two things that I strongly believe:

(1) Most people want as much for themselves as possible.

(2) People respond to incentives."

Your first belief in regards to the story is rather odd to me. I think people do not want as much for themselves as much as they dont want to see the fruits of their efforts pissed away by politics. Nothing seems more unethical than politicians stealing other people's money for the purpose of selling political goods and garnering more votes for the next election cycle. Call me crazy, but if I were making over 100K a year and working fifty plus hours a week, I would probably not be too thrilled about seeing half of my paycheck being eaten by gready, power hungry politicians.

frederic December 19, 2006 at 7:29 am

Segolene Royal said that it was regrettable that high-income individuals decide to leave France when there is so much that is needed of them and the tax revenue they generate. She really has no clue.

If my memory is correct, Laetitia Casta is the Fch super model who left France for London because of taxation. The reason why it was a big deal is because she also was the "face of France" i.e. she is the new Marianne.

K December 19, 2006 at 11:15 am

bartman: thanks for the correction. i haven't worked overseas in 30 years and don't keep up or pretend to be an expert.

I remember only that tax on overseas work used to cause a lot of complaining.

With open borders within the EU I imagine more 'tax shopping' is done by the rich. (Swiitzerland, of course, is not in the EU). Those working for wages don't have as much agility as those with independent income.

Look at what happens in the US when companies locate a facility. In many cases they 'shop' states and counties to see where they can get tax exemptions or other favors.

Half Sigma December 19, 2006 at 11:18 am

"Your first belief in regards to the story is rather odd to me. I think people do not want as much for themselves as much as they dont want to see the fruits of their efforts pissed away by politics."

There's nothing in the story about "fruits of efforts" being "pissed away."

Just a rich guy who moves to a different country so he can avoid paying taxes. How many people in the U.S. have a house in Florida so they can avoid state income tax?

Rich people want to keep as much for themselves as possible and not share.

Doinkicarus December 19, 2006 at 12:01 pm

This doesn't surprise me at all. When I was studying in France, my host-mother told me that tax-evasion was the French national past-time, followed closely by soccer and cycling. If I'm not mistaken, the French income tax system is less "efficient" than the American model, which leaves most frenchmen plenty of fudging room. Most frenchmen are under the government radar, per se. Not so for a celebrity like Hallyday.

Keith December 19, 2006 at 1:39 pm

Quote from Half Sigma: "Just a rich guy who moves to a different country so he can avoid paying taxes."

If he lives in another country, how is he avoiding taxes?

Quote from Half Sigma: "Rich people want to keep as much for themselves as possible and not share."

Stupid socialist people want to take as much as possible from others and not work.

Half Sigma December 19, 2006 at 2:53 pm

Keith, I'm not sure exactly what you're disagreeing with. The whole basis for free markets efficiently allocating resources is that everyone works to maximize their self-interest, which is to have as much for themselves as possible.

Lafayette December 20, 2006 at 7:54 am

"France's top rock star, Johnny Hallyday, must have spent too much time in the U.K. and the U.S., for he seems to have absorbed the selfish Anglo-Saxon penchant for not wishing to be used and abused by government. "

Oh, come off it! Johnny is as rich as Croesus. Abused by the French government? Then why does he hobnob on French TV with France's President?

As for the high taxation on exorbitant "star salaries", know that these revenues go to pay for a medical system that is tops in the world (WHO 2000 study of global health systems) – in fact, it is N°1.

Where in the ranking is the US? Thirty-sixth. Why? Because the prime weighted criteria was "access to the health system" where the US does about as well as the better African countries. At any time in America, nearly 15% of the work force is without medical coverage.

The aggregation of national wealth in the upper strata of American society is shameful. And, we think that the government is abusing mega-stars with mega-bucks? Or, mavens who manipulate all-too-easily financial market instruments? Or, CEOs that are monstrously overpaid even when shareholder performance is nil?

Yeah right, when pigs sprout wings …

Lafayette December 20, 2006 at 8:07 am

"To imagine Elvis Presley moving to Monaco is to imagine what it was like in France when the veteran rocker Johnny Hallyday announced he was leaving the country for Switzerland."

Do you know what you are talking about? Do you know how many American millionaires keep Monaco afloat?

How many of the Russian and Italian mafia? How many people who made money in their countries and have scampered to avoid income taxes?

Anybody know of a "self-made" man, rich and prosperous, who came into his wealth living alone on an island? Of course not. It is markets that make people rich and it is ordinary people who constitute market players. We are all part of a social context within which we live, work and enrich our lives both intellectually and financially.

That doesn't mean that we have no social obligation to contribute to its upkeep, its defence, and its commonwealth – this latter meaning the welfare of its people. Only the state can attend to that and it does so by collecting taxes and redistributing the wealth in terms of social services.

But, 80% of the wealth going to 20% of the population indicates a major distortion in the way markets function – meaning a small social stratum takes the lion's share of the gains. This sort of social injustice is intrinsically unfair. It is also a menace to social harmony.

Between welfare for the poor and welfare for the rich, there has to be a middle ground. We've just not found it.

Lafayette December 20, 2006 at 9:44 am

"I think people do not want as much for themselves as much as they dont want to see the fruits of their efforts pissed away by politics."

That is no less a subjective judgement than the one you question.

Defence of the nation is "pissing away" taxpayer monies? Improving a mediocre secondary school education, the same? Basic health care for those without it, the same? Bringing down America's notorious neonatal death rate, the same? Addressing the pandemic of obesity, the same? Putting up decent dikes to protect blacks in New Orleans, the same? (Ad nauseam …)

Just where, pray tell, does the "pissing" start? When Bill Gates pisses his wealth away on the poor in Africa, that's different though, isn't it? After all, that's "Bill's money", so he can do whatever he wants with it.

This individualist attitude is precisely the attribute that distinguishes Europe from the US. Do explain, please, where the founding fathers put in the Constitution that aggregating billions to the comparatively few rich was a fundamental economic liberty worth dieing for? (Maybe the Declaration of Independence should read "life, liberty and the pursuit of a mega-buck in net worth"?)

Or, is it quite simply that a more base instinct is at work? Some people measure their lives by the number of zero's in their net asset worth accounts?

Quelle petitesse …

Lafayette December 20, 2006 at 9:52 am

"Americans living overseas don't pay taxes on the first $80,000 they make."

Why should we? We are bled dry from the very first Euro that we earn here.

Besides, what does the US government do for expats? Pay for my kid's schooling? Pay for the police watching over my life and limb? The local Fire Department? (No, that can't be, my little village in the boonies of France has an all volunteer fire department.)

My taxes pay for a notoriously over-used but nonetheless first rate Health Care system. The French need it. They are, per capita, more fervent pill poppers than even the Yanks.

Lafayette December 20, 2006 at 10:05 am

True Liberal: "… is the OECD solution to predatory tax competition. (Groan!)"

It might help your understanding to know that the overwhelming proportion of EU state revenues is from the Value Added Tax (a sales tax).

Income taxes are so easily finagled that they do not provide the best source of tax revenue for a government. In France, one household out of two pays NO income tax.

So, de facto, the major part of tax revenue in the EU is a flat-rate tax (which averages between 19 and 22%) but not on income … on expenditure. This means that the VAT is highly regressive – the poor bear far, far more of the burden than the rich.

Which is all the more reason to super-tax the super-rich, like Johnny Hallyday, such that they compensate in bearing more of the tax burden.

In the US, you have BOTH far less sales tax and far, far less income tax. This means: All that much more "in the pocket" money with which to indulge your slightest whimsy.

Stop complaining.

JohnDewey December 20, 2006 at 11:03 am

lafayette: "The aggregation of national wealth in the upper strata of American society is shameful."

What is shameful about it? I'm proud of our system which lets the hardworking and talented citizens keep most of their income.
Why should we want anything else?

JohnDewey December 20, 2006 at 11:13 am

lafayette: "This means that the VAT is highly regressive – the poor bear far, far more of the burden than the rich."

How can that be true? The VAT tax must be born by the final consumer. If a rich man consumes more than a poor man, he must be burdened with more of the VAT. Are you arguing that a poor man consumes more than a rich man?

More likely, you mean that the poor man's consumption makes up a larger portion of the poor man's income. So that the effective tax rate of the poor man is higher. But the rich man still consumes more, doesn't he? And the taxes on the rich man's consumption still pay for a larger part of France's roads and military and health care system, right? Why is that even just? If the rich man and the poor man have equal access to the roads – if they are equally protected by the French army – if they have equal access to the health care system – then how is it fair for the rich man to pay more taxes?

The only fair tax is not a flat rate tax, but a truly flat tax. If it costs $500 billion to run a government for 100 million citizens, then each citizen's burden should be $5,000. That's a fair tax.

JohnDewey December 20, 2006 at 12:34 pm

lafayette: "Do explain, please, where the founding fathers put in the Constitution that aggregating billions to the comparatively few rich was a fundamental economic liberty worth dieing for?"

Where in the U.S. constitution does it prohibit citizens from enjoying the benefits of their free trade of goods and services? including the aggregation of billions of dollars?

True_Liberal December 20, 2006 at 9:16 pm

The "upper strata" tend to do a better job finding markets for their talent, and do a better job spending their wealth. Keeps homebuilders/boatbuilders/planebuilders gainfully employed, if they do a good job at a competitive price.

It's how wealth is created. (At least they don't mint a million dollars' worth of pennies at a cost of $1.73 million, like our government does.)

Lafayette December 21, 2006 at 2:32 am

"Keeps homebuilders/boatbuilders/planebuilders gainfully employed, if they do a good job at a competitive price."

And, you think that is sufficient "raison d'être" for the super-rich? I pity you.

You are genuflecting at the altar of conventional wisdom, which dictates that a liberal market decides everything fairly – from income to wealth distribution. Based upon a distorted notion that personal liberty prevails over collective rights.

I don't agree, which is why I proposed my metaphor of the sole individual on an island. There is no way on earth that s/he is going to get rich, or employ architects and house builders.

We live in a collective, a community that is both local and national. And, the price of the entry ticket is to contribute morally and financially such that life's inequalities are not prejudicial to any one group or class. That particularly a basic quality of life is available to those in the poorest strata, whose precariousness is most great.

Not only, our duty is to assure that all who with the motivation have a chance to succeed – and for that the highest level of training / education is necessary. Only state subvention can assure such – one need not indebt themselves as a pre-condition to having decent academic qualifications with which to start a career. (I could go on, but those few examples suffice.)

Eighty-percent of the wealth generated by an economy garnered by 20% of the population IN NO WAY satisfies the criteria of fairness. (Reynolds be damned.)

The indecency of a nation as rich as the US pissing away its wealth away in a foreign sandbox whilst people die from government malfeasance in New Orleans … it is obvious to anyone with common sense.

JohnDewey December 21, 2006 at 7:44 am

lafayette: "whilst people die from government malfeasance in New Orleans"

Very few people died because of government malfeasance. Thousands of New Orleans citizens were at risk because they so dependent on government welfare they couldn't accomplish a simple task on their own: escape the floodwaters they knew were coming. A very small percentage did not have the physical means to escape. Only a fool would continue to live below sea level if he had not the ability to evacuate on his own.

JohnDewey December 21, 2006 at 7:54 am

lafayette: "our duty is to assure that all who with the motivation have a chance to succeed"

Sorry, but that is not my duty. There are winners and losers in life, and all the government programs in the world will not change that. At most, a government should offer the legal and financial structure to give people the chance to build on their talents – which the U.S. does better than anywhere else on earth. Beyond that, it's up to the individual to succeed or fail, and to suffer the consequences himslf if it's the latter.

Do you doubt the U.S. offers more opportunity than anywhere on earth? I know of no other nation that is more desired by emigrants; no other nation where so many immigrants have started with truly nothing and accumulate great wealth – and still do so today.

True_Liberal December 21, 2006 at 12:56 pm

Lafayette: "Not only, our duty is to assure that all who with the motivation have a chance to succeed – and for that the highest level of training / education is necessary. Only state subvention can assure such – one need not indebt themselves as a pre-condition to having decent academic qualifications with which to start a career. (I could go on, but those few examples suffice.)"

This, of course, readily explains why folks with only minimal education are able to succeed grandly in business, while their 6th-grade classmate who progressed to a postdoctoral thesis lives in relative poverty.

Lafayette January 4, 2007 at 6:34 am

JD: "Where in the U.S. constitution does it prohibit citizens from enjoying the benefits of their free trade of goods and services? including the aggregation of billions of dollars?"

Then you are blind to any collective social responsibility. You are applying the Darwinian notion of survival-of-the-fittest.

That, to my mind, is NOT the purpose of society, that a comparative handful or people cherry pick the best and the rest can all go to hell. Do you know that your chances of getting rich by the sweat of your brow, in America, are about as good as winning a state lottery? So, why sweat? Buy a lottery ticket … at least the proceeds go to supporting a school system.

That is also why the Russians inevitably toppled the Tsar. What's the difference between Russia in 1914 and America today? Answer: Americans are sheep who take it for granted that a plutocracy was God's gift to America.

Lafayette January 4, 2007 at 6:41 am

JD: "This, of course, readily explains why folks with only minimal education are able to succeed grandly in business, while their 6th-grade classmate who progressed to a postdoctoral thesis lives in relative poverty."

What in heavens name does that have to do with the price of beer in China.

ANYONE who succeeds in America does so because they are part of larger collective which provides them a market economy in which to enrich themselves. Without that market economy they are nothing and will forever be nothings. Without the community is there so common protection, no basic services, no common identity and no common national purpose.

Try living on your own in the woods. See how rude life can be. Well, that is EXACTLY what you expect of the poor.

What is missing in your comment is a basic respect for human dignity – of the kind that says we are not all equal but those who are more equal should assist those who are less equal.

And the inequality in America is a glaring fact. Eighty percent of the wealth is garnered by 20% of the population. And, you think that either (1) God meant it to be that way, or (2) that is the law of the jungle in which we live.

Either way, the belief is exceptionally stupid.

Lafayette January 4, 2007 at 6:51 am

TL: "This, of course, readily explains why folks with only minimal education are able to succeed grandly in business, while their 6th-grade classmate who progressed to a postdoctoral thesis lives in relative poverty."

So what? What matters is that EVERYONE has more than a minimal education – and only the state (by means of taxation) can provide such.

Your analogy is way off base. Not all Americans have a "minimal education" and not all Americans with a post-doctoral thesis live in poverty.

Get real. America is a tremendously huge middle class that lives all too well.

The chances of anyone making a huge fortune by dint of hard work are about as great as winning a lottery ticket. Most people do NOT win a lottery, even if that dream consumes their lives. To each their own delusions … America has made getting immensely rich one of them.

America can do just fine without mega-buck plutocrats … who get into office and start foreign wars out of a warped sense of democratic manifest destiny.

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