One almost feels sorry for the French. Several years ago, supermodel Laetitia Casta escaped to London because of France’s onerous tax regime. This was a a particularly painful blow to French pride since she was selected in 1999 to be Marianne, a symbol of the nation. To add insult to injury, one of France’s most prominent chefs has now escaped to Monaco. The UK-based Times has the details:
France has just lost one of its greatest chefs. Alain Ducasse, the holder of 14 Michelin stars and a worlwide restaurant and hotel empire, has given up his French citizenship for the privilege of becoming a Monegasque, we hear today. Ducasse, 51, whose interests turn over about 160 million million euros a year, has gone into tax exile. He could have chosen Switzerland and kept his citizenship but Ducasse, a southerner by birth, has ties to Monaco, where he owns the three-star Louix XV. Monaco imposes no income or wealth tax on its residents – provided they are not French. …So, the wheeze for French would-be exiles is to become a Monaco citizen – a privilege accorded very sparingly. Prince Albert II has just granted this “sovereign order” to Ducasse. There are only 8,000 Monaco citizens and there is a long waiting list for French candidates. …Because of the wealth tax plus steep income and social security taxes, many high earners and very well off people moved over the past two decades to London, Brussels and other capitals as well as the traditional haven Switzerland. They are not returning in noticeable numbers, mainly because the wealth tax remains and they do not trust their country to reverse policy at the drop of a hat. Sarko has maintained the Impôt sur la Fortune (ISF) as the 26-year-old annual tax is known (the exiles call it Incitation à Sortir de France). The tax gathers relatively little income and drives capital abroad but the public supports soaking the rich, so scrapping it is politically unacceptable.
But Americans should not be overly amused by this story. At least French taxpayers have the freedom to choose another nation’s tax system. The United States imposes an exit tax (a policy almost always associated with despicable regimes such as the Soviet Union and Nazi Germany), making it very difficult for people to dump the internal revenue code.