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Fairness Doctrine Backfires: After Depardieu Backlash, French FinMin Says Superrich Tax "Plan B" Would Be Temporary

Tyler Durden's picture




 

Back in July, when news of what we dubbed the French "Fairness Doctrine" first emerged, i.e., the new socialist government's intent to tax the evil millionaires at a 75% tax rate, we had two observations: i) that "we are rotating our secular long thesis away from Belgian caterers and into tax offshoring advisors, now that nobody in the 1% will pay any taxes ever again" and, somewhat contradicting the above, ii) that "The good news is that with the entire world set to adopt 100%+ taxes on "wealthy" individuals as defined arbitrarily by Ph.Ds, there will be no place to hide." Well, the US promptly followed France into a lite-version of the Fairness Doctrine, which proved us half right, yet one place that has refused to increase its tax rate for the poor or rich, keeping it at the flat 13% for individuals is Russia, which explains why following last week's news that Russia had granted famous French expat millionaire Gerard Depardieu citizenship, the actor best known as Obelix and Rasputin, eagerly rushed to accept his new red passport in Sochi following a bearhug from none other than Vladimir Putin

And with there being a first fully vetted case study showing that in a world in which not everyone is ready to tax the rich at the same time, the cracks in the French proposal (which in a broke world is inevitable, it is just early: sooner or later a tax on all financial assets everywhere will be imposed, but just not yet) are starting to be visible. Sure enough, minutes ago in a radio interview on France Inter, French Finance Minister Pierre Moscovici said that any measure replacing the 75% income tax (that was deemed unconstitutional by the way) will be "exceptional and temporary", like the original, and not be imposed to "punish those who have succeeded." Just like the Greek ELA program was temporary? Or like the Fed's monetization of Treasurys is exceptional? Or like the immediate response by Depardieu claiming, objectively, that the tax is precisely to punish those who have succeeded?

All those are open questions for the Monsieur FinMin, who also reaffirmed France’s 0.8% growth target for the year (good luck with that), and that temporary nationalization of failed businesses remains a tool for the government to use in only special circumstances, not when the failure is due to isses in the industry (here he is obviously envisioning Peugeot which the government had to bail out recently, as well as the possible nationalization of various Arcelor Mittal assets in the country).

Alas, at this point no self-respecting enterprise will believe a word France's socialist leadership utters, which means that the government will have no choice but to grow (sub-efficient) government jobs on its own, with or without the assistance of the SNB and other various central banks who have been buying French sovereign bonds in recent months.

Finally, confirming that the days of the 75% tax are over is a report in the FT which notes that "France hints at lowering the 75% tax rate", although the trade off is that instead of limiting the surtax to just 2 years, it would be extended for the full 5 years of Hollande's term. Here's to hoping nobody can do simple math in France.

France’s socialist government has hinted that a replacement for its controversial 75 per cent income tax bracket, struck down late last month by the country’s constitutional council, may be at a lower rate but imposed for the rest of its five-year mandate, not just two years as previously proposed.

 

Jérôme Cahuzac, France’s budget minister, said on Sunday: “I find it a little ridiculous that for tax reasons, this man has gone into exile so far to the east.”

 

Mr Cahuzac reiterated in a television interview that the government would formulate a replacement for the 75 per cent measure, which was intended to “incite a bit more prudence and decency in a very rare number of leaders”, in order to reduce pay gaps between workers and executives.

 

He said “part of the parameters” being considered was to run a newly adapted supertax for the rest of Mr Hollande’s term, rather than limit it to two years. But he hinted that the rate would be lower than 75 per cent, pointing out that the constitutional council had indicated that a total tax burden above that level, including other levies, “could be judged as a confiscatory rate” by the council.

There is more good news from the socialists: "He added that the government would not impose any further new taxes after this year. “Tax stability from now is the policy of the government,” he said." What is probably most amusing is that he said the last with a straight face.

And even more good news is that the country which can't afford to spend more cash on social programs will do just that, by "investing" €2 billion into "state-backed job creation schemes in a bid to meet Hollande's bold promise to reverse a trend of fast-rising unemployment by the end of this year."

Well, since the US borrowed the millionaire supertax idea from the French, perhaps France can grab a hint or two from the BLS on how to get its unemployment under control: just hire a few million 60 year old part-time greeters for the local Wal-Mart stores, and watch your unemployment rate collapse to near zero. After all, unlike in the US, France does not have a central bank that is now incentivized to show a weaker employment picture for the coming year...

 

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Sun, 01/06/2013 - 15:25 | 3127399 DoChenRollingBearing
DoChenRollingBearing's picture

Bwa ha ha ha ha ha ha!

Bwa ha ha ha!  Takes a breath....

Ha ha ha ha!

Surrender (again), France!

Sun, 01/06/2013 - 15:33 | 3127414 Ahmeexnal
Ahmeexnal's picture

Russian mailorder brides are becoming hugely popular in serfropa:  marriage is the easiest way to obtain russian citizenship.

 

http://www.ehow.com/how_7446052_obtain-russian-citizenship-marriage.html

Sun, 01/06/2013 - 15:35 | 3127428 Half_A_Billion_...
Half_A_Billion_Hollow_Points's picture

try taxing bitcoins, phd morons

 

1. go to http://www.reddit.com/r/Bitcoin/

2. look at number of subscribers

3. wait 5 minutes

4. press reload, watch higher number of subscribers

5. get the fuck out of the TBTF world; embrace hyperinflation; love The Bernank!

Sun, 01/06/2013 - 16:05 | 3127515 agent default
agent default's picture

Don't be silly.  If bitcoin begins to even remotely resemble anything like  a threat to them, they will just shut down the service overnight.

Sun, 01/06/2013 - 19:45 | 3128067 boogerbently
boogerbently's picture

I didn't know Gerard was such a large part of French GDP !

Sun, 01/06/2013 - 19:52 | 3128094 LouRukeyser
LouRukeyser's picture

Speaking of large check out the size of those hands.  He could crush Putin's noggin in an instant.

Sun, 01/06/2013 - 22:46 | 3128545 boogerbently
boogerbently's picture

Like shaking hands with a bunch of bananas.

Sun, 01/06/2013 - 16:26 | 3127568 Matt
Matt's picture

While I like the idea of crypto-currencies in general, and really want to see bitCoin evolve into a successful currency, it has many issues:

1) It seems typical for it to take about an hour for a payment to be confirmed. Longest was 36 hours for a complex transaction exceeding 1100 bytes.

2) the mining pool operators collect all the transaction fees, without investing the CapEx into hardware that the miners do.

3) processing transactions is optional for miners

4) the largest bitCoin mining operation is a giant bot-net; someone is stealing processing power, electricity, etc from millions of computers to hoard vast amounts of bitcoins.

5) less than 10 percent of the existing coins are in active circulation. Most coins have only changed addresses once, to move from online hot storage to encrypted offline cold storage.

6) KYC and AML laws, along with taxation, means bitcoin could easily become a target for TPTB.

Sun, 01/06/2013 - 16:27 | 3127572 orangegeek
orangegeek's picture

Here's how you tax bitcoin.

 

CIA shows up at ISP's hosting their servers and terminates with extreme prejudice.

 

Very taxing.

 

Don't worry, the UN will save you after their coffee break and only from 9a-4p on weekdays, excluding holidays.

Sun, 01/06/2013 - 16:32 | 3127584 Muppet Pimp
Muppet Pimp's picture

2013 Silver Eagles go on sale (for the year) on Monday right?

Mon, 01/07/2013 - 19:23 | 3131085 toncuz
toncuz's picture

That's ok...as soon as the world wakes up, they'll learn that a tax on assets with ZERO tax on income is the eventual way. Google "The Single Tax" ...it's the future.

Sun, 01/06/2013 - 17:50 | 3127754 negative rates
negative rates's picture

France will rise again, or else.

Sun, 01/06/2013 - 19:14 | 3127966 williambanzai7
williambanzai7's picture

GERARD DEPAROMANOFF

Sun, 01/06/2013 - 19:13 | 3127960 ball-and-chain
ball-and-chain's picture

Screw the rich.

We ought to tax them more.

Trickle down economy.

What a crock of shit.

http://www.angrysinner.blogspot.kr/2013/01/saturday_7.html

Sun, 01/06/2013 - 15:25 | 3127402 kliguy38
kliguy38's picture

Thnk G-d ....we've all been save.......sans pics of Bridget Bardeaux topless in Moscow........

Sun, 01/06/2013 - 15:28 | 3127407 Karlus
Karlus's picture

Lies lies and more lies.

 

Russia knows exactly what it is doing with the 13%. Now if you are a big hitter, your "effective" rate is higher b/c you need to kick back Putin's people, but I do love them for taking a piss on the French.

 

Viva la Socialism!

Sun, 01/06/2013 - 17:21 | 3127684 macholatte
macholatte's picture

Russia knows exactly what it is doing

 

No shit!   Putin is on a roll.

It's amazing how the sheeple fall all over themselves to to crusify a business man who makes money & creates jobs (not bankers) but think entertainers are gods.  Time to puke.

Sun, 01/06/2013 - 15:28 | 3127409 Rastadamus
Rastadamus's picture

Depardieu has a dowagers hump.

Sun, 01/06/2013 - 15:32 | 3127417 akak
akak's picture

No, that's just the counterweight that balances his nose.

Sun, 01/06/2013 - 15:29 | 3127410 bank guy in Brussels
bank guy in Brussels's picture

A lot of people may be preferring a Russian passport soon

Including and especially many Americans

America has its 'green card'

Will Russia have a 'red card' or some such programme for a lucky few?

Mon, 01/07/2013 - 04:19 | 3128936 Cap Matifou
Cap Matifou's picture

Learn Russian, we may end up there as refugee or POW.
BTW, Nixon suspended the gold standard also only temporarily.
http://www.youtube.com/watch?v=iRzr1QU6K1o

Sun, 01/06/2013 - 15:31 | 3127415 Motorhead
Motorhead's picture

Good for Depardieu!

But Gerard looks like he could sure lose a stone or two.

Mon, 01/07/2013 - 02:35 | 3128867 Joe moneybags
Joe moneybags's picture

Looks like Depardieu could use about 3 passports.

Sun, 01/06/2013 - 15:35 | 3127424 Payne
Payne's picture

They are taking lessons from CA where Jerry Brown promises all increased taxes are temporary. 

 

Russian brides are becoming more marketable by the minute.

 

Sun, 01/06/2013 - 15:34 | 3127425 Mister Ponzi
Mister Ponzi's picture

The French do not understand the east anyway. Ten years ago, President Chirac told his counterparties in Poland, Czech Republic etc. to shut up. How can there be countries that favor open markets, the absence of state interventions into markets, and see capitalism as a solution, not a problem. When Czech President Klaus told the European Parliament that it was not capitalism but its absence that caused the financials crisis, some MEPs left the house. Recently, a Polish central banker, after lowering the policy rate from 4.75% to 4.5%, told journalists that central banks in the west are probably making a big mistake following their policies of the last few years. No wonder that French politicians do not know how to handle these guys from the east.

Sun, 01/06/2013 - 17:24 | 3127692 JR
JR's picture

Was Orwell’s totalitarian dystopia of total iron-fisted control and subjugation of the people in Nineteen Eighty-Four just entertainment, just literature? No! It can happen and will happen if men such as Vaclav Klaus do not step forward and men such as the Tyler Durdens do not analyze and report the significance of what they say:

"We must say openly that the present economic system of the EU is a system of a suppressed market, a system of a permanently strengthening centrally controlled economy. Although history has more than clearly proven that this is a dead end, we find ourselves walking the same path once again. This results in a constant rise in both the extent of government masterminding and constraining of spontaneity of the market processes. In recent months, this trend has been further reinforced by incorrect interpretation of the causes of the present economic and financial crisis, as if it was caused by free market, while in reality it is just the contrary – caused by political manipulation of the market. It is again necessary to point out to the historical experience of our part of Europe and to the lessons we learned from it." --Vaclav Klaus, Speech in the European Parliament, on EU (Wiki)

ZH: Former ECB Chief Economist Says ECB Is In Panic, As Czech President Warns The End Of Democracy Is Imminent:

http://www.zerohedge.com/news/2012-09-22/former-ecb-chief-economist-says-ecb-panic-czech-president-warns-end-demoracy-imminen

And more on Deparadieu:

From Russia With Love

Vladimir Putin welcomes tax hero Gerard Depardieu with citizenship and a 13% income tax rate.

http://lewrockwell.com/rep4/putin-grants-citizenship-depardieu.html

Sun, 01/06/2013 - 15:35 | 3127429 loveyajimbo
loveyajimbo's picture

That guy will not be around long if he doesn't get his weight under 400 lbs.

Sun, 01/06/2013 - 15:37 | 3127437 Joebloinvestor
Joebloinvestor's picture

France is so fucked.

Adjust the taxation to keep the wealthy from leaving but enough to bleed them dry.

That will kick start investment!

They haven't even fixed their divorce laws yet.

Notairs are corrupt.

Sun, 01/06/2013 - 17:58 | 3127774 Freddie
Freddie's picture

The USSA is probably as bad off as France.  No islamo hopey changey in france. 

Sun, 01/06/2013 - 15:55 | 3127491 chubbar
chubbar's picture

They didn't want a rate in excess of 75% because that would be considered "confiscatory"???? BWAAHHAAAAA!!!

Sun, 01/06/2013 - 15:57 | 3127498 FranSix
FranSix's picture

Uruguay is probably a better tax haven, considering the weather.

Sun, 01/06/2013 - 15:59 | 3127501 Real Estate Geek
Real Estate Geek's picture

Props to Depardieu.  Not only does he have the balls to follow-through and leave France, he looks like he's going to try to plant a couple of busses on President Putin's cheeks.  Wow. 

There is no fucking way would I ever try that move.  Mr. Putin doesn't know that I exist and I'd like to keep it that way.

Sun, 01/06/2013 - 16:00 | 3127503 Zola
Zola's picture

Actually Tyler you are one step behind, there are rumors that Cahuzac is about to announce that the new 75% tax will be actually for 5years (hollande's term) and not 2 years as initially announced and struck down by france's supreme court (on a technicality)

Sun, 01/06/2013 - 16:05 | 3127519 linrom
linrom's picture

According to Doug Cassey all the Russian men are drunks and according to Ukrainians all the Russian women are sluts, it's no surprise to me that Depardieu would want to live there.

Sun, 01/06/2013 - 16:24 | 3127560 Real Estate Geek
Real Estate Geek's picture

They've got hot caucasian women who typically don't have breast implants or tattoos, and are well-educated but blessedly free of American fem-indoctrination.  And they're sluts, too?  That sounds pretty good to me!

Sun, 01/06/2013 - 16:25 | 3127566 orangegeek
orangegeek's picture

And a clear understanding between their vagina and your wallet.

Sun, 01/06/2013 - 18:18 | 3127813 Salon
Salon's picture

Theyhave no problems marrying and remaining loyal to a higher class guy. As long as he treats them right.

In spite of communism the white girls over there are still old fashioned Orthodox ( except they fuck a little bit more before marriage than their grandparents)

They will fall in love with you. Its not just mercenary. Dont chat with one online. It's proly a guy. Go to the Ukraine and spend a month there. You will come home with a bombshell. They are not interested in misogynistic drunks (male ukranians and russians)

Sun, 01/06/2013 - 16:06 | 3127520 urwright
urwright's picture

the entertainment value of these stories...

hollywood is asleep at the wheel insofar as how easily stories here could convert into huge money making stories

redefine comedy

Sun, 01/06/2013 - 16:14 | 3127522 JohnGaltsChild
JohnGaltsChild's picture

A new exit tax will soon be coming to a country near you.

Sun, 01/06/2013 - 16:23 | 3127547 orangegeek
orangegeek's picture

The wealthy take up citizenship in Lichtenstein, Switzerland, Andora, the Channel Islands - and all those other city state places over there.  It's a joke.

 

Americans are doing the same.  Want my money?  FU Barry and Ben.  Have my citizenship.  I'll try the Caymans.

 

Gerard is a bit on the stupid side - making friends with the Russians - who like to empty other's accounts and jail non-politburo types.

 

Try Lichenstein Gerard.  Lot's of mountains and greenery.

Sun, 01/06/2013 - 18:02 | 3127781 Fíréan
Fíréan's picture

Zerohedge is already in Zwitzerland, at least the present ISP is based there.

Sun, 01/06/2013 - 16:22 | 3127554 Martin T
Martin T's picture

Actually it is not 2 billion for 150,000 jobs Tyler, now it is 4 billion given Hollande has promised to reverse the unemployment trend by year end and in order to ensure he can increase slightly the odds in his favor, he has instructed his minister Moscovici to set aside 2 billion more for more of these "jobs"...

You can't make that up.

France is a real sad affair....

Sun, 01/06/2013 - 16:50 | 3127625 Archduke
Archduke's picture

that's rich coming from putin, who went afer the oligarchs and nationalised their assets for tax violations.

Sun, 01/06/2013 - 18:22 | 3127822 Salon
Salon's picture

How does a guy go from nothing under communism to an oligarch post Boris Yeltsin?

It was all state property before. Do you think he paid fair value for it?

It is just one thief (Putin) stealing from another.

Sun, 01/06/2013 - 17:14 | 3127658 TWSceptic
TWSceptic's picture

Gerard Depardieu rules. Hopefully he can inspire more people to follow in his footsteps.

 

The French prime minister actually called his decision pathetic. So stealing other people's money is fine, but trying to protect yourself from theft is pathetic. What a nice world we live in, where sociopaths and thieves get general support from the population and their victims are regarded as 'unpatriotic' and 'traitors'.

Western countries deserve everything that's coming to them. The future belongs to the BRICS.

Sun, 01/06/2013 - 17:42 | 3127736 Waterfallsparkles
Waterfallsparkles's picture

The rich have the Money and Money talks and walks.

Sun, 01/06/2013 - 18:27 | 3127828 Salon
Salon's picture

Captain Obvious should be your avatar

Do like me and try to get rich. It is usually a multigenerational effort.

Be patient. Work hard. Take risk. Live beneath your means.

It is the superwealthy banking elite that must be destroyed. Not the 150 million dollar actor

Sun, 01/06/2013 - 17:46 | 3127743 Waterfallsparkles
Waterfallsparkles's picture

Russia is becoming a Capatilist Society, America is becoming a Communist Society.

Sun, 01/06/2013 - 18:31 | 3127844 TWSceptic
TWSceptic's picture

"Democracy is the road to socialism." Karl Marx

"Democracy is indispensable to socialism." Vladimir Lenin

The logical conclusion is: avoid or protect against democracy.

Sun, 01/06/2013 - 18:29 | 3127821 Manthong
Manthong's picture

And in related developments..

Maybe this will end up prompting Warren Buffett to apply for Russian citizenship.

It might be worth the other consequences.

http://www.france24.com/en/20130105-usa-french-economist-duflo-join-barack-obama-team-policy

Sun, 01/06/2013 - 18:58 | 3127926 mirac
mirac's picture

Depardieu looks to have become a big fat slob.  Any bigger and it's a Montey Python skit.  Give him a "waffer thin" dessert!

Mon, 01/07/2013 - 02:40 | 3128873 Joe moneybags
Joe moneybags's picture

Depardieu should have headed to Japan, and become a Sumo wrestler.

Mon, 01/07/2013 - 04:31 | 3128946 lemarche
lemarche's picture

Switching democracy for dollars... Poor guy.. is hitting rock bottom, must be age...

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