75 Percent Tax Rate? Sacrebleu!
July 2, 2012
The new government in France is proving how easy it is to drive businesses away with high taxes. The French Socialist party headed by Francois Hollande, which won a majority of seats in the June 17 election, campaigned on a platform of taxing incomes of more than 1 million Euros (approximately $1.26 million) at a marginal rate of 75 percent. This presents a large increase from the current top rate of 41 percent and causes many businesses to consider leaving the country.
Numerous businesses have already moved, or are rumored to be moving their management out of the country to protect their executives from the jump to 75 percent. Sword Group, a software firm, and Eurofins Scientific, a bio-analytics company, made plans to move their businesses to Luxembourg even before the results of the election were announced. The parent company of Yves Saint Laurent, a traditionally French brand, is reported to be planning to move their executive committee offices to London.
David Cameron, Prime Minister of Britain, has begun to woo French businesses, saying, “If the French go ahead with a 75 percent top rate of tax we will roll out the red carpet and welcome more French businesses to Britain…” Britain provides an attractive offer for those looking to move from France. They recently cut their top income tax rate from 50 to 45 percent after they found that the increase raised only one-third of the revenue it was expected to raise.
As Marc Simoncini, a French entrepreneur asked, why would anyone want to start a business in the most taxed country in the world?
More about international taxes here.