- Days left

Taxing the Rich: Americans Have It Good, Compared to the French

×
Gerard Depardieu has become the latest to surrender his French passport and social security benefits, choosing to move to a bordering town in Belgium that's attracting many of France's wealthiest expatriates.
French actor Gerard Depardieu moved to Belgium to avoid France's high taxes on the rich. (Photo: AP)

With all of the chatter about class warfare and tax rates likely going up next month for high earners, it's important to remember that wealthy taxpayers in some countries have it worse.

America's rich will, for the most part, not be applauding when they see the top rate on qualified distributions jump from 15 percent this year to potentially as high as 43.4 percent in 2013.

Perhaps they should be glad that new rates will be so low: France is boosting the top tax rate on its wealthiest residents from 48 percent to a rate as high as 75 percent -- and inducing many business owners and celebrities to bid their home country adieu in the process.

Departure of Depardieu

Iconic French actor Gerard Depardieu has become the latest to surrender his French passport and social security benefits, choosing to move to a bordering town in Belgium that's attracting many of France's wealthiest expatriates.

It seems like something drawn from the pages of an Ayn Rand novel. There's an exodus by some -- though clearly not all -- of the country's most financially productive citizens. Revenue-hungry France thought that taxing the rich would be an easy fix to its problems. Instead, it may go from collecting 48 percent of earnings from some of them to zero percent.

If France wants class warfare, the rich can afford to move out if they don't want to be richly taxed.

Pardon My French

Come 2013, a 75 percent tax will be applied to those earning more than $1.3 million a year. President Francois Hollande is also raising the taxes that the well-to-do pay on capital gains and on household wealth.

If a successful businessman leaves, France may take a hit, but it's taking Depardieu's departure personally.

He's prolific. He's a tastemaker. The French government's strategy is to call him out as a traitor, but it may backfire. While France's prime minister is calling him "pathetic" for leaving, Depardieu is fighting back.

"I'm leaving because you think success, creation, talent and anything different should be punished," Depardieu wrote over the weekend in France's Le Journal du Dimanche, claiming that he has paid roughly $192 million in taxes over the past 45 years, employing 80 people in his businesses.

It's a Taxing Dilemma

Who is right here?

Class warfare played a major part in the U.S. presidential election last month, and it seemed like a smart tactical move at the time. Pitting 98 percent of the country against the wealthiest 2 percent made mathematical sense at the polls.

However, what happens if America's wealthiest citizens get fed up?

The highest tax rates in this country are a far cry from France's soon-to-arrive 75 percent, and wouldn't even approach France's old rate under the most far-fetched scenarios coming out of Washington today. But picking on a class that's an important contributor to a country's bottom line can prove to be a risky strategy.

Proponents of raising tax rates only on the wealthy may rightfully feel that they are the ones that can afford to contribute the most, but there's never a shortage of countries open to taking in the world's wealthiest citizens.


Increase your money and finance knowledge from home

Economics 101

Intro to economics. But fun.

View Course »

How much house can I afford

Home buying 101, evaluating one of your most important financial decisions.

View Course »

TurboTax Articles

Deducting Mortgage Interest FAQs

If you're a homeowner, you probably qualify for a deduction on your home mortgage interest. The tax deduction also applies if you pay interest on a condominium, cooperative, mobile home, boat or recreational vehicle used as a residence.

What Extra Tax Deductions Should I Make Sure To Take?

The federal government offers tax deductions and credits to reduce taxable income under certain circumstances. There are several that are often overlooked, including deductions for job hunting, caregiver expenses for dependents and children while you work, a credit to reduce taxes for moderate- to low-income earners and the premium tax credit associated with the Affordable Care Act. TurboTax can help determine if you qualify for these credits and deductions.

Fatten Your Paycheck and Still Get a Tax Refund

If you usually get a tax refund, but would like to start putting more money in your pocket every month, we can help. Yes, you still have to fill out a W-4 form. But we've developed a quick and easy guide to assist you.