In May, Eduardo Saverin, a co-founder of Facebook, attracted a lot of attention for renouncing his US citizenship and moving to Singapore in order to avoid US taxes. I was reminded of that story this morning when I saw that Gerard Depardieu, a French actor (who I think you’ll recognize even if, like me, you don’t watch a lot of French films), was making a similar move. Depardieu is moving from France to neighboring Belgium where taxes are significantly lower.
In a parting letter, Depardieu said, “I am leaving because you consider success, creation, talent must be punished.” The new French government is planning to raise taxes on the rich to a whopping 75%, so it’s no surprise that Depardieu – and probably many others – are starting to think about other places to park their assets. 75% certainly seems punitive to me.
These two are hardly unique. I lived for many years in Scotland, home of Sean Connery. But Sir Sean, while being a proud Scot and advocate for Scottish independence, doesn’t actually live in Scotland, where taxes are high. Instead, he lives in the Bahamas, where they’re lower (and where the weather is better to boot).
This should serve as a warning to US politicians who see ever increasing taxes on the rich as the way to address our current fiscal crisis. At some point, people will start to leave. Whether it’s Saverin, Depardieu, Connery, or other successful businessmen and artists, people will look for ways to keep more of the wealth that they’ve earned through years of hard work and smart investment. Raise taxes too much, and you’ll lose these folks from the tax base entirely. Better to attract them with low tax rates, and let them build businesses and make movies here.
