July 22, 2006

Saturday Night Scene

Filed under: General — Tom @ 6:13 pm

Scene

Weekend Question 2: Why Are Many of the Wealthy French Voting with Their Feet — And Leaving France?

Filed under: Economy,Taxes & Government,TWUQs — Tom @ 2:20 pm

Answer: Because the country’s hideous wealth tax makes it unattractive, and sometimes nearly impossible, to stay.

From last Sunday’s Washington Post (bolds are mine; HT Don Luskin):

Old Money, New Money Flee France and Its Wealth Tax
Sunday, July 16, 2006; A12

PARIS — Denis Payre, a self-described French jet-setter, built a successful high-tech company from scratch, then decided to quit at age 34 to spend more time in France with his wife and young children.

Instead, Payre said, he was pushed into exile by the French government, which sent him a tax bill of nearly $2.5 million on paper assets he couldn’t cash in.

“They were asking me to pay taxes on money I didn’t have,” Payre said. “I had no choice but to leave the country.”

Payre, who moved his family to neighboring Belgium eight years ago, is today part of a sizable community of rich expatriate French driven out by the world’s highest tax bills on wealthy citizens. The exodus continues: On average, at least one millionaire leaves France every day to take up residence in more wealth-friendly nations, according to a government study.

At a time when France is struggling to stay competitive in an increasingly integrated world, business leaders say the country can’t afford to make refugees of some of its most established business families. They include members of the Taittinger champagne empire, the Peugeot auto magnates and leading shareholders of dominant retailers Carrefour and Darty. Also going are members of a new generation of high-tech entrepreneurs.

Socialist leaders and some government officials argue that the rich are merely trying to shirk their social responsibilities by fleeing the country with their millions.

“France is penalizing success in a big way,” argued Payre, who is now 43 and has started a new company in Brussels that he said did nearly $32 million in business this year. “The loss in income for the government is the smallest part. The big issue is the loss of all that creative energy this country is dying for.”

Payre said that when he decided to leave his high-tech company, Business Objects, in 1997, he owned shares that were worth $110 million — on paper. French tax authorities required Payre to pay a wealth tax of 2.2 percent on the shares, based on what the shares would have been worth had he sold them at the market’s highest point.

But Payre said that he didn’t have access to them because of stock market regulations that limited his ability to sell and that, in any case, a market dip had devalued the shares below that peak.

The wealth tax — officially called the solidarity tax — is collected on top of income, capital gains, inheritance and social security taxes. It’s part of the reason France consistently ranks at the top of Forbes magazine’s annual Tax Misery Index — a global listing of the most heavily taxed nations.

Wealthy citizens’ tax bills can be higher than their incomes, according to tax analysts.

….. “This tendency to take from the rich and give to the poor which is supposed to solve all the problems in France is ruining the country,” said Alain Marchand, who left France six years ago and now has a London-based consulting business that helps relocate French business leaders and entrepreneurs in England and other countries. “That’s an incredibly stupid and narrow-minded vision of economic life.”

Eric Pinchet, author of a French tax guide, estimates the wealth tax earns the government about $2.6 billion a year but has cost the country more than $125 billion in capital flight since 1998.

Business organizations and financial consultants say members of the new generation of business school graduates and high-tech entrepreneurs — who see the tax structure as penalizing not only individuals but also companies’ ability to compete — are especially likely to flee the taxation.

In France, employers are required to pay social security taxes equal to 48 percent of each employee’s salary. Labor laws make it difficult and costly to fire incompetent workers. “The way the French state is organized makes it impossible for big family corporations to stay on French soil,” said 44-year-old Virginie Taittinger, who moved to Brussels two years ago. “If you add up all the taxes an employer has to pay — social taxes, employee taxes, the wealth tax, taxes on profit — even a successful business has a hard time surviving.”

The French seem congenitally unable to do anything about this financially suicidal situation, even in the face of clear evidence of huge tax revenue losses from those fleeing.

Remind me again: Why should our country, newer EU members, or anyone else in the developed world for that matter be interested in imitating this colossal socialist nightmare?

Paying the Price: Another Week, Another Pair of Stock Dives at The New York Times and Tribune Companies

Filed under: Business Moves,Economy,MSM Biz/Other Bias — Tom @ 12:15 pm

Biased, seditious, and ignorant actions have consequences:

The New York Times Company fell $1.59, or 6.7% (link opens in new window) during the just-completed week:

NYT072106

The stock hasn’t traded below $22 since October 15, 1998.

The Tribune Company, parent of, among others, the Los Angeles Times, was lucky — it dropped $1.67, or “only” 5.4% (link opens in new window):

TRB072106

The S&P 500 was up a very slight amount (0.3%) this past week.

Weekend Question 1: When Is a Lawyer Not a Lawyer?

Filed under: Business Moves,Economy,TWUQs — Tom @ 10:14 am

Answer: When a lawyers’ association changes its name to shield its true nature.

From a subscription-only editorial in The Wall Street Journal:

Lawyers Anonymous

What’s in a name? More, it would seem, if the name doesn’t contain the words “trial” or “lawyer.”

At least that’s the hope of the Association of Trial Lawyers of America, which today will ask its membership to vote to give that 60-year-old political lobbying institution a brand new moniker. ATLA’s board of governors already resoundingly approved a switch, voting 91-5 last month to drop any reference to the lawyerly profession, and instead go with the impressively unspecific and high-minded “American Association for Justice.” No word yet whether Webster’s will formally protest.

Driving this switcheroo is ATLA’s concern that more and more Americans are under the impression that trial lawyers are less interested in justice than they are in generating frivolous lawsuits that pad their own bank accounts.

You don’t say?

The “American Association for Justice” (AAJ) sounds like a cousin to International ANSWER, which in the circumstances is closer to the truth than it should be for “officers of the court.”

___________________________

UPDATE: Americans for Prosperity had a little fun with this. You must see their suggestion for the AAJ’s new logo.

Positivity: Teenage Heroes Carry Off Sea Rescue

Filed under: Positivity — Tom @ 7:14 am

In South Wales, the resuers included Britain’s youngest lifeboat helmswoman (HT Good News Blog):

Teenage heroes hailed for sea rescue
Jul 14 2006

….. Ella Du Breuil was on a routine training exercise when the skills she has been honing since becoming the UK’s youngest ever lifeboat boss were dramatically called into service.

The 19-year-old was on hand when coastguards alerted the RNLI to the plight of two men trapped near Nash Point Lighthouse, near Llanwit Major, on Wednesday evening.

Ella, a former student at Atlantic College, St Donats, was leading a team of six students in the college’s boat when they received the call.

Dean Webster and Adrian Hoare, of Rhondda, had been left stranded in the sea after being cut off at high tide in one the most dangerous parts of the Bristol Channel.

The waters were too rocky for the boat to safely navigate so brave Ella, the youngest person ever to qualify as a lifeboat helmswoman at 18, leapt into the sea.

Despite thinking she had dislocated her shoulder on the treacherous rocks, she led the successful rescue on Wednesday at 6.30pm.

Working with fellow former student Alex Evans, also 19, they brought the two men back safely with lifejackets and a line.

Ella said: ‘I am proud to be the youngest person ever to take the helm but I don’t think about that when I am out in the boat. As I was swimming towards the two men I was bashed against the rocks and I injured my shoulder.

‘It felt like it had popped out, but I didn’t really think about it at the time because I was so focused on getting the men to safety and I was running on adrenalin.

‘One of them said he couldn’t swim and was in a bit of distress, so I took him back to the boat first.’

Alex, who also studied the Baccalaureate at the college where the lifeboat team is based, said: ‘After Ella got back to the boat with the first man I went in.

‘I injured my shoulder in exactly the same way as she did, but I realised that I had to help get the men to safety. It was very dramatic but very satisfying. It all happened so quick. Even though she is the youngest person to take the helm I am actually younger than her.

‘But age doesn’t matter when you have to save people.’