Ultimately Sarkozy wants to link taxation with nationalism, similar to what the US does for its own personal taxation model. In both systems, expats can claim tax credits for taxes they have paid in their home country.
Mr. Jean-Laurent Rosenthal, a professor of economics and French politics at Caltech University, told Asia Outbound that the Sarkozy pledge is largely a political move to attract the lower class vote for reelection.
he wealth tax is largely a political move on his part to make him seem less uncaring of the poorer people. During Sarkozy first term he focused on a relatively liberal agenda, lower taxes on the wealthy (to spur investment) and liberalizing labor markets. What ever sense this agenda may make from an economist point of view, it has not worked in practice, so he has to offer change. /p>
Sarkozy said the people who work abroad or live in a different country would not be affected by the new plan, which will only apply to the taxation of interest, capital gains, and dividends. But according to Rosenthal, this will not be easy to enforce. ollecting taxes on the wealth of expatriates involves two parts. A. Taxing the wealth they hold in France (say a bank account in a Parisian bank or a house in the country) that is relatively easy and make sense. B taxing the wealth they hold abroad, that is much more difficult. /p>
It would also only affect HNWI who leave France solely to avoid paying the country taxes, which are considered relatively high compared to the U.S. and other European nations. They would be forced to tell the French tax authorities the amount of tax they have paid in the country they are living in on their income. If this is lower than the tax charged in France, they will be charged the difference between the two.
A recent poll that was conducted after his speech claimed that seven out of ten French citizens supported the tax. Sarkozy claimed the measure would raise at least 500 million euros in taxes ($663 million).
Rosenthal believes that HNWI Chinese should be aware that taxes would rise. hould potential Chinese immigrants to France be worried about this? It is not likely to be a heavy tax, but given the long run fiscal imbalance of most Western European it is safe to say that taxes will rise. /p>
