“Does taxing the richest make them flee abroad? »
Does taxing the richest make them flee abroad? What about it? The Pilgrim deciphers the subject for you.
- Since his election in 2017, Emmanuel Macron has always refused to go through this process to replenish the public accounts. On the eve of the presentation of the 2025 budget to Parliament, its new Prime Minister, Michel Barnier, does not rule out this hypothesis. The richest French people may concentrate the majority of wealth (230 billion euros earned from March 2020 to October 2021), they are proportionally less taxed than the others according to a study by the Institute of Public Policies published in June 2023. This paradox is explained by the composition of income: that of the richest French people comes mainly from undistributed corporate profits (shares, dividends), which remain in family holding companies. They are not subject to income tax, therefore, but to corporate tax. However, the taxation of corporate profits is lower than that of personal income.
- Hence the idea of reestablishing targeted taxes on wealthy people or certain large businesses. The majority of French people are in favor of it. According to the fifth Ademe-Crédoc barometer, published on September 23, 30% of them would like to tax high incomes more. But this measure raises fears of a flight of millionaires abroad. Rightly so: in Norway, the tax measures taken in this direction by the center-left government in 2021 led 33 of these “ultrarich” to emigrate to Switzerland. The same scenario occurred in France when François Hollande came to power in 2012. After the establishment of a 45% tax bracket for the wealthiest 10% of French people and the implementation of the tax scale progressive capital income, the number of people subject to wealth tax (ISF) who left the territory jumped from 555 in 2011 to 907 in 2014.
- Conversely, as soon as the abolition of the ISF was announced in 2017, we observed a drop in the departure of wealthy French taxpayers abroad. A trend confirmed in 2018. According to France Stratégie, however, we must put things into perspective. These movements only concerned a limited number of taxpayers. To limit the attractiveness of certain countries to the detriment of others, Brazilian President Lula is campaigning for the establishment of a 2% tax on the fortunes of some 3,000 billionaires in the world. The proposal is under debate at the G20.