Here is a new and big campaign against tax havens. But tax exile will last as long as confiscatory and arbitrary taxes will last. It is the case in France. Should not a tax amnesty be proposed? The IREF is making the proposal that all sorting out that has begun this year should reach an agreement within a short delay and be adjusted at a standard cost of 50% of the total incomes (interests, dividends, add-value)made on these account since 2006. Those who managed their assets through companies or whose accounts were subject to donations or inheritance should not be penalized. Such a measure would yield about a billion euros.
Even with a high rate, it would show to the public opinion that it is not a favor. Indeed, this solution would calm down a lot of families as well as banks and foreign countries pressured by the French administration. At the same time, the Government could declare that, over a year period, a 5% penalty fee would be strictly applied on foreign funds. It would be a real incentive especially when Luxembourg and Austria may accept to exchange information, forcing Switzerland to do so quickly.
The Cahuzac Case was quickly (and cleverly) hijacked by socialists (and also by a significant part of the Right) in order to condemn tax havens. For these clever ideologists, the most important issue lies in tax exile and evasion and not in the Minister of Budget’s lies who lectured French taxpayers. Thus, the fight against tax exile should be strengthened as proposed by Socialist representative Yann Galut who is heading a working group at the French National Assembly aiming at widening the exit tax in order to tax inheritance and track “false tax exiled people”.
This representative should be aware that tax havens exist because tax hells exist too. France is one of the latter. He should also be aware of who are those who are leaving. As shown by Jean-Philippe Delsol, if tax exile departures increased by 5 in a year, the profile of the exiled has changed too. Young and not very wealthy entrepreneurs decide to settle abroad. More taxes and regulations against them will be worth nothing. On the contrary, departures will increase. The priority is actually to deal with real tax exile causes: heavy taxes.
A group of representatives from the UMP (conservative party) proposed a bill on March 28th aiming at enforcing a tax amnesty that would allow French funds settled abroad to come back. Taking example on Italy, the representatives suggest those funds be taxed by a 5% standard fee. Also they proposed a tax franchise on funds that would be reinvested for creating or purchasing French companies. In Italy, 104 billion euros were recovered thanks to these measures implemented in 2010.
Yet this proposal has poor chances to be passed. The IREF, through Jean-Philippe Delsol, aims at being helpful and maybe more realistic. It is a fact that, in spite of unreasonable tax levels in France, a lot of French people who have bank accounts for generations, in Switzerland or elsewhere, would agree to come back if the procedures were quick and easy instead of being confiscatory. Today, none of these French people dare to begin this process, especially since the Ministry of Finance has closed its special service dedicated to this purpose and no longer accept anonymity.
As in Italy, the French budget would benefit from incentives rather than from tax increases or useless regulations. Taxes’ aim is not morale: they must levy money for the Government’s needs. Instead, less tax would be morale since they hamper property and individual freedom. If this would be the case, then less money would be abroad.