France’s new socialist tax regime is driving wealthy citizens to places like London, Switzerland and New York.
Drastic new political measures, including a proposed whopping seventy five percent tax on citizens who make one million Euros of more, has led many to seek new investment opportunities overseas, and England, Switzerland and the Americas appear to be prime targets.
London-based wealth managers, lawyers and property agents specializing in French clients have stated that the new government’s “soak the rich” policy is forcing the very drivers of their economy out.
The new French president, Francois Hollande, touted himself as “Mr Normal” throughout the spring election. He was able to secure his position by winning the favor of those tired of former president, Nicolas Sarkozy’s, extravagant behavior.
During the campaign, he was quoted as saying: “My true adversary in this battle has no name, no face, no party … It is the world of finance.”
This is disturbing news for the French elite, who may see the restrictive taxes in place by early 2013.
There is little wonder that since this speech, inquiries into overseas properties from the French have seen a 40% increase, according to David Blanc, a partner at Vestra Wealth, a wealth management company based out of London. Other British property managers have seen web traffic from France on their sites rise almost 20% from last year.
Mr. Blanc, a UBS wealth manager, says some French clients were looking into changing their nationality and acquiring new passports in case France attempted to collect from its citizens overseas. “A lot of people are extremely worried,” he said.
The high net worth individuals are also beginning to look to Quebec City and Montreal in Canada, as well as New York City. Luxury property in Manhattan has seen a new wave of francophone investors.
We are living in uncertain times. The European Union is imploding, China and Russia remain politically unstable, and Brazil’s boom has come to an abrupt halt. In the face of uncertainty, there has been a mass exodus of the super wealthy. And many of them are making their new luxury homes in Manhattan.
The wealthy French can feel the guillotine blades being sharpened, and the torches and pitchforks raised, as the lower and middle classes are growing increasingly discontent over the discrepancies of wealth. This mounting hostility is another reason they are leaving.
The big question is, if the wealthy all leave the country – who will be left to tax?
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