Russian President Vladimir Putin has granted French actor Gerard Depardieu Russian citizenship.
Why? So that Depardieu can pay tax at 13% in Russia (subject, of course, to not living somewhere else that makes higher claim upon him).
According to the Guardian Putin intended this as "a bloody nose" to France. If so he's failed. All he's done is confirm he's willing to debase the sovereignty of his own country by doing grubby deals in the tax haven market where nothing is of value bar the right of the individual to abuse the state of which they are a natural part.
One would hope Depardieu would have the sense to decline the offer, but given it's Depardieu we're talking about that's a very limited hope.
He and Putin seem by their actions to share in the depravity of tax abuse whilst celebrating the idea of citizenship for sale to ensure the abuse of those states that accept their obligations to their citizens, a concept clearly beyond the comprehension of either of them.
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“….bar the right of the individual to abuse the state of which they are a natural part.”
I am not a ‘natural part’ of a state. I choose which state I belong to, and so can anyone else. You seem to think that the state, I assume a courageous one, should have all consuming control over us and especially our money. That’s borderline totalitarian.
Try living without the state
Try choosing a new one at will
Then try living in the real world
Because you’re spouting a myth
Truly a scary post even by your standards – I assume you approve of the North Korean government (for example) forcibly detaining the bulk of its population who want to leave and subjecting them to onerous taxation rates which in many cases amount to total confiscation – that’s exactly what you appear to be advocating here!
I am suggesting that the concept of tax residence should not be so easily shed as Putin and Depardieu would seem to wish
And why not?
There’s nothing scary about this. It’s just a mater of paying one’s dues. Only the dishonest have a problem with that as far as I know
I’ve done exactly that. I moved country (at will), work there and now don’t have any financial obligations to the UK.
Nor do I need the state to intrude into every aspect of my life, on its own behest, then forcibly demand ever increasing taxes for the pleasure – not least thanks to the state’s own incompetence in providing those services.
A few examples. My medical insurance is far better and far cheaper than what I would pay for the NHS via taxes. State schooling is far poorer than the independent school alternative, yet costs almost as much per student per year. My electricity and water are provided for privately. Indeed, even my private security is cheaper and more effecient – not least because they actually turn up when something happens.
All in all, I barely need the state in my life. I certainly don’t want authoriatarian politicians telling me how I should live my life or spending my money on their idea of how life should be lived.
And very politely, I suggest you’re utterly deluded about the role of the state in your life
Wait until you’re old, I suggest
I note you don’t even say where you are!
In a democracy, anyone should be free to vote with their feet, i.e. leave that state without restriction. Any desire for restrictions on people free movement (including their property) is anti-democracy. If people have paid all their tax up to that point, they should be able to leave with all their property.
I’m not saying otherwise
I’m just saying you’ll still be paying tax for a while
That’s because they very largely come back when they need help
Odd that
Perhaps Tyler can tell us whether all the citizens of the state he calls home enjoy the same level of health care, education and security which he does.
I found the news of Depardieu gaining Russian citizenship to avoid tax made me chuckle (what good friends to keep). As you mention it’s intended to be a slight against the French government, but the only thing I get from it is an insult to the French people. I have a feeling it will continue to backfire against Depardieu and his supporters.
This whole event just reinforces how a very small portion of the population feels no responsbility for ensuring the country that allowed them to succeed continues to provide that same opportunity for future generations.
But, as you say in your post, Depardieu would only get the benefit of the Russian rate if he were to reside in Russia (or somewhere with a lower rate).
If leaving one country to live in another is not enough to shed tax residence in the first, what is? It seems odd to say that you have dues to pay to a country you’ve repudiated.
It also seems odd to say that you can’t really leave one country for another, when the whole point is that Putin has enabled Depardieu to do exactly that. You seem to be arguing that because in practice something is hard to do, in theory it ought not to happen at all. By that logic VAT partial exemption calculations shouldn’t exist…
I suggest (and know there’s a lot of sympathy with the suggestion that is already implicit in CGT law) that it should take several years to lose residence at best
Ultimately, of course, the passport is the test
Leaving should mean not coming back
Few will do that
Doesn’t that cause something of a problem, if you acquire a new residence easily but don’t lose the old one for several years?
I can get my car serviced at a new garage without the old one invoicing me, so why, if I live and pay tax in a new country, should I have to pay tax to the old one as well?
Tax is not like paying for a car service
You really do not understand it if you think that is the case
Why not? The government provides me a lot of services, for which I pay. Why am I paying the tax, else?
If you want to talk tax, then if I move from Yorkshire to Lancashire should I keep paying council tax in Yorkshire because I was born a Yorkshireman not a Lancastrian?
Then again, should I keep paying tax at the normal UK rate if I move to Scotland once the Scottish IT rate falls by 3%? I can carry on my business equally well in either place, but Scotland provides different services at a different price in tax (or will do). Am I not allowed to take that into account in deciding where to live?
I’m getting an impression of Morton’s Fork in your stance: if you do something which results in a lower tax liability, then if you don’t take the tax into account in your decision then of course you shouldn’t mind paying the higher amount; conversely, if you do so consciously you’re immoral and shouldn’t be entitled to the savings.
I get the sense of absurdity in your comments
So does that mean immigrants shouldn’t pay tax here in the UK for the first few years until they become British citizens?
We let them use the domicile rule
That’s the quid pro quo
So you are in favour of non-domicile status ?
No
I was writing pragmatically
But I have suggested a 4 year period of remittance based tax for immigrants as an alternative
I say this with my tongue firmly in my cheek. I’m sure Mr D has severed all links with France. He’s sold any property that he has there and decided to move lock, stock and barrell to Russia, so he won’t rely on a stable French government to provide for laws etc to protect his property and other interests there whether owned directly or indirectly. I imagine too, that he’ll be learning to speak Russian, so that he can make films there for a Russian audience.
After all Libertarian that he is, he’s effectively sticking two fingers up not just to the French government but to French society as a whole (including his fan base there).
Those people in that French fan base, weren’t they the same people that paid to see you act and helped catapult your career into the film Stratosphere.
I guess you feel that you owe them nothing.
Do they mean anything to you?. Presumably that’s a big fat “Non”!!
http://en.wikipedia.org/wiki/G%C3%A9rard_Depardieu
Not sure what others think but I do not hold that all subjects are chattel of the state. Individuals should have the freedom to move/live where they think most suitable according to their cultural wants, economic situation and shared world outlook. It should be as easy as changing your underpants.
Individuals should find a place where they can choose to live as they see fit. If they own an automobile, pay petrol taxes to maintain the infrastructure, similarly for mass transit. If they want to rely on the state for schemes such as NHS, pay in and take your chances – if not, do not pay in and take those chances too. Pension schemes, old-age this and that, all the same: You want it, you pay for it; You don’t want it, you don’t pay for it. Only common items, defence, law enforcement and the like should be provided, and paid for, across the board.
Simple really, if one believes in the freedom of the individual.
You ignore the fact that the state is the insurer of last resort – and free riders abuse it unless rules to ensure payment are enforced
Free riders can equally be described as libertarians of course
The term have some interchangeability
And your cimplistic philosophy is an excuse for that free-riding abuse
If an individual chooses to never use NHS (as an example), and thusly never pay into NHS, how are they free-riding?
Yes
Because the benefit from the rest of society being healthy
Technically it’s called herd immunity
But the other individuals in the society are also making their own individual choices (NHS vs. Private), the overall health would remain the same, would it not?
No, of course not
Most people have no chance of affording private health care
What bubble do you live in?
So they would pay into and use NHS, yes?
You ignore the need for progressive taxation to make the deal work
Tax is not a commercial one to one deal
It is about society
You are a member of society
But unless you have anything else meaningful to add this correspondence is closed
99% of taxation should be transactional.
The state does not force me to be my brother’s keeper.
It’s called democratic choice
And if it says you’re your brothers keeper, then you sure as heck are
That’s what democratic freedom means
… and now Brigitte Bardot is another circus performer http://edition.cnn.com/2013/01/04/world/europe/france-russia-bardot/
Mr Murphy, would you describe yourself as a communist?
I’m a social democrat
Some think a democratic socialist
But a man who is a chartered accountant who has run many private companies is unlikely to be a communist, and I’m definitely not
Now for your next silly question?
Silly?
Ok. Won’t bother again.
Fine by me
Just put in an internet search for “French film industry” along with “publicly funded” and found articles that show how cossetted and handsomely paid some French actors are despite a string of loss-making movies. No doubt ’twas ever thus. I would guess Depardieu has taken the money and run a long time ago. If I were French (and sometimes I really wish I were) I would be saying to him ‘foutez le camp’ and don’t come back.
Quite right
Richard,
I find it odd that you don’t mention in your post, nor do any commenters mention in their responses, the source of Mr. D’s capital flight plans:
* 75% tax on income over 1 million
Mr. D isn’t objecting to paying tax. He’s paid tax his whole life. He’s objecting to the arbitrary populist ‘eat the rich tax that the state has randomly allocated to his earnings.
“We’re all in this together” is fine. But why should some people be penalized more?
A democratic government with a mandate to deliver this tax did so
You’re saying that democracy should not prevail?
It could be argued that the 75% rate applies in order to address the rent seeking element of income at such a high level.
Indeed
I am intrigued by this idea of prople naturally forming part of a state.
I was born in one country. My parents were nationals of different countries. I therefore have 3 passports. I was brought up in a fourth country from age 2 and now live in a fifth country. My wife is a national of a sixth country.
Of which state am i a natural part?
You have a domicile
You tell me
I have a residency. I reside in the UK.
But i am not apparently domiciled in the UK, although i dont earn anywhere near enough to make it worth my while to claim non-dom status. But i believe it is only the UK that has this domicile concept (although someone tells me this is being abolished?)
But i have only resided here for 5 years or so. I dont regard myself as being maturally a part of the UK and ir i clear the UK doesnt regard me in that way either!
It seems that the freedom of movement in the EU makes the notion of natural membership of a state very difficult to sustain. In my sons school class almost all children seem to have parents of mixed nationality and many have two or more passports. Mostly EU but some from wider world also. These are global citizens. They wont need offer from Mr Putin.
It is a problem for your argument i think.
The problem is with your grasp of the facts
For example, domicile is a common concept
It extends way beyond tax
It’s rich that you speak of facts Richard – how about some historically relevant facts:
1. No country has EVER been able to enact or enforce or legislate limits on “capital flight” – name just one that’s lasted for over 10 years.
2. Rules on capital flight are totalitarian – China? Iran? North Korea? Venezuela?
3. Why 75% tax? Why not 100%? where does the ‘fairness’ of 75% come from vs. 15%?
4. If France can’t balance it’s budgets with an effective tax rate of 53%, why not just pare down it’s spending – do you realize how much influence France has in Africa? Gabon, Senegal, Guineau Bassou – what’s the cost of maintaining of this empire?
5. Why does the French state get a ‘pass’ in your mind, as a ‘liberal democrat’ to spend like a drunken sailor? Why does Depardieu not have a democratic right to protest the insanity of the ‘we know better than you’ bearucrats?
6. Depardiu has spent 100+ million on tax in France. How much have you paid to the French treasury? Why does he not have a right to vote with his feet and walk out?
Are you couragous enough to even contemplate any of the above? or will you constantly knee-jerk against tax reduction?
What utter rubbish
We had very effective capital controls pre 1980
And we need them now. They are an essential tool in preserving the right of the people of nation states to democratically maintain their right to self determination against the anti- democratic forces assembled very deliberately in tax havens
I note you hold that democratic right to determine in contempt
Iceland needed capital controls in order that its economy could recover from the actions of renegade banks.
Democracy prevailed there.
In fact Iceland jailed a couple of bankers recently. It’s to the UK’s shame that it didn’t do the same!
Quite so
Richard, you are to be commended for having the patience of saint.
There is an underlining theme running through opposition to France’s brave stance.
I’m afraid that by now my response to certain views aired here would have been far less restrained!
You’re a coward. You only publish the comments that make you look good and you run away from the comments that point out your lack of logic. If 75% tax rate is okay because it’s enacted by a democratically elected government, why aren’t tax loopholes okay if they’re enacted by democratically elected governments?
What’s really sad is that you’re an ignorant buffoon. You want a strong courageous state that will prop up another Tony Blair who will destroy another country full of Shepards? Not on my dime thanks coward.
With the greatest of respect, name calling is not much sign of reasoned argument
And with a similar amount of respect, to suggest tax loopholes, especially those between states, are enacted, is simply ridiculous
They are exploited by those without moral scruple, which is something quite different
When your comments lack any logic respectfully they do not deserve further publication