Let's Treat Tax Refugees Like Real Refugees
Conservatives and free marketeers across the globe are crowing at the end of France's brief flirtation with a 75% tax on very high earners. Rich people simply fled the country. Let's treat these people like the refugees that they are.
In a world of ever-growing economic inequality, we need high taxes on very high earners if we ever want to have a hope of bringing the insane levels of inequality back down to earth. No matter; the rich people have spoken. The tax's expiration was accompanied by a good deal of "I told you so"-ism. Critics pointed out that the tax brought in relatively little revenue, gave France an "anti-business" reputation, and sent rich people like Gerard Depardieu scurrying for foreign soil in order to avoid paying the tax.
While it is often treated as some sort of fait acompli that high taxes will drive away high earners, this is not some sort of law of physics. It amounts to the choices of a small group of extremely wealthy people to protect their own interests at the expense of the broader national interest. It is not an ineffable chemical reaction. It is a choice, and a nakedly self-serving one. "Around 200,000 French live in Francophone southern Belgium...of whom an estimated 5,000 are tax exiles. Switzerland is home to another 2,000 French tax exiles," notes the Wall Street Journal. Some foreign nations even went out of their way to goad rich French citizens into leaving: "In June 2012, the Prime Minister, David Cameron, said that he would 'roll out the red carpet' for wealthy French businessmen."
Economic inequality is a global issue. It demands global solutions. Thomas Piketty's proposal of a global wealth tax was a stab at this. That proposal is probably unworkable for the foreseeable future, but it is not unworkable for the nations of the world to acknowledge that this is a global problem and try to avoid actively working to undermine one another's efforts to address economic inequality. This is a "crabs in the pot" situation. We all live on this earth together. We will ultimately all suffer the consequences of allowing a tiny, stateless elite to accumulate a disproportionate share of global wealth. Nations competing with one another for wealthy tax refugees is just as stupid and unproductive as U.S. states competing with one another to offer corporate welfare packages to big companies. At the end of the day, the public loses.
The craven actions of world governments may be an ambitious problem to tackle. So let's turn our attention to something more manageable: the behavior of rich tax refugees themselves. Here we have a class of people who not only find themselves fortunate enough to possess vast riches, but who repay society for their good fortune by openly fleeing the country in order to avoid contributing to the public treasury. These are people who should be condemned by every patriotic pundit, but who are instead treated as VIPs who must be wooed and petted gently.
So here's an idea: let's treat tax refugees like the refugees that they are. By that I mean, let's send them to crowded tent camps administered by the UN, have them get their daily water supply from the back of a dusty tanker truck, and make their food ration dependent upon the ability of the charity of foreigners. Let's keep them in this stateless limbo indefinitely, until such time that their home country can be persuaded to take them back—presumably upon the payment of a hefty tax bill, with penalties. In the meantime, we will allow A-list celebrities to speak out on their behalf. But most of us will just forget about them entirely.
It's not fair to privilege one group of refugees over another.
[Photo of the new home of France's wealthiest expats: AP]