France’s government admitted that President Francois Hollande made an error in imposing a wealth tax on annual income over €1 million. The decision has not yielded an expected financial benefit. Besides, some millionaires affected by the punitive tax decided to change the citizenship. For example, French film star Gerard Depardieu applied for Russia’s citizenship. Nowadays, Paris abolished the so-called Robin Hood tax. Does it mean that fans of luxuries will move back to their homeland? Interestingly, for the period when the tax regulation was in force, inflows into the treasury amounted to just €260 million whereas it was expected to gain the total inflows of €70 billion. Emmanuel Macron, the economy minister, originally took this idea with a pinch of salt. He warned that the 75% wealth tax would “turn France into Cuba without sunshine.” So, Macron in tandem with Prime Minister Manuel Valls was a driving force behind the abolition. Importantly, Hollande being a longtime leader of the socialist party, has always distrusted high earners. During his pre-election campaign, Francois Hollande pledged to raise a tax burden on the wealthy part of the population. After winning the presidential election, he kept his pledge despite the fact that 75% of the French were against. As a result of the megatax, a lot of owners of sizable fortunes decided to flee from France. Thousands of affluent people moved mainly to Belgium, Switzerland, London, and New York. Bernard Arnault, the richest person of France, was considering relocating to Belgium. He owns Louis Vuitton, Givenchy, and other deluxe brands. Eventually, Arnault withdrew his application for Belgian citizenship. However, Gerard Depardieu quit his native France and was awarded a Russian passport. Are runaway French millionaires thinking of getting back? The question is still open.
