Monday, September 17, 2012

A rich man’s world

A leak to the press a few days ago indicated that Bernard Arnault, the French ultrabillionaire (or “job creator,” depending on your ideological leanings), had applied for Belgian citizenship. This widely publicized move was his apparent counterpunch to President Francois Hollande’s plans to slap a 75 percent emergency tax on any French citizen earning over 1.1 million euro a year. Back in the 1980s, Arnault had temporarily fled to the US, the land of Reaganomics, when Francois Mitterand had launched a similar quasi-socialist experiment. This time, though, Arnault plans to remain in France as this will decrease his Belgian tax liability. And he claims – wink-wink – that he is not jumping jurisdictions in order to decrease his tax exposure.

The news about Arnault’s civic desertion were met with disdain by some on the French left. Liberacion splashed on its front page a picture of him carrying a suitcase, captioned with the conteptuous: “Get lost, rich twat!” Other commentators similarly decried what they perceived as “tax treason.” Arnault’s move, however, partly achieved the effect he perhaps sought. It triggered a debate about how much the French rich can be realistically taxed without prompting a mass escape.

Judy Bachrach, commenting on the World Affairs Journal web site, has a very different take on this. In her view, the French should finally realize that the whole idea of increasing taxes on the rich is a non-starter; and the lofty rhetoric clouding it is quite misplaced. She asserts Arnault was “right” to acquire a different nationality. She also mocks Hollande for the way he “snapped,” deeply “frightened,” that the megaentrepreneur “should have taken into account what it means to be French” before he jumped ship. Bachrach’s verdict? “But actually, that’s just what Arnault did. He took it into account, and he didn’t like the numbers.”
You have to admire the elegance of this doctrine which so reliably quantifies all values and arranges them in a neat hierarchy. But the whole incident also raises another curious issue. Adam Smith once believed that all sorts of entrepreneurs would shrink back from pursuing their self-interest in a narrow-mindedly egotistical way. Why? Mostly because they would seek to be respectable members of a broader community, and to avoid the moral opprobrium of their countrtymen and next-door neighbors. Now this appeal to some sort of “moral sentiments” sounds so 18th-century -  harking back to a period of so much wishful thinking; which branded itself the Age of Reason/Enlightenment.