Taxation: residency or citizenship? [And a French perspective]

[Die Neue Zeit]

http://connexionfrance.com/Taxation-nationality-Sarkozy-Melenchon-Parole-de-Candidat-13531-view-article.html


FRENCH tax exiles should be forced to pay as much tax as if they had stayed in France, president-candidate Nicolas Sarkozy has said.

As a guest on the TF1 programme Parole de Candidat, he said: “I would like taxation and nationality to be linked”.

People who live abroad and wish to retain French nationality should have to declare what tax they are paying abroad and be made to make up the difference compared to what they would have paid in France, he said.

The idea has also been mooted by Front de Gauche presidential candidate Jean-Luc Mélenchon. When this was pointed out to Mr Sarkozy he retorted: “Do send him a little card on my behalf”.

Mr Mélenchon took credit in a statement, saying: “I’m on a winning streak”. “The outgoing president of the Republic has taken up the Front de Gauche’s solution on taxing fiscal deserters abroad. Yesterday he was taking up our idea of European disobedience [referring to Sarkozy’s threats to leave the Schengen Zone].”

Such a taxation plan however would need to agreement of all members of the European Union, as at present EU rules link taxation to residence.

[Night Ripper]

So if you pay more taxes abroad than you would at home does the French government pay you some of it back? I doubt it. It's not really about being "fair". It's about governments getting your money and using whatever post hoc justification they can to keep the population from rioting.

[Dean]

So if you pay more taxes abroad than you would at home does the French government pay you some of it back? I doubt it. It's not really about being "fair". It's about governments getting your money and using whatever post hoc justification they can to keep the population from rioting.

Governments responsible for the maintenance of roads, security and justice systems all require a certain portion of funds held by members who enjoy those resources be allocated to said resources. Citizenship, being the constituent element of this social system, is an obvious basis for the right to tax. You can always renounce your citizenship, of course. Businesses often consume these resources at a far greater pace, but are usually only taxed as such in states with stronger social institutions such as we see in Western Europe and North America.

In any case, there is no reason for these cumbersome systems to allow gaping loopholes for the transference of national assets - such as the money supply - to tax "safe havens," particularly when its possessors continue to enjoy the services of the government - including its central bank providing a stable currency.

It is my understanding that this is a rather unique case in Europe, whereas in the US such a system has existed for some time, albeit with many loopholes.

In fact, France should be going further. There is no good reason to allow the wholesale emigration of the money supply, capital and land rights. Where we have seen that, more often than not there has been a failed state or an administration lacking democratic legitimacy. Post-soviet Russia is a classic example, and Putin's hard line on controlling Gazprom, for instance, is one of the things that make him popular - though not in the West, where control over Gazprom is badly wanted. A similar case is in China, where state-imposed limitations on mining a finite resource - rare earth minerals - is being met with legal action by Western nations. That's a simple case of exploitation.

This need to maintain social control over public assets is more applicable to populations that have been exploited for centuries, including Africans (1.7Trillion have been embezzled and much has been sent to Western nations) and Afghans. So France, being an historical exploiter and possessor of many foreign assets, is hardly a victim here - but the French people are victims, something increasingly true in this age of austerity.

Honestly, though - "fair"? If you look at every individual case and see only some shallow moral doctrine to measure against it, you'll never learn anything about how these systems work. It should be a foregone conclusion that "fairness" didn't factor into it: nobody is approaching anyone else on equal ground, with honest intentions and shared resources. Without such conditions of mutual consent and shared power, decrying the lack of "fairness" is as absurd as complaining about the scarcity of real estate in a feudal society. It is purely meaningless, and inapplicable to the socio-economic relations we are talking about.

[l'Enfermé]

Weren't these guys whining about how millionaires are fleeing France because of "high" taxes? By that same logic, millionaires will not only flee, but renounce their French citizenships as well. How pathetic is the spectacle of Sarkozy trying to win for the April elections! The French will not be able to find someone more bastardly to be their president, no matter how much they try, for centuries to come!

[Die Neue Zeit]

I posted this here because every other country in the world taxes individuals' global incomes based on their residency, not on citizenship and residency.

[Night Ripper]

Governments responsible for the maintenance of roads, security and justice systems all require a certain portion of funds held by members who enjoy those resources be allocated to said resources.

Why rob me to buy something for me that I would pay for myself? If I wouldn't pay for it myself then how can you say I'm enjoying it?

[Ocean Seal]

Weren't these guys whining about how millionaires are fleeing France because of "high" taxes? By that same logic, millionaires will not only flee, but renounce their French citizenships as well.
Unfortunately, that's not necessarily the best idea. If they renounce their French citizenship they might lose the property that they owned in France, and the privileges that come with that citizenship.

How pathetic is the spectacle of Sarkozy trying to win for the April elections! The French will not be able to find someone more bastardly to be their president, no matter how much they try, for centuries to come!
APAB
All Presidents are Bastards.

[Dean]

Why rob me to buy something for me that I would pay for myself? If I wouldn't pay for it myself then how can you say I'm enjoying it?

Robbery? What on earth are you on about?

[Prinskaj]

Robbery? What on earth are you on about?
He is just being dramatic..
But I guess he is talking about the coercive force, that the state uses to obtain these taxes.

[Genghis]

If you are aboard, you are not making use of whatever services the French state is providing. So you need not pay.

[RGacky3]

Why rob me to buy something for me that I would pay for myself? If I wouldn't pay for it myself then how can you say I'm enjoying it?

Because YOU don't deal with market externalities that you create, society deals with them.

[ÑóẊîöʼn]

If you are aboard, you are not making use of whatever services the French state is providing. So you need not pay.

Not true. If you're still a French citizen then no matter where you live in the world, you may find cause to use the services of the French Consulate or some such, for example when the little tax-haven you live in gets overrun by disaster, invasion or rebellion. A crisis of sufficient magnitude involving French citizens living abroad may involve other branches of the French government, for example the French Navy may be called on to help with an evacuation.

[MarxSchmarx]

I posted this here because every other country in the world taxes individuals' global incomes based on their residency, not on citizenship and residency.

IIRC, France is proposing to follow the American model I believe Americans for example also need to file and pay income taxes wherever they live. If they live abroad, then they are liable for American taxes unless their source of income is outside the United States and the country where their source of income is has a reciprocity agreement with the United States. This is the overwhelming majority of countries, I believe even Iran has some kind of weird agreement, but nevertheless, the default approach in America is you owe taxes unless you completely cut ties and pay back taxes. There's some clause I believe in the American passport that says you are still liable for American taxes even if you give up US citizenship. I could be wrong on this, but this is why retired social security recipients in Mexico for example have to pay American taxes, and the Mexican government overlooks their tax burdens.

Certainly many countries act as you describe, but France I believe is trying to move away from this model, and I suspect they are not unique. All governments are desperate to get what income they can, I suppose.

[Die Neue Zeit]

^^^ Comrade, France is proposing to go a step further, since US citizens living in a foreign lower-tax regime aren't paying US levels of income taxation. Most residency countries have reciprocity agreements, but I'm sure most countries have the residency model ("deemed residency" typically has limited scope, like soldiers living overseas long-term).

[Genghis]

You should pay your taxes where you made your money. That's fair.

[MarxSchmarx]

You should pay your taxes where you made your money. That's fair.

Worker's shouldn't have to pay taxes. That's fair.