Friday, December 15, 2006

Overtaxed Johnny Hallyday Leaves France (Johnny Hally-Who?)

Another overtaxed high-income Frenchman votes with his feet by deciding to avoid the outrageous income taxes exercised in his country. He has just set up legal residence in his favorite play town, Gstaad, Switzerland.

Johnny Hallyday
[Thanks to breitbart.com for the photo of this aging rocker.]

An article at breitbart.com says that in 2003, the French finance ministry estimated that around 370 persons had decided to establish residency outside France for fiscal reasons.

But who is Johnny Hallyday, you ask. His name evokes among the French a similar emotion to that sparked by Elvis Presley in the US. He's Homegrown Rocker No. 1. I realize that no one has heard of him here; but that doesn't tarnish his local reputation one bit. He's been bellowing, heaving and gyrating with the best of them since back in the 1950s when his star began to climb, and it has yet to completely wane even though he is 63. Somehow, he has avoided becoming a living has-been (or a dead one, like so many), as his bank account seems to prove.

There is a well-founded principle in economics, which for some reason the government tax departments of the world are loathe to adopt. It is called the Laffer Curve.

laffer curve
[Thanks to investopedia.com for this neat illustration.]

The curve demonstrates the relationship between tax rates and tax revenue collected by governments as that rate rises in proportion to income. Time after time, the facts on the ground replicate this curve.

Why are the realistic and reasonable axioms of science so less popular than the mediatic and sensational ones? The answer is probably a political one. "Tax the rich" just sounds so equitable and gets so many votes.

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