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Big problems ahead?


Aly
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Article in FT

http://www.ft.com/cms/s/0/5c0e33e0-c43e-11e1-850c-00144feabdc0.html#axzz1zXU3LjXX

Looks like more tax and social charges to rise. Read in German press that the constitutional court is reviewing the tax plans on the wealthy

as its being seen as a seizure of property unparallelled.

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Seems I can't read it without joining something else and giving out information.

Anyway, I'm more worried about increasing pressure in UK for an in/out of EU referendum, which I think at present would result in UK leaving. http://www.telegraph.co.uk/news/worldnews/europe/eu/9370252/Europe-Theres-only-one-question-Are-we-in-or-out.html

I just can't imagine the chaos such a move would bring, but fear that yet another disastrous decision will eventually result, so we're already making our plans.......

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You can read the FT article if you go to google news and type french taxes.The authorities are also looking at some of the double tax treaties, specifically Switzerland, Belguim but others may follow..I cannot see how Hollande will be able to make these savings and not upset his party and the unions. The annual pension budget  for example even with Sako`s now ammended raising of the retirement age was some 10 billion in the red. Higher now. that Hollande has lowered it to 60 again.  The Germans would not be able to bail out France, they have after all  subsidised its unproductive agriculture for years with the CAP payments. 56% of french GDP goes to state machinary -  despite this they want to recruit yet more functionaries. They have more tax collectors then the US. they will need them as we are all going to be paying more and varied taxes

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Norman, I have been following these events with bated breath, but seriously wonder whether there is a will throughout France to reduce the deficit. The socialists who were voted in on an urge not to change, control most of the regions and are spending like there was no tomorrow and seem quite disinclined to stop, and nationally, there seems to be an attitude that taxing the rich will solve all problems.

The Cour des Comptes has only just begun scratching the surface. If it reckons there are economies of 40 milliard to be made, then double it to cut out the rest of the waste. France, for example, has more tax collectors than the USA!

But I doubt that the unions and the party will take too much before they are out on the streets again.

I am also sure that expats will be hit somewhat as they tend to live at the frothy end of the market, so that rises in TVA, changes to CGT etc will be proportionately more hurtful.

Of course, simply modernizing certain things would help, such as introducing PAYE and self assessment, as well as attacking really big spenders, like the military - does France really need a nuclear deterrent or all those regiments, or all that land and bases held by the military.

One could go on.

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[quote user="woolybanana"]

................... Of course, simply modernizing certain things would help, such as introducing PAYE and self assessment, .................  [/quote]

I think PAYE is one of the most inefficient and labour-intensive method of collecting tax in existence. Its only advantage I see is that it provides a steady tickle of contributions, but other countries achieve this by estimating income from the previous year's return.

It results in our own case in our receiving a string of contradicting advices of tax codes every year, and I haven't lived in or paid tax in the UK for about 50 years.

Surely the annual french tax return is self assessment?

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[quote user="NormanH"]There was a detailed article on this is yesterday's Le Figaro, but I didn't post the link given the lack of interest in previous postings on similar topics.

http://www.lefigaro.fr/conjoncture/2012/07/02/20002-20120702ARTFIG00367-la-cour-des-comptes-appelle-a-agir-durement-sur-les-depenses.php

[/quote]

Hi,

      The worrying part of this article comes at the end where it says about the "temporary" TVA or CSG increase that a similar effort to prepare for the € in the 1990s was "successful".  The "temporary" tax ,at a rate of 2% at that time was the CSG which rather than being annulled when its "temporary " benefit had achieved its "success", now stands at 15.5% and is probably about to go even higher.

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You wonder how much more tax direct and indirect the French can take.  Be prepared as I suspect exit taxes will rise.I am just glad I am not a citizen.I doubt that they will achive growth of 1%..Perhaps a few more ring roads going nowhere and funded by the EU will help. The rest of Hollandes  package is punitive to enterprise.

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[quote user="woolybanana"]... seriously wonder whether there is a will throughout France to reduce the deficit. The socialists who were voted in on an urge not to change, control most of the regions and are spending like there was no tomorrow and seem quite disinclined to stop, and nationally, there seems to be an attitude that taxing the rich will solve all problems.[/quote]

As I see it, this has always been the case. It seems to be a permanent glitch in the French mindset, encouraged and

reinforced by French workers' unions and Socialists governments.

As an easy way out, it has always been right to blame "the rich / les patrons / whoever-is-richer-than-me" for all ills that befall "La France Profonde". And if they're to blame, let's make them pay!

It's the same mental block which sees youngsters at university afraid of changing paths; resentful employees stuck in a rut with the same employer for a working life of boredom, yet afraid of taking a chance at something different.

One could go on indeed... [:'(]

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I agree Claire. Thats why so many young french head for London to make careers. But I just cannot see it changing in France  There is a huge undercurrent

of jealousy and resentment for anyone who does well or who wants to be financially sucessful. Its a no,no. Years of spending has caught up. The debt will be 90% of GDP. All the taxes they collect will not even cover the interest payments. Unlike the UK or Germany they will not make cuts or even change employment legislation to make it easier for small businesses to take on staff. They will instead recruit more civil servants to sit in rooms and pass files around. What a shame

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[quote user="JohnFB"]Sounds like the UK in the late 60's early 70's. It eventually imploded and sorted itself. Same will happen here I expect eventually.

JFB

[/quote]

Will it ?  It depends on if the French  want to work  ...... or not   My observation of many is their urge to seek out work and financial reward is not as great as you find in the UK .

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The New PM has told the French to be ready to mobilise when faced with the huge debt burden. The sound bites are worse then Tony Blair.

What does he mean. Lots of daft talk abt growth but no actual proposals.. Bring back Sarko all is forgiven.

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les contours de la réforme fiscale, qui débutera dès mercredi avec la

présentation d'un projet de loi de finances rectificative: fin de l'allègement de l'ISF et des droits sur les grosses successions,

abrogation du bouclier fiscal et de la hausse programmée de la TVA,

création de deux nouvelles tranches d'imposition à 45% et 75% pour les

plus riches...

http://www.lefigaro.fr/politique/2012/07/03/01002-20120703ARTFIG00800-ce-qu-il-faut-retenir-du-discours-de-jean-marc-ayrault.php

Like them or not they are proposals.

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But I wonder what they will do if the constitutional court says the tax of 75% amounts to a seizure of assets as reported in some press today and rules it as illegal.

Even if it happens will it be enough - I doubt it.

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Well non resident home owners and renters will be hit by the 15% social charges. That will have a huge impact on property sales as well as anyone who has gites and does not live here

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I am keeping my eye on all this........ and realise that it could affect us greatly, and we may be back with the french franc and the UK out of the EU. All our income is from France, our son is in France.

 

Life will go on and we may end up being really poor....... and we will survive. No intention of worrying or losing any sleep.

 

 

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[quote user="Aly"]The New PM has told the French to be ready to mobilise when faced with the huge debt burden. The sound bites are worse then Tony Blair.

What does he mean. Lots of daft talk abt growth but no actual proposals.. Bring back Sarko all is forgiven.

[/quote]

Even all this?

http://www.telegraph.co.uk/news/worldnews/nicolas-sarkozy/9373478/Nicolas-Sarkozys-offices-and-home-raided-by-French-police.html

Sounds like Tory sleaze..

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[quote user="NormanH"][quote user="Aly"]The New PM has told the French to be ready to mobilise when faced with the huge debt burden. The sound bites are worse then Tony Blair.

What does he mean. Lots of daft talk abt growth but no actual proposals.. Bring back Sarko all is forgiven.

[/quote]

Even all this?

http://www.telegraph.co.uk/news/worldnews/nicolas-sarkozy/9373478/Nicolas-Sarkozys-offices-and-home-raided-by-French-police.html

Sounds like Tory sleaze..

[/quote]

Its early days yet. to reflect on sleeze. Lets not forget DSK? and we will certainly have dramas with all the power women in Hollandes life, Segolene, Tretweiler and Aubrey..I think it willl make a difference to many expats. The french are not going to continue to fund all our OAPs whilst we cash in on all their young folk. They are already looking at revising some double tax treaties. The non resident tax on property was abandonned and now its back on. They will tax the wealthy and the foreigners -easy targets and fits with an ideology.

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Aly,

How exactly do the French ''fund all our OAPs'' ?

UK immigrant OAPs have a pension paid by the UK government, S1 medical cover is funded by the annual payment by UK to the French Govt. I am not aware of any payments made to UK immigrant OAPs by the French.

Perhaps it should be noted that the UK pension payments plus any other income of the UK immigrant OAPs is actually spent in France and is a net gain for the French economy and, conversely, a net loss to the UK economy.
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