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    When It’s Time To Give Up On Your Country

    France’s leaders are calling actor Gérard Depardieu “unpatriotic” and “pathetic.” You see, Depardieu is leaving France. He’s leaving because of the new French tax laws.

    French President François Hollande is trying to push through a 75 percent income tax, plus a higher “wealth” tax, higher capital gains taxes, higher inheritance taxes and a tax on selling your business, among other taxes.

    Depardieu has had enough.

    He said he paid 85 percent of his income in taxes last year. He says he’s paid 145 million euros in taxes to France over his career (roughly $190 million).

    So he’s moving to Belgium to avoid taxes.

    France’s Prime Minister called this move “pathetic, really.” Jean-Mark Ayrault continued: “Paying taxes is an act of patriotism and we’re asking the rich to make a special effort here for the country.”

    At what level is paying tax no longer an “act of patriotism”? This question doesn’t apply just to France. European countries are just a few years ahead of the United States in terms of becoming more socialist, with an insatiable demand for more of your income to pay for ever-growing government programs.

    Depardieu took offense at being called “pathetic.” Based on that, he offered to surrender his French passport. Belgium’s finance minister said he welcomes Depardieu and “any other French citizens.” And Russian President Vladimir Putin offered Depardieu citizenship.

    Other successful French citizens are leaving, too. For example, the founder of Moët Hennessy Louis Vuitton is also applying for citizenship in Belgium.

    Even worse, not only are talented people leaving France, but you can’t get talented people into France to work.

    “We can’t bring high-level managers to France,” Eric Chaney, an economist at French insurer AXA, told Bloomberg News. “They work in an international market and the market price for those salaries is well above 1 million euros.”

    So major French companies are looking to hire senior managers in London or Amsterdam instead of Paris, Chaney explained. France will miss out on all their taxes. By raising tax rates so high, instead of getting more in taxes, France will get no taxes from these guys.

    Again, at what level is paying tax no longer an “act of patriotism”? At what level does levying tax become an “act of confiscation” by the government? And when that point is reached, when is it time to give up on your country?

    I don’t know what the right level is. It appears that Depardieu has found the level for himself, and that’s 85 percent of his income.

    What do you think is the right level? How much of your income should the government be allowed to take? Is Depardieu a traitor? Or is he courageous?

    With ever-increasing budget deficits in the United States and no real political will (on either side of the aisle) to dramatically cut entitlements, it’s a safe bet that higher and higher tax rates are coming in the United States.

    It’s time to start thinking about how “patriotic” you want to be.

    Good investing,

    —Steve Sjuggerud

    This article was originally published at DailyWealth.com on Jan. 3 2013.

    Dr. Steve Sjuggerud is the founder and editor of one of the largest financial newsletters in the world, True Wealth. Since inception in 2001, True Wealth readers have made money every year with safe, contrarian investment ideas. Steve did his Ph.D. dissertation on international currencies, he's traveled to dozens of countries looking at investment ideas, and he's run mutual funds, hedge funds, and investment research departments. Steve's investment philosophy is simple: "You buy something of extraordinary value at a time when nobody else wants it. And you sell it at a time when people are willing to pay any price to get it." It's harder than it sounds, but Steve continues to be able to do just that for his readers. Click here to learn more.

    | All posts from Dr. Steve Sjuggerud

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