What Barack Obama can learn from Gerard DePardieu

Last year, a few months before we re-elected the man who is going to save us from prosperity, France elected Francois Hollande as her next president. 

 

President Hollande immediately passed a law that raised France's top marginal tax rate to 75% on all incomes over 1 million Euros ($1.3 million).

 

This week, French actor Gerard DePardieu renounced his French citizenship and became a citizen of the tax-friendly nation of......(wait for it).......

 

Russia.

 

In the birthplace of Communism, if you have a job and make a great deal of money, the government charges you a flat 15% tax on the fruits of your labor.

 

Shockingly, Mr. DePardieu feels that for the year 2013 he would rather see 15% of his income taken away by force rather than 75%.  Quel choc! Quel outrage!

 

Here comes the math part and this is where I need you to pay real close attention, Mr. Obama.

 

By leaving, France will receive 75% of zero Euros from Mr. DePardieu.  Russia will get 15% of a lot of money.

 

President Obama, which is the greater total for the coffers of the French treasury?  Which will help pay for roads and welfare in France?  Which one suggests that people do, indeed, respond to incentives and pay attention to their after-tax income in making decisions?  Which one proves that people and money are mobile?  Which one proves that it is not true that higher tax rates leads to more revenue?

Back home in America, 2013 has given us all an increase in the payroll tax (my taxes will now be about $2,400 higher this year) and an increase in the income tax rates for those Americans making more than $400,000 per year.  This, of course, coming during a really slow economic recovery - the ideal time to raise taxes.

Mr. Obama tells us that this tax increase on the top 2% of the American people will promote "fairness" and help reduce the deficit.  Of course when John F. Kennedy - a smart Democrat - did the opposite and cut taxes the 1960s had a booming economy and more tax revenue.  No matter.  This is the 2010's and we need not let something like common sense get in the way of fairness.

Here is what will happen next.

First, rich people will find a way to shelter their income from these higher rates.  They will send more of their economic activity offshore, purchase tax-free investments, create more trusts and on and on and on.

Second, we will notice that the national debt is not going down as a result of taxing the rich.

Third, President Obama will announce that the tax hike was not enough and will push for even higher rates on income, estates, capital gains, diamond-studded poodle collars and whatever else our "never ran a business" President can come up with.

Fourth, more Americans will email or text Mr. DePardieu for a good real estate agent.