When Gérard Depardieu announced he was giving up his citizenship to escape a 75-per-cent tax on France’s superrich, he was derided as a traitor – including by his own Prime Minister.
After all, the government had put the tax in place as a temporary measure to help tackle the country’s record debt, now representing nearly 91 per cent of the economy. And who better to make a “solidarity contribution,” as the tax is called, than the country’s wealthy?
For all its drama, Mr. Depardieu’s tax flight clearly misjudged the mood of his nation – and a growing shift in global sentiment. Where the Rolling Stones made a bestselling album from their Exile on Main Street to avoid taxes, paying dues is now seen as a civic responsibility for everyone; flouting them, decidedly unfashionable. Even the rich agree: Warren Buffett has famously argued for spikes in taxes on the wealthy.
It’s all part of a remarkable embrace of taxes, not only for the wealthy but for all of us. Portugal, Spain, Ireland, Italy, Greece, Britain, France, Japan and the United States have all introduced tax increases to cover growing national debts and costly stimulus programs. According to the Organization for Economic Co-operation and Development, the average tax burden increased in 26 out of 34 OECD countries last year.
Whether these tax measures can come close to solving fiscal problems remains to be seen. More interesting is the shift in our attitudes: The language around current tax debates taps into social values of fairness and equality as well as responsibility – the latest measure of patriotism is paying up.
In France, for example, the 75-per-cent tax is called a measure for “fiscal justice.” In the United States, actor George Takei of Star Trek fame recently blogged about his “duty” to support higher taxes. In the United Kingdom, that extends to corporations, which have been labelled “immoral” for evading taxes.
“There is a debate going on now which hasn’t existed before,” says Richard Murphy, who runs the British-based Tax Justice Network.
Could 2013 be the year we finally learn to love the taxman?
For now, the main point of debate in many countries is how much the very wealthiest should be taxed.
This is partly a backlash from the recession. There’s a sense that, despite tough economic times, some people still have it too good while others suffer seemingly unending government cutbacks. The Occupy movement tapped into some of that resentment, but the current push for taxes on the rich is more than a fringe movement.
This can be seen best in the United States and the recent debate over the so-called “fiscal cliff,” a series of automatic tax increases and spending cuts that some say could have triggered another recession if they had come into effect earlier this week.
Nowhere is the call to freedom, small government and entrepreneurship louder than in the United States. Politicians on all sides uphold the ideal that anyone can make it and keep it. And Republicans have recently taken a vanguard position with a “no new taxes” pledge and a fight to keep tax cuts in place. They argue that tax cuts leave money in the hands of consumers, leading to longer-term government revenue and economic growth.
But last week even the Republicans buckled in the face of mounting public opposition. For the first time in more than 20 years, the party voted to increase taxes on those making more than $450,000. Helping the cause was former California governor Arnold Schwarzenegger, who declared in a recent issue of Esquire magazine that he loves paying taxes: “I always tell my accountant, ‘If you’re in doubt about taxes, pay more.’ ”
All of which was a victory for President Barack Obama – except that making the superrich pay more may not, ultimately, pay off. According to one analysis, taxing America’s wealthy will raise barely enough money to fund the government for nine days let alone close a budget gap of some experts estimate to be roughly 7 per cent of the gross domestic product.Report Typo/Error