The Financial Times is reporting today that Bernard Charles and other executives of France-based Dassault Systemes are thinking of emigrating from France -- or have already done so.
The new socialist government ruling France made good on its election promise to tax top income earners at 75%, as well as to sharply boost taxes to as high as 80% in other areas, such as capital, stock options, and awarded shares. The French government has made some cuts in its spending, but not enough to reduce the debt that keeps increasing due to its over-generous social programs.
In an interview with the French-language Le Monde newspaper, Mr Charles says the Dassault board of directors have talked about him leaving for a tax-competitive country. He claims he is less concerned about the 75% income tax rate (for incomes over Euro 1 million) than he is over taxes on capital and shares. To be a shareholder is the dream over every manager in the digital industry, he says, even in China.
Once the government takes away more than 60% of your shares, he says, "you are out of the race in the world." As a result, some managers have relocated overseas. Although he would not tell interviewers Dominique Gallois and Cedric Pietralunga how many Dassault managers have left France, we see some of them at the head of SolidWorks and Spatial.
"More broadly, our recruitment of top management will necessarily be outside France." Because, if not, then Dasssault will lose managers to other firms unhandicapped by France's uber-taxes.
Those upset by rich people leaving France ask, "Don't you have a responsibility to stay here?" To which Mr Charles replies that his is a global company with no "physical barriers." By this, I think he means that software is digital and so can easily be programmed anywhere -- even across the border in Germany, which is more entrepreneur-friendly (heh, entrepreneur is a French loanword).
Mr Charles notes that in December he sold 28 million shares just to pay his tax bill. I recommend that Dassault Systems move to the business-friendly low-tax haven of Canada; we even have a suitable French-speaking province!
- Financial Times: http://www.ft.com/cms/s/0/13a9bcb0-8a53-11e2-bf79-00144feabdc0.html
- Le Monde: http://www.lemonde.fr/economie/article/2013/03/11/dassault-systemes-la-fiscalite-met-en-danger-la-filiere-numerique_1846073_3234.html#xtor=AL-32280270
Le Monde in English: Google Translate