THE number of wealthy people in France increased rapidly in the f irst decade of 2000, according to figures from national statistics body Insee.
The number of households earning more than €500,000 went up 70% between 2004 and 2007 from 6,500 to 11,000, while those earning €100,000 or more increased by 28% in the same period. The richest 1% earn at least €84,500 a year, half of these earn more than €112,000.
The Insee statistics are altered to reflect family size so total household incomes are divided up by the number of people in the family – so income figures for larger families are lower. This makes it easier to compare income.
In reality large families described by Insee as having €84,500 would have combined incomes of more than twice as much in reality.
The figures show the top 1% make around half of their income from investments – property, shares etc, and their income boosts can partly be explained by stock exchange rises. Insee’s latest figures only go up to 2007 so the affect of the economic crisis will be seen when the 2008 figures become available.
As revenue from capital is taxed less than that from work, and thanks to France’s many niches fiscales (tax-free or low-tax investment schemes) this wealthiest segment pay only around 20% of their income in tax on average.
Insee’s figures also show that the rich are getting richer faster than the less well-off. Between 2004 and 2007 the top 1% became 20% richer in terms of incomes, while the average income went up 9%.
Despite the large incomes of the extremely rich, disparities in French incomes are not that wide. The top 10% earn on average three times that of the bottom 10% (e33,900 compared to €10,010 average). The average income overall in 2007 was €21,080 a year.
At the bottom of the financial scale, Insee’s latest (2007) figures show 8 million, 13.4% of the population, were considered to live in poverty – with incomes of less than e10,896 a year.
A third of immigrants, defined as someone born outside France or of non-French nationality, live at this level or below, while 30% of single parent families are also in this group.
The statistics for immigrants show 42% of people from Africa live under the poverty line compared to 24% of people from France or other European countries.
Also just released are the figures for bouclier fiscal refunds last year. Among the 16,350 well-off French residents benefiting from the tax cap in 2009, the average payback was €117,142. Almost half (47%) of these were ISF-payers.
The average paid to those who do not pay wealth tax was €565 – generally to people with small incomes but valuable properties.
Those benefiting included 14 people who had incomes of around €3,500 or less but property worth more than €16 million, which some pundits said must be due to inventive ways of investing to keep money out of declarable revenue.
Are rich driven away?
MORE wealth tax payers are leaving France, latest figures show.
The tax is regularly accused by critics of being a major reason why wealthy French people go to live abroad – notably to neighbouring countries with lighter tax regimes, like Switzerland and Belgium.
Its opponents, like Senator Philippe Marini add that it stops others from coming here. The number of wealth tax payers leaving were 821 in 2008, the latest year for which statistics are available. This compares to 719 in 2007 – despite the fact that the cap on total tax bills, the bouclier fiscal, was lowered from 60% to 50% of income in 2008.
The figure is however slightly lower than before the creation of the bouclier in 2006 (846). Wealthy people known to have left France for tax reasons include singers Johnny Hallyday and Charles Aznavour and racing driver Alain Prost, all of whom now live in Switzerland.
Last year Hallyday was reported to be complaining that even Swiss taxes had risen and he might be considering residency at Saint-Barthélemy – a Caribbean island with an even lighter tax regime. Wealth tax was introduced in 1982 by the socialist President François Mitterrand as part of electoral pledges called “110 Propositions for France.”
It was abolished in 1986 by Prime Minister Jacques Chirac’s right-wing government after a period of “cohabitation” began. As the right-wing had a majority in parliament this gave the prime minister more power than the president in domestic affairs.
It was reintroduced in 1988 on Mitterrand’s re-election for his second term when socialist Michel Rocard became prime minister.
