10 September 2012

Louis Vuitton, a Belgian Brand?

I am being facetious, of course.

But when it became known that Bernard Arnault, the owner of LVMH and the richest man in France with a fortune of 41 billion euros, applied for Belgian citizenship the French media went crazy.

The headline used by Liberation "Casse-toi riche con" is a reference to a derogatory phrase Sarkozy uttered (the meaning in English is here) while responding to a protester.

The French media predicted that it was because of the silly 75 percent tax rate promised by Fran├žois Hollande for people who earn more than a million euros a year.

I doubt that it was the case, as he would not be able to divest himself of his holdings in France. Moreover, the 75 percent tax rate is likely to be applied to salaried income (no one knows what the tax entails yet). In France, for 90 percent of the population, salaried income represents 80 percent of their revenue. Whereas for the super rich, such income is less than 20 percent of their annual revenue.
Credit Reuters

In other words, Arnault's 41 billion euros fortune is not under a socialist threat.  

I suspect it was partly a stunt to bring this silly tax to the agenda. Partly, as his press people noted, he has investment plans in Belgium, where he has had residency permit for more than ten years.

Incidentally, the reason I call it a silly tax is the fact that in the best case scenario this tax will only bring €250 million to the French treasury. But symbolically, it is used to paint Hollande like a traditional tax-and-spend socialist.

For my way of thinking, €250 million is not worth the opportunity it gives to people like Arnault to pull stunts like these.

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