First off, I must explain a personal conflict of interest.
For some years now I have been one International Living's attorneys, in charge of their due diligence investigations. I've also written articles and reports for IL, and I speak at their conferences, (as I will in Quito, Ecuador, Feb. 24-27 -- if IL doesn't disown me after this article).
Having confessed my IL ties, here's what gives rise to this comment -- International Living announced yesterday that, for the fifth year running, the French Republic takes first place in IL's annual "Quality of Life Index" out of 194 countries. Mon dieu!
Says the anonymous voice of IL, justifying what, in my opinion is a shocking choice, France's "...tiresome bureaucracy and high taxes are outweighed by an unsurpassable quality of life, including the world's best health care." (French expenses for health are now total 11% of GDP. In the US it’s 15% of GDP).
What About Freedom?
IL lists France as being 100% "free" in the sense of liberty -- a highly dubious conclusion at best.
Indeed, IL only counts liberty and freedom as a mere 10% of its overall 100% country score, giving freedom equal weight with lesser attributes such as "Leisure & Culture" and "Climate." IL also ducks responsibility and depends instead on Freedom House for an estimate of France's concern about personal freedoms.
Freedom House is a Washington, D.C.. based international non-governmental organization that says that it conducts "research and advocacy on democracy, political freedom and human rights" -- financed in part by your freedom loving U.S. government.
I think it is not to much to ask that individual freedom, something that the French have never championed, should outweigh the latest nouveau beaujolais or real estate prices in Provence in IL's international scorecard.
Bonjour. Ca va bien aujourd'hui?
Now let me balance my position by noting that French is my second language. I studied it for five years in elementary, high school and at the Foreign Service School of Georgetown University. I had to pass an excruciating oral exam of more than an hour with four professors of French in order to now be able to converse with Haitian cab drives -- most of whom speak creole.
I've traveled all over France -- by TGV fast train from Calais to Paris, from Paris to the Rhur, by car from Paris to Dijon and Chamonix. I've spent many days in Paris, visited Napoleon's Tomb, the Louvre, the Musée du Jeu de Paume, Sacre Coeur, Notre Dame, Versailles, dined in the Marais, stayed with friends at their penthouse on the Canal de Saint Martin Jemmapes in the 10eme arrondissement -- and generally gotten to know and like the French people -- even if some of them don't like les Americans.
Why Not France?
Firstly, most of the French don't like the free market economy. According to a poll for the University of Maryland (GlobalScan, Aug. 2005, in: Le Figaro March 25, 2006), in answer to the question: "The system of free enterprise and market economy -- is it the best for the future?" Thirty-six percent of the French respondents said "oui" and 50% said "non."
The gloomy French lack self-confidence and confidence in their future. When 22,000 young people, ages15-29, were asked by a poll by Le Figaro (Jan.4, 2008), only 25.6% agreed that "my future is promising" and only 4.2% believed "the future of our society is promising." Do these young Frenchmen know something IL doesn't?
Then there are the taxes that finance big and bloated French government. The public sector employs more than 6 million people, 23% of the total work-force. The national debt is enormous; 65% of the GDP, or 18,000 euros ($US26,000) per inhabitant; (in the US it's $30,400 per person under Obama).
For what follows I am endebted to an interesting web site on France by a Frenchman
1) France has one of the highest level of taxes in Europe (with Sweden : see numbers) particularly on high salaries, approximately 50% higher than in the States.
Key reason is that the State and other public authorities provide for socialized free services that are charged for or covered by private insurance in other countries (education, health, unemployment). It also provides other services which are totally private or charitable (like cultural or social policies) in other countries. This is why the French give very little to charity, compared to the US. Contrary to what most Americans think, except for the richest, you can get through taxes in France what you cannot afford in the USA : see an example.
2) The main tax is the TVA "taxe à la valeur ajoutée" (value added tax) which is 19,6% on most expenses (with a reduced rate for food, books and essential goods at 5,5%) ; all prices in France are indicated tax included. It weighs on every product sold in France but, contrary to a sales tax, at each step of the economic circuit the economic agent collects it on its sales but gets reimbursed of it on what it purchased. It is therefore neutral, however, long or short, the circuit. %). It is the most productive tax (45% of total taxes) and it is less painful than any other tax. It was invented by a Frenchman, Maurice Lauré, in 1954.
3) The income tax is paid only by people above a certain income and, given large tax deduction for children, only 52% of the population pays income tax; currently, the maximum marginal rate for it is 48.09%.
4) Local taxes: land and property owners pay a "taxe foncière" (property tax) and tenants pay a "taxe d'habitation". In Paris, where local taxes are not particularly high, see example for the numbers.
5) There is also an "impôt sur la fortune" ISF (literally tax on fortune) if your assets are over 770,000 euros (US$1.1 million) at 0.55 to 4% tax rate, which comes very fast if you own your apartment in Paris. Thousands of millionaires have emigrated to escape it.
6) Taxes levied on companies are much higher in France than in any other country: they include not only corporate taxes but a large number of dedicated social transfers actually paid by companies to finance State policies in the fields of unemployment, public transport, physically disabled, public housing, etc. This is why "travail au noir" (undeclared work) is relatively important (above 5%): see the anatomy of a paycheck and comparative European figures on "travail au noir".
7) For details on French taxes, visit the (excellent) site of the Ministry of Finance.
One Frenchman recently addressed the question what is wrong with France?
His answers: a political class that is absolutely autistic; a preference for authority, the state, rather than discussion or consensus; radical unions; dependence on government for solutions; no free market economic culture; a preference for ideas rather than facts; a general self-centeredness.
Veuillez m'excuser s’il vous plait but I'll improve my Quailty of Life elsewhere, thank you.
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