Parisian Real Estate Lumps as the French flee
Ever since winning the presidential election last year, French Socialist President Francois Hollande has been working tirelessly to raise taxes on just about everything. Since taking office, Mr. Holland has proposed a 75% “supertax” on the rich, new taxes on cars, and higher taxes on capital gains (over 60%): a total of 84 new tax measures and counting. It’s therefore not surprising that many of those targeted by these new taxes have packed up their bags and left. As a result of these wealthy taxpayers leaving, hundreds of high-end properties have flooded the Paris real estate market, causing a mini property crash.
What’s more, a recent poll by the left-leaning newspaper Le Monde shows just how widespread the discontent is with Mr. Hollande’s government. More than 70% of the French feel taxes are too high and the president’s policies proving to be misguided and ineffective. After several decades of living in one of the most redistributive systems in the world, the French are calling it quits. At over 57%, France’s public government expenditures – as a share of GDP – are forecast to overtake Denmark’s as the highest in the world next year. Like a hamster spinning aimlessly in a wheel, the French government needs more and more taxes to pay for the ever-increasing government spending.
With nearly a quarter of the French workforce now employed by the government or some form of government entity, the workforce has become “two-speed”. Those in the public sector are largely protected against layoffs while the rest struggle with record-high unemployment in the private sector. With the unemployment rate continuing to sky rocket, the socialist government is now talking about creating more public jobs for the unemployed. With so many in France now working for the government and a president determined to uphold the status quo, it stands to reason that those who can will