French tycoon's threat shakes Socialist tax plan

Sep 10, 2012
By THOMAS ADAMSON

PARIS (AP) - Bernard Arnault - the richest man in Europe - has ignited an uproar in France over taxes, citizenship, patriotism and what policies the government needs to promote growth.

It's a pretty impressive achievement for one little statement.

Arnault - the CEO of French fashion giant LVMH, owner of houses like Louis Vuitton and Christian Dior - is the symbol of France's treasured luxury fashion industry.

So when the face of "Made in France" confirmed Sunday that he had applied for dual citizenship in Belgium it struck deep chord in France's national pride.

Despite his protests, many thought it was an attempt to dodge the new Socialist government's planned 75 percent tax on the country's wealthiest.

One French paper's front-page headline called him a "rich jerk" on Monday and French President Francois Hollande questioned Arnault's patriotism.

But beyond the name-calling, the debacle highlighted a very French contradiction: A country that prides itself on producing exorbitantly-priced luxury fashion has tax policies that target the very people rich enough to buy French goods.

Arnault is the world's fourth-richest man, whose personal fortune Forbes magazine estimates at $41 billion.

His application to Belgium comes as Hollande prepares to implement a 75 percent tax on those that earn more than €1 million ($1.28 million) a year - although it was hinted the plan could be watered down.

"If I was in his shoes I might also think that I don't have a choice and would leave," said 34-year-old Jean-Baptiste Lete, a Paris resident walking in the city Monday.

It wouldn't be the first time that Arnault dodged a Socialist named Francois. He emigrated to the U.S. in 1981 when President Francois Mitterrand swept to power - and returned when the country's tax policies became more conservative.

As a Belgian, Arnault would pay a maximum of 50 percent on his income. More appealingly, he could take advantage of the cherished tax-free status that Belgians hold in Monaco - provided he renounced his French nationality. French nationals living in Monaco are taxed in France.

Arnault vociferously denied that his decision had anything to do with tax evasion and said he will continue paying French taxes, but his comments convinced few.

"I can't believe it," businessman Bernard Tapie was quoted as saying in the Le Parisien paper. "When you're the citizen of a country, you need to know how to enjoy the good part but also accept the downsides. Symbolically, this is a catastrophe."

The move was being called a public relations disaster that highlights the French economy's lack of competitiveness. The French are still reeling over British Prime Minister David Cameron's vow to "roll out the red carpet" for French firms if Hollande followed through on his plan to raise taxes for the wealthy.

Francois Fillon, France's former Conservative prime minister, directly blamed the Socialist government's tax policy.

"This will spread like wildfire. And all over the planet they'll say that France is the country that doesn't like success," he said.

Others placed the blame firmly on Arnault himself. The Liberation newspaper Monday featured a photo of a smug-looking and immaculately suited Arnault holding a suitcase alongside the headline: "Get lost, rich jerk."

On Monday, LVMH issued a statement saying that Arnault will sue the newspaper for "public insult."

Finance Minister Pierre Moscovici was worried about France's global image.

"He is at the helm of luxury houses whose brands are French symbols," the minister told BFM TV. "He didn't realize how it would be perceived, it was sort of irresponsible."

Some critics say the Socialists had it coming, reminding all that Hollande once famously said: "I dislike the rich."

On the other side of the border, the news was greeted with open arms.

"Welcome, Mr. Arnault" read Monday's editorial headline in the Belgian daily La Libre - which claims the billionaire has been living in a suburb of Brussels for several months already.


Singapore Set to Emerge as World’s Richest City

August 17, 2012, by Dan Jovic
Kevin Voigt, CNN, Reporting

HONG KONG (CNN) — Asia is set to have the world’s wealthiest residents, with city-state Singapore heading the rich list.

Hong Kong, Taiwan and South Korea will do well, too, according to by a new survey that predicts which countries will be home to the wealthiest citizens by 2050.

By one measure, they are already are. Singapore’s per capita income is estimated by Knight Frank and Citi Private Wealth‘s 2012 Wealth Report to be the highest in the world at $56,532 in 2010, measured by purchasing power parity. Norway follows at $51,226, then the U.S. ($45,511), Hong Kong ($45,301) and Switzerland ($42,470). (The International Monetary Fund listed Singapore 3rd in the world in 2010-11 by per capita GDP, behind Qatar and Luxembourg, which weren’t included in the Knight Frank report).

By 2050, the Wealth Report estimates the world’s wealthy citizens will be dominated by Asia: Singapore ($137,710), Hong Kong ($116,639), Taiwan ($114,093) and South Korea ($107,752). The only western economy projected to remain in the top five is the U.S., with an estimated per capita income of $100,802.

Danny Quah of the London School of Economics predicts that by 2050, the world’s economic center of gravity will be somewhere between India and China, the report notes. In 1980, the global economic center lay in the middle of the Atlantic.

Some of the world’s super-rich have already crossed the Pacific. Facebook co-founder Eduardo Saverin, a native of Brazil, moved to Singapore in 2009 has since renounced his U.S. citizenship. Jim Rogers, the co-founder of the Quantum Fund with George Soros, also moved to the former British colony in 2007.

“I have moved — I have sold my house in New York. I have moved to Asia and my girls speak Mandarin, speak perfect Mandarin … I’m preparing them for the 21st century by knowing Asia and by speaking perfect Mandarin,” Rogers told CNN recently.

“It’s easier to get rich in Asia than it is in America now. The wind is in your face. (The U.S.) is the largest debtor nation in the history of the world,” Rogers added.

“The largest creditor nations in the world are China, Japan, Korea, Taiwan, Hong Kong, Singapore. The assets are in Asia. You know who the debtors are and where they are. Look at Greece. Look at Spain. I mean, I don’t like saying this. You know, I’m an American, too. But facts are facts.”

The report’s list of fastest growing economies between 2010 and 2050 also gives more credence that the world’s wealth is moving toward Asia. Of the top 10 fastest rising economies — Nigeria, India, Iraq, Bangladesh, Vietnam, the Philippines, Mongolia, Indonesia, Sri Lanka and Egypt, respectively — all but three are in the region.

Old World economies will have the worst growth performance in the next 40 years, the report predicts: Spain, France, Sweden, Belgium, Switzerland, Austria, the Netherlands, Italy and Germany are at the bottom of the list. But Japan and its aging population will have the weakest projected growth of all economies, Knight Frank estimates.

However, just because the denizens of Singapore, Hong Kong and Taiwan are projected to live in the world’s wealthiest regions doesn’t mean all will share in the wealth.

In the report Tina Fordham, Senior Global Political Analyst at Citi, warns that the dissatisfaction with income inequality shown in the Occupy Wall Street demonstrations “will gain momentum, and that there could be a long-term recalibration between governments, businesses and society as a result.”

On Monday, a court ordered the protesters of Occupy Central in Hong Kong, one of the last outposts of the global protests sparked by Occupy Wall Street, to give up its encampment at HSBC’s headquarters in the city.

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