Fri Feb 1st, 2013 at 06:02:36 AM EST
The hoohah made around Bernard Arnault and Gérard Depardieu and the pigeons (the innovating wealth-creating job-creating thrusting young entrepreneurs who were going to get punitively soaked by the government's capital gains tax measures), and the tax exiles heading for Belgian border villages or for London, has occupied the French mainstream media for quite some time, and has fairly solidly established a narrative around French hatred of money-making (and how this explains "French decline").
The February number of Alternatives Economiques asks whether the wealthy in France are hard-done-by. Thierry Pech (article behind subs wall), takes a look at the 1% and concludes that they are doing comparatively as well as in the UK and better than in Germany:
Share of top 1% in total national income
As far as salaries go, Pech zooms in on the top 0.01% and cites research (pdf) showing changes in composition over the past three decades or so.
- In 1976, 38% of the top 0.01% of salaries were in industry; 14% in 2007
- 1976, 8% from the financial sector; 24% in 2007
- 1976, 10% from services to enterprises; 26% in 2007
Salaries in this income group have of course hugely risen (and CEO pay is back to rising again after a halt due to the crisis: example, from 2010 to 2011, Maurice Lévy, CEO of Publicis, more than doubled his salary; as for Bernard Arnault, he voted himself a modest rise of only 11%). But salaries are only part of the story. Income from assets (2% to 3% of the total income of the bottom 90%) counts for half the total income of the top 0.01%. Asset wealth is in fact a feature of the French economy. According to Credit Suisse, 2.3 million French held assets of at least $1 million in 2012 (8% of the world total, placing France third behind the US and Japan). This works out at one dollar millionaire for 28 inhabitants, the highest density in the world. This is undeniably the result of the rise in French property values -- it remains to be seen what downward correction there might be (continuing rise in the Paris region, at least, and only moderate flattening in other regions...).
Are the wealthy creative entrepreneurs?
Few creators of innovative SMEs are in the upper income bracket, says Pech (though they may reach it by selling their business). Of the business owners or managers in the top 0.01%, most didn't found their enterprise. Of the 15 French billionaires in the Forbes Top 500 2012, 9 inherited their enterprise from their parents. These 60% have an average age of 72. In the world, only Germany has a higher percentage (65%) of inherited-wealth billionaires.
French wealth, as Pech says, looks more inherited and rentier than innovative entrepreneur. Not so many self-made men...
As for the claim that high incomes and wealth are punitively taxed, Pech points out that the trend (in France and elsewhere) has been towards reduction, not increase, and recent measures by the Fillon government first of all, then the current government, have done little more than halt the trend. Over the long term, and compared to other countries:
Income tax marginal rate, US, UK, Germany, France
No particularly French hate-on for the rich there. But an amazingly successful big whine in the media!