And there’s the famous case of the Rolling Stones in the early 1970s escaping the UK and its 98 percent tax rate for Southern France to record their aptly named “Exile on Main Street” album.

Now, the French have let slide their 75 percent tax. AFP reported:

Once a flagship policy of French President Francois Hollande, the 75-percent “supertax” on top earners limps into its final weeks this month having sparked plenty of controversy but few economic results.

It was no surprise that the policy, which expires on February 1, would be quietly dropped: it was only ever slated to last two years and the Socialist government has for months declared it would not be renewed.

The tax had also been watered down until it was barely a shadow of the “exceptional contribution to solidarity” proclaimed by Hollande when he came to power in 2012.

In California, Proposition 30 was passed by state voters about the same time in 2012 as the French high tax. Prop. 30 raised taxes on those making more than $250,000 a year, but is scheduled to expire at the end of 2018. It was pushed by Gov. Jerry Brown.

But during his re-election bid this year, he said he won’t push to renew Prop. 30. Given that he’s probably running for president, we can take him at his word.

But his “troops,” as he called the teachers’ unions during his 2012 camapign, are eager to keep it on the books and will be pushing for an extension on the 2016 ballot. So that could be a conflict.

By John Hrabe

In 2004, then-state Senate President Pro-Tem John Burton, D-San Francisco, coined a profane, albeit effective, slogan that helped convince Gov. Arnold Schwarzenegger to sign into law the nation’s first ban on foie gras. A favorite target of animal rights groups worldwide, the French delicacy is created by force-feeding ducks for their specially-fattened livers.

After an eight-year implementation process, the Burton bill finally took effect last July, and with it, spawned a budding resistance movement. From French socialist politicians to an online retailer in Reno and restaurants in Hermosa Beach and Paris, the Foie Gras Résistance is fighting back against California’s draconian law.

Despite the law, gourmet shops, online retailers and restaurants have found creative ways to satisfy epicureans’ desires.  On Dec. 8, one foie gras retailer hosted a “Foie Gras Tasting and Holiday Sales Event” in Reno, Nev.  “Mirepoix USA, formerly located in the San Francisco bay area in California, relocated to Reno, Nev. last October in anticipation of the foie gras ban,” the company explained in a press release for the event.

Complimentary

Restaurants, too, have circumvented the law by offering the item as a complimentary side dish. The infamous animal rights group PETA is hoping to put an end to this tactic. In late November, the People for the Ethical Treatment of Animals filed a lawsuit against Hot’s Kitchen for selling a burger that is served “with a complimentary side of foie gras.”

“No restaurant can act outside the law by illegally selling the diseased livers of abused birds, and PETA will help make sure that this one doesn’t,” said PETA general counsel Jeff Kerr. “Serving a ‘complimentary side of foie gras’ is as cruel as it is unlawful.”

Some critics of the law say its vagueness has made it impossible to bring forward a single enforcement action.

“It’s so vague as to be unenforceable in any manner that comports with constitutional requirements of due process,” wrote Reason magazine’s Baylen Linnekin, who serves as the executive director of the nonprofit Keep Food Legal. “After all, why hasn’t some governmental unit brought even one enforcement action in the state?”

PETA filed the lawsuit after unsuccessfully trying to persuade the Hermosa Beach Police Department to bust the criminal operation masquerading as a restaurant.

“We contacted the Hermosa Beach Police Department, but with a lot on their plates, they haven’t gotten around to the case,” PETA’s Michelle Kretzer wrote on the group’s blog.

If the thought of the police crashing dinner service at a swanky restaurant sounds absurd, you’ll love PETA’s first cause of action for the lawsuit: unfair business competition. Ironically, the California law that drove some businesses to leave the state is buttressed by regulations against unfair business competition. PETA alleges that the free side dish of foie gras unfairly gives an edge to some businesses.

A spokeswoman for the restaurant called the lawsuit an “outrageous” publicity stunt.

“Publicity stunts such as the filing of an outrageous, baseless lawsuit, followed by the issuance of press releases are nothing more than an attempt to exploit the media by stoking controversial flames and are designed to line the pockets of profiteers,” Kelley Coughlan, a representative for Hot’s Kitchen, told Reuters. 

French Socialists Fight the Ban

While California restaurateurs have been crafty in their evasive maneuvers, the most passionate members of the foie gras resistance movement have been socialist politicians in France. It’s not hyperbole to say that the California Democratic Party is more liberal than the Socialist Party of France.

This summer, Socialist president Francois Hollande offered  to “bring as much [foie gras] as needed to authorities of the country [the United States]” to help convince Sacramento that the ban was absurd.

“I think they will listen,” said Hollande, who has proposed a 75 percent tax rate on incomes exceeding 1 million euros. “We wish we could have more of it here in France, and sometimes cannot, due to lack of purchasing power — I wouldn’t want to deprive the Americans!”

No one wants the carbon footprint of a transatlantic flight weighing on a French socialist’s conscience, which is why I traveled to Paris to get the French reaction to California’s ban and taste the French delicacy for myself.

Enjoying Foie Gras in Paris

I sat down with the manager of one of Paris’ most popular foie gras proprietors. In her mellifluous French accent, Lucie Loï, director of the highly-rated Le Comptoir de la Gastronomie, summed up the reaction of the French food community.

“You cannot touch it. You cannot ban it. It would be crazy,” she told me as I washed down a plate of foie gras with a glass of champagne.  Foie gras is considered an important “part of the cultural and gastronomic heritage protected in France.”

I asked Loï about animal rights groups’ characterization that the delicacy is produced on factory farms.

“Foie gras is the product of extreme animal cruelty,” the Humane Society of the United States claims on its website. “Factory farms produce it by force feeding ducks so much that their livers become diseased and enlarged. This causes a tremendous amount of suffering and can make it difficult for the birds to walk and breathe normally.”

Loï vehemently objected. Her business only purchases foie gras from a farm cooperative in rural France.

The French resistance has even spawned a boycott of California wine.

“I call on all the restaurants in France that sell Californian wine to stop doing so in a show of solidarity for our foie gras makers and, more broadly, for all food makers,” urged Philippe Martin, the Socialist president of the general council of Gers, which produces 16,000 tons of foie gras each year.

For those looking to join la Résistance, Le Comptoir de la Gastronomie has international shipping and wide-variety of foie gras products to choose from.

Analysis

Nov. 28, 2012

By John Seiler

During the recent campaign, Gov. Jerry Brown insisted that people would not try to avoid his Proposition 30 tax increase by halting investments and “hiding” their money. Prop 30 boosts the top state income tax rate on millionaires to 13.3 percent from 10.3 percent.

Warren Buffett just wrote the same thing in a New York Times op-ed, insisting that the wealthy don’t react when their taxes go up. “So let’s forget about the rich and ultrarich going on strike and stuffing their ample funds under their mattresses if — gasp — capital gains rates and ordinary income rates are increased,” he wrote. “The ultrarich, including me, will forever pursue investment opportunities.”

The evidence, including Buffett’s own investment history, indicate otherwise.

The London Telegraph reported yesterday:

“In the 2009-10 tax year, more than 16,000 people declared an annual income of more than £1 million to HM Revenue and Customs.

By Chriss Street

Support for Proposition 30, the income and sales tax increase touted by Gov. Jerry Brown, has fallen below the critical 50 percent needed for passage for the first time in the California Field Poll. With just two days to go before the election and polls showing support for Prop. 30 fading, the teachers and other public employees unions are desperately spending fortunes trying to get voters to rescue their lifestyles.

Unfettered by the risk of the initiative failing, Brown and state politicians have increased deficit spending this year by more than the $6 billion Prop. 30 might bring in. “Taxifornia” is already suffering from wealth and business flight as the third worst tax burden in the U.S, but California politicians love to tax like the French.

The California Teachers Association is independently spending $1 million a day in advertising for passage of Prop. 30 in the Los Angeles media market, on top of the $8.8 million it gave to the official Yes on Prop. 30 campaign. No one is surprised that the largest official contributor group supporting the initiative would be unions, but it is perplexing that the second largest contributor class is multinational beverage companies.  Coca-Cola donated $1.9 million, PepsiCo furnished $1.5 million, Dr. Pepper-Snapple gave $0.7 million and assorted other beverage folks chipped in $0.6 million. Undoubtedly, the sugary soda folks are in for some serious crony payback.

The No on Prop. 30 push is being led by the Howard Jarvis Taxpayers Association. The largest contributor is Charles Thomas Munger Jr., who has given over $55 million.  Other large donators are Americans for Responsible Leadership, which gave $11 million, and the Small Business Action Committee PAC, which gave $9 million.

A disaster — or inconsequential?

The Field Poll found:

“Californians divide into two approximately equal size camps when asked whether they believe the state can continue to provide roughly the same level of services it now does if its budget had to be reduced by $6 billion. Statewide 48 percent think that it can, while 44 percent disagree.  Of those who foresee little impact on public services most are voting No on Prop. 30.”

In a brilliant political shakedown move, Brown and the California Legislature passed a budget that would give school districts a way to deal with “trigger” cuts that would result if Prop. 30 fails: legal clearance to cut the school year by up to 14 days.  The Field Poll determined that …

“58 percent of voters are very concerned about the potential impact that the automatic spending cuts that would be imposed should Prop. 30 be defeated.  Among this group, support for Prop. 30 is running greater than three to one (68 percent to 20 percent).”

The doomsday threat seems to have been effective motivating certain target groups:

* Women support Prop. 30 by a 17-point advantage of 50 percent versus to 33 percent;

* Independents supported the tax increase by 18 percent at 52 percent to 34 percent;

* Renters back the initiative by nearly two to one.

Men are split within the poll’s margin of error at 46 percent “Yes” and 43 percent  “No.”  Homeowners are also divided equally in their views of Prop. 30. Geographic support is predominantly the Bay Area and Northern California versus Central and suburban Southern California.

The lying-to-pollsters factor

Historically, about 5 percentage points of people interviewed in a telephone poll falsely indicate their support for government and taxes, which means the “real” poll numbers are 43 percent  “Yes” and 38 percent  “No.”  Voters who are undecided on tax initiatives by Election Day tend to be people who have not been persuaded by the dog-and-pony show in support of picking their pocket.  Consequently, it appears Prop. 30 is headed for a close defeat.

California politicians are desperate to avoid the reality that the state is deeply insolvent and becoming more so every day.  In the first two months of the budget year through September, California’s budget is already upside down by $1.2 billion and the state had to increase barrowing by $2 billion to an obscene $22 billion to just keep the lights on.  If you multiply the first quarter shortfall by four, it is obvious that the $6 billion Prop. 30 tax increase will only go to paying for the current deficit and do nothing to improve schools.

With credit rating agencies threatening a downgrade California’s debt to “junk bond” status and a slew of cities headed for bankruptcy court, passage of the Prop. 30 tax increases will accelerate the persistent state budget deficits caused by the flood of the wealthy and small businesses abandoning California for the lower tax rates of Texas and Nevada.  New York City Mayor Michael Bloomberg summed up what happens when the wealthy are walloped by government: “You saw in France people moving out when they raised the tax rates,” the mayor said. “Whether you like it or not, the wealthy are mobile.”

Chriss Street appears on “THE AMERICAN EXCEPTIONALISM RADIO TALK SHOW.”
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By John Seiler

France voted to put in office a socialist who promised to jack up taxes on “the rich” — and he’s doing it. He follows Nicholas Sarkozy, a Bush/Schwarzenegger type “conservative” who destroyed the country’s economy with spending and debt. France is under the Euro, so it couldn’t directly control the money supply. But it has suffered from the Euro being inflated like the Greenspan-Bernanke funny-money dollar.

According to the FT:

“Roger, a senior expatriate executive working for an international company in Paris, is thinking seriously of taking a walk down David Cameron’s ‘red carpet’.

“The UK prime minister last month riled France’s new Socialist government when he declared he would lay on a five-star welcome for anyone moving to London to avoid the tax re­gime promised by President François Hollande – including his election pledge of a 75 per cent marginal rate on incomes above €1m a year….

“It is not just expatriates who are concerned. Henri de Castries, head of Axa, the insurer, is one of France’s most respected business leaders. ‘I’ve listened to Mr Hollande. He wants to see more growth and lower unemployment. He wants to see business prospering. We want to see that, too,’ he says. ‘The question is how to achieve these goals? There is no example, in modern economic history, of a country that has succeeded in reducing its deficits by bringing taxes to a confiscatory level. On the contrary, it leads to a decline in activity, and an increase in the deficits’.”

Doesn’t that sound just like what’s happening in Taxifornia? We have a socialist governor, Jerry Brown, who wants to jack up taxes on “the rich” to fund extra spending — what he disingenuously calls “deficit reduction.”

If Brown gets his way, taxes will go up, the rich — and many in the middle class — will flee, taking businesses, investments and jobs with them. The state will be even in worse shape.

Watch what happens in France the next few months. It’ll happen here, too, if taxes are raised.