French tycoon's threat shakes Socialist tax plan
PARIS – 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.
Thomas Adamson can be followed at http://Twitter.com/ThomasAdamsonAP