Observations in France: Be Careful What You Wish For
Gasoline in France costs 1.5 Euros per liter or about $7.35 per gallon except it is not gasoline, it is diesel. Fortunately, Citroen makes an excellent fuel injected car called a C5 that provides very pleasant transportation for the 1000 kilometer drive to the Spanish border and back. Thanks to efficiencies designed into the engine, the cost per mile is merely notable but not fatal. That is what business people do when taxes are raised to uncomfortable levels. They figure out how to get around them. A clever engine is a tax avoidance scheme.
The French roads are superb but largely empty. Many include significant tolls. The highway from Bordeaux to Bayonne is heavily under construction so it too promises an enviable driving experience upon completion. Whatever part of the French government that takes responsibility for roads should be proud of its work.
There is a part of America that looks with envy at such accomplishments, but all is not necessarily as it seems. The sales tax runs about 19% but it is carefully hidden inside the posted price of everything to avoid drawing unwanted attention. I had no experience with income taxes except anecdotally.
The weekend trip related to an obscure game that is the forerunner of tennis and to several Basque equivalents. UNESCO views them as culturally important but for our purposes think of them as magnets for the enthusiasts we met over the course of three days.
The first is the owner of a small restaurant in a tiny village called La Bastide-Clairence. She is what we would call a soccer mom and she is tireless in her efforts to recruit children into the sport to expose them to the rest of the world. She is the exception that proves an unfortunate French rule: very few people volunteer their time.
The second enthusiast shares a last name with both a chateau and the village in which it is located, a reliable indicator of a member of the top 1%. The chateau is open to visitors six days per week, six hours per day, three months per year. This was the price extracted for the avoidance of a confiscatory inheritance tax. He is able to keep the doors open by offering the family home as a wedding venue. He and a brilliant aide-de-camp are coping with the reality that French real estate is not portable.
Our third is a prosperous banker with a lovely wife and three lovely children. Though their region is doing better than most other parts of France, they are planning to spend several years in America to broaden their children’s education and perhaps increase their opportunities abroad. Unlike chateaux, children can take themselves and their ambitions elsewhere.
In Bordeaux, the facility housing the obscure game is more or less a shambles of deferred maintenance and general neglect. Our chateaux owner and his aide-de-camp might have been helpful. The building is set to be sold to a developer but there are no prospects of relocating the game elsewhere. In America, the enthusiasts would reach into their pockets to donate the funds necessary to keep the court alive but there is no such tradition in France. Over the years, everyone has come to depend on the government rather than their own initiative.
Our fourth enthusiast is a nutritionist and she keeps few opinions to herself. Now that she bears responsibility for the well-being of her countrymen through nationwide insurance, she has the strongest possible views on unhealthy behaviors. Smokers should be barred from hospitals. Over-eaters (an easy thing to be in France) and those who shun exercise should be charged for the extra cost imposed on the national health scheme. Hers would not be the land of the free, but perhaps this is an unforeseen consequence of having the government take charge of as much as it does in France.
The fifth and final enthusiast is a young man who appears to be in his late 20’s. He is employed and has been since finishing university, but he is tired of working for others and wants to start his own thing. He will not do so in France. “C’est impossible” he says — unfortunately, without emotion.
There was no discussion of the recent downgrading of French debt based on “doubts about future competitiveness and aversion to structural reforms” nor any about the collapse of E.U. budget negotiation over the issue of trimming the cost of the bureaucracy, though both have serious consequences for the way life is actually lived.
Peter Pell, November 26, 2012 at 5:11 am said:
Very interesting anecdotes. Thank you.
Guy Cipriano, November 26, 2012 at 5:25 am said:
Very interesting. It appears that the banker and the budding entrepreneur should merely vote with their feet and leave France. They are well positioned to make the jump and start fresh in a more welcoming environment. That is exactly what educated white South Africans are doing- emigrating to NZ, AUS, UK , USA and even places such as Ireland, the Caribbean and Estonia. In the immortal words of my late grandfather, when referring to the wave of immigration from southern Italy and Sicily to America in the late 1800’s/early 1900’s, ” The people with get-up-and-go, got up and left.” There was an article in Friday’s WSJ about wealthy French families selling expensive apartments and vacation homes because they are moving to Switzerland, Belgium, and other lower-taxed places. Maybe Mr. Hollande should wake up and smell the coffee. If you tax something, you get less of it. They tax entrepreneurs and the dynamic businesspeople, so they get less of both and end up collecting less revenue . Laughably stupid.
Peter J. Pell Sr, November 26, 2012 at 7:30 am said:
Glad to hear that fatties are being “called out” and
made to pay what they cost us. I can only hope that folks who live too near
the water are similarly charged for scorning higher ground.
Simon Berry, November 26, 2012 at 1:24 pm said:
I like the sound of your fourth enthusiast, quite right too. I think that airlines should follow that line and charge by weight. Then just like european diesel engines developed to be more efficient in order to combat higher fuel prices and taxes, these fatties would be encouraged to leave their excess baggage at home.
Rob, November 26, 2012 at 2:10 pm said:
Interesting about the “superb” French roads. One of the conservative things the French do – make current users pay for infrastructure through high tolls and gas taxes – rather than ignoring the problem and passing on crumbling roads and bridges to our kids.
Haven Pell, November 26, 2012 at 11:55 pm said:
I agree, Rob. These are essentially user fees that permit the individual to pay them or not depending on his own economic choices. I would massively increase them and their use. Then, of course, I would do my best to insulate the funds from theft by legislators. Hunting and fishing licenses are easy — make the annual fee cover the cost to the state. Wireless internet access throughout the country (well the logical parts anyway) on an annual access fee basis.
As for airplane tickets, I would charge the cost off FAA, CAB, TSA etc to the airlines, which would then pass them along to passengers however they saw fit. This would end the silliness of charging for bags because bag charges are not subject to the ticket tax.
Grazing rights in the west? — definitely charge market rates. Oil leases, the same.