Tax time again and this year’s declarations will be for many between gritted teeth following the high profile “confession” of Jérome Cahuzac, the recently deposed Budget Minister who was also in charge of a crackdown on tax evasion. Well, guess what? Cahuzac lied to everybody … the President, Parliament, and the French people, about his secret Swiss bank account.
Allegations about this account were dug up by Mediapart, a left-wing investigative website, stating that Cahuzac had held this account for 20 years or so, before transferring its balance to a new account in Singapore in 2010. Cahuzac had vehemently denied having such an account, – les yeux dans les yeux – “I do not have, and have never had, a foreign bank account,” he insisted. For months Cahuzac stuck to his story, even after March when he was forced to resign from the government after investigating judges had begun an enquiry. The President and his former government colleagues backed him until April 2nd, when he realized the game was up and he confessed that he had been lying all along. He claimed the offshore account held €600,000, but later rumours speculated on a figure closer to €15,000,000.
Wherever the money came from, did Hollande know about the cover up? Even if he didn’t know, he should have done. Although Hollande has tried to dissociate himself from the scandal, his Presidency is at a new low in the ratings.
The economy has seized up and will doubtless move into recession, unemployment is at a new 14 year high and will get worse through 2013 and 2014, morale has collapsed as taxes keep rising and – in spite of this – France has no hope of meeting its budget deficit target and has admitted it will not get the deficit below the crucial 3% of GDP goal in 2013.
Hollande’s attempt to clean up the tarnished image of the political world was to insist that his ministers made public their assets, which was both embarrassing and futile. How much remains hidden offshore in occult bank accounts like Cahuzac? No one knows, but the suspicion is that ALL politicians are cheats. So, do you feel happy about paying your taxes when you know what the wealthy can get away with?
You remember Hollande’s 75% tax on incomes of over €1,000,000, which was declared unconstitutional and abandoned? Well, back comes “Mr Handyman” Hollande with the bright idea that the tax should be paid by companies as a business expense, rather than by the individuals. This idea raises more questions than it answers. What about the self-employed, including lawyers, film stars, footballers etc? They will be let off say the government, as if their high incomes are somehow more socially acceptable.
And then came the inevitable confusion in communication when the chief of the French Football Federation said that football clubs would be exempt and he’d had this on good authority from the President himself. Not so, retorted the government the next day: football clubs will pay. Another example of Holland’s messy and weak leadership, giving no clear direction or message.
And whilst the rich find ways of staying rich, the downtrodden and poor get ... poorer. Auto-Entreprises will now pay between 2% and 3% more in social charges in 2013, whilst only 6% of dividend income for company directors of SARLs will be eligible for social charges at 15.5% (the rest will bear full social charges, ie. 45% or so).
“Go on,” I hear you think. “I might just start taking cash payments like everybody else.” Yup, cash is back, and you can see why.