Tax Exile Gerard Depardieu Gets Russian Citizenship

French Tax Exile Gerard Depardieu Gains Russian Citizenship
1/03/2013
This is very fun news. Gerard Depardieu, the French actor, has been granted Russian citizenship by Vladimir Putin.

The background to this is that the new Socialist President of France, Hollande, has insisted that high income French people must contribute more in these tough times. A 75% income tax rate over €1 million a year in income. Depardieu demurred and moved out of France to Belgium where the tax rate is considerably lower.

This caused outrage among the French politicians who insisted that the goose must sit still to be plucked.

What Putin has done is of course just quite magnificent trolling. Trolling in international diplomacy which is to be admired for its sheer chutzpah. For of course Depardieu didn’t apply for Russian citizenship. Nor (unless he’s got a great deal less sense than I give him credit for) is he going to go and live there. But it does provide the opportunity for everyone writing about this, like me here, to point out that Russia’s top income tax rate is 13%. They have a flat tax system you see. Just a straight 13% of income after the personal allowance.

And the most notable thing about the introduction of that system there, down from the almost impenetrable Soviet tax system, is that revenue collection went up when this low rate and simple system came in. It just wasn’t worth lying and cheating to dodge the tax system any more. Just declare all your income and pay that small percentage over.

True, it’s exceedingly doubtful that a 13% flat tax would increase revenues in the US or UK. But it’s certainly an experiment that I think it would be fun to try.