Saturday, May 14, 2011

remarks on remarks

This started out as a comment on Ken Broadhurst's post, in which he remarked on French taxes. 
Ken said there was talk of eliminating the income tax here. I hadn't heard of a move to eliminate the income tax. There's been a move to remove the yearly estate tax and it's going to be altered this year so that households of over €1.3 million are at the low end rather than €750,000. The old minimum took in too many not so rich people who lived in places where home prices are up there. Just owning your home made you rich. And there has been talk of a super tax on super salaries, but they haven't defined "super" yet. This reminds me that I should start our French declaration. The French declaration is very simple; most of it is pre-filled so I just need to add US dividend and interest income (for calculation of the tax base). We don't have to do any of the calculations; their computers do it for you and you get the final notification in the fall and finish paying it off or get a refund. After doing the US declaration, this is a breeze.

The VAT  (value added tax) is the biggest income producer for the country. Some say it's unfair because everyone has to buy things, so the poor are taxed more heavily in proportion to what they can afford; they spend more of their income. In Pennsylvania, where I'm from, food and clothing were not included in sales tax (don't know if that's still the case), to address that problem. Here, no. The VAT is about 20% and it's included in the price tag. So if a printer costs €100, that TTC (Toute taxe comprise) and that is what you pay. When you are comparing prices, it's useful to take that into consideration. If a printer costs $75 and you have to add 6, 7, or 8%, depending on where you live in Pennsylvania, then in the end that printer might actually be less expensive in France. That is just a hypothetical situation; whenever I really calculate, it's almost always cheaper in the US, even when the dollar is stronger.
Energy has extra taxes, so that our liter of gas is an enormous amount of tax for very little actual cost of the stuff. At our current €/$ rate, it's about $2.25 per liter (*4 brings you up to about $9 per gallon!) I almost laugh when US friends complain about the price of gas there.
What else is new? AARO had its annual general meeting at the Tallyrand building on rue St. Florentin. We had an excellent speaker, François Heisbourg, who spoke about the US and the new world "disorder". He started with a joke about the president walking on water, but it seems more like trying to walk on eggs. The Hôtel de Tallyrand  is where the consular services used to be, where we got our passports renewed and reported the birth of our babies, where foreigners got their visas. Now the consular services are at the embassy and this building has been completed restored. Part of it is still US, the George C. Marshall center (because it was the headquarters for the Marshall Plan). The rest has been rented out to a law firm. It's beautiful. I was volunteering -- greeting people at the staircase to urge them to go up to the meeting -- and people stopped to admire and remember, "that's where the security gates were." "That's the old passport office."
Tuesday evening we got together with the kids; Claire was in Paris on business and spending the night at Louis and Gwen's. This morning, Anne left for Cannes. She got her list of movies she wants to see. Last year she was a little disappointed, so I wish her better luck this year. Tomorrow, if it's not raining, I'll go over to the ballpark and root for the PUC. I haven't been to a game since about this time last year. Emma, we think, is still in the southwest of France, but according to her last very short e-mail, she's somewhere where the internet connection is very intermittent and there is no cell phone service.

2 comments:

  1. For more on PA sales tax: http://en.wikipedia.org/wiki/Sales_taxes_in_the_United_States#Pennsylvania

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  2. Thanks Ellen. Very interesting. Yes, the VAT is regressive, not progressive. But there has been talk of a flat tax in the U.S., which would also be regressive.

    Some things cost less in the U.S., but I'm not convinced that groceries do, even with the VAT in France. And not just in San Francisco,but also in North Carolina, where I go annually nowadays. I think groceries are expensive there.

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