Tuesday, July 13, 2010

Mme Bettencourt's Taxes

Mme Bettencourt's fortune has been estimated at €14 billion. Let's assume that €10 billion of that is invested in stock of L'Oréal. The company's shares are selling for about 80 and currently paying a dividend of 1.50, or 1.9%. Dividends on 10 billion would therefore be approximately 190 million. Yet we know, because Mme Bettencourt's tax advisors and lawyers have told us, that she has paid an average of €40 million in taxes over the past 10 years, or 21 percent of her income. Yet she received a refund of €30 million under the tax shield last year, and the tax shield is supposed to kick in at 50% of income. No doubt I'm overlooking something quite obvious here, but isn't it time we had a reasonably careful accounting of Mme Bettencourt's tax liabilities, payments, and refunds? Would pushing the tax shield back up to 60% really drive Mme Bettencourt and her fortune out of France, as Pres. Sarkozy claims to fear (or at any rate that portion of her fortune that hasn't already secretly fled)?

Form and Substance

What a long way we've come in the three years of Sarkozy's presidency when it comes to solemn confrontations with the press. At the beginning it was all pomp and circumstance. The setting was regal, and sometimes courtiers were invited to witness the performance. But the watchwords now being thrift and honesty, all the props have been stripped away, all the gilt and upholstery and tapestry banished, and we have the president face-to-face with a lone representative of the people (or, rather, of the state TV network, whose new boss reports directly to the president), across a card table, out in the back yard, as it were. There will be no garden party this year at the Élysée, but there was last night a backyard conclave.

Sarko seemed tense, drawn, angry at times, exasperated at other times, didactic, impatient, and rude. His voice at first was surprisingly hoarse, as if he'd been shouting for hours. Many of his familiar rhetorical tricks were on display. Questions were deflected and turned back on the questioner: What would you have me do? How could I do otherwise? All our neighbors have done X, what choice did I have? David Pujadas tried gamely to give the president the répondant he claims to want, but the president's style is designed to make follow-up seem petulant and petty. "I've already thought of everything you can possibly ask me," he seems to be saying, "and my answers are tailored for maximum efficiency. Any dawdling over details is a waste of time, and time is pressing." Indeed, this was a recurrent theme of the evening: any diversion from the Sarkozyan agenda, be it for scandal or debate of the details of his self-vaunted "reforms," was treated as theft from the precious few moments remaining to him to do "what the French people elected me to do." At times he seems genuinely pained by these "distractions," as if he had planned every moment of his five years and now will have to leave a few things undone because ingrates have forced him to waste time defending transparently honest ministers or exercising his compassion on those who smoke the taxpayers' money: "I am a just man. When someone makes a mistake, I try to find out why before acting."

Despite this concern with lost time, he devoted the first quarter of an hour to the Woerth affair, even though his opening gambit was to say that Woerth has now been cleared by the inspectors of finance. Yet in the next breath he named a commission to study the issue of conflict of interest, indirectly acknowledging a problem with his "honest and competent" minister. And again the old refrain: "Je ne suis pas un homme d'argent. If I had wanted to make a lot of money, I wouldn't have gone into politics. I wouldn't have had to put up with calumny and injustice."

As for substance, Sarkozy had mastered the retirement dossier, as well he should, since he's been repeating himself for three years now. He's a bit edgier now, less interested in cajoling than in getting on with it. And since he pretends that there is no alternative to his plan, he is impatient with any hint of nuance or opposition. Except on the issue of pénibilité (shall we translate this as "arduousness"--odd that we have no generally accepted word for this in English). Now, the lip service paid to this issue may be simply "compassionate conservatism" in the Bushian sense--that is, a will o' the wisp. Or it may be an opening to compromise, or again--more likely still--to a host of side deals intended to buy off the most truculent opposition. Under the head of pénibilité, one can offer sweeteners to anyone inclined to make trouble. On verra. Perhaps only Eric Woerth knows what's really going down in closed-door negotiations, and perhaps that's why Sarkozy is so loath to part with him.