Why is David Beckham only playing in France for 5 months: tax
A VERY nice little catch here by The Mirror on why David Beckham is only playing in France for five months:
The star’s contract at PSG runs for only five months.
If he stayed any longer than six he could become liable to a proposed 75% tax on his entire multi-million pound earnings by the socialist French government.
There’s some large number of people out there who insist that people don’t change their behaviour in the face of high tax rates.
And yet the actual evidence in front of us is that people change their behaviour all the time in the face of high tax rates. From everyone who could carry a tune leaving the country in the 70s through to this evidence we have here over this French 75% tax rate. Their top actor, Gerard Depardieu, has gone to live in Russia (Russia FFS!) rather than pay 75%. The country’s richest man Berard Arnault, has gone to Belgium. And a super annuated football player will only be there for half a season.
The lesson of all this being that there really is a Laffer Curve you know. It really is possible for tax rates to be so high that they reduce tax revenue. As it happens, the best current guess (for it is, necessarily, a guess) by HMRC is that the peak of that curve for income tax is 46 or 47%. And for capital gains tax, 28%. Given that we’ve got a top income tax rate of 45% and CGT is 28%, there’s not really much more we can squeeze out of the rich.
Whether the rich should pay more tax is entirely another matter.The point is that if we try to make them they won’t: they’ll bugger off instead.