Archive for September, 2011

This Relationship Cannot Be Avoided . . .

25 September 2011 Leave a comment

Usually I am busy creating my own posts but this week I took particular notice of these blogs.  I can’t help but share these posts as they all shed light on the current Franco-American relationship.

Guess who loves Paris the most?  According to Adrian Leeds, the American tourist still tops the list!  We just can’t seem to get enough of France as international travel destination in spite of current economic woes.

Of course there is the reciprocal.  President Nicolas Sarkozy was in the U.S.A. for bilateral talks.  My good colleague Michael Barrett was able to catch a little of the French President’s humor in this news post.

Then I am told to leave and take a vacation!  The Best of Nice Matin (the local newspaper) highlighted the upcoming G20 summit here in neighboring Cannes.  The region will be in an absolute mess with traffic and infrastructure congestions during the first week of November.  So I took this American blogger’s advise.  I booked my flight to JFK from October 28th till November 11th.  I wouldn’t want to get in the way of others enjoying the French Riviera. 😉

Categories: Everyday Life

Taxes Are a Matter of Perspective

19 September 2011 2 comments

So my checking account is breathing a sigh of relief now.  Why?  Because there is barely any money in it.  The big tax deadline in France just passed on the 15th of September.  I just paid mine in one sum for all my income earned in 2010.   So how painful are taxes in this country?  So far, I don’t find them that much more painful than the American experience.  Plus there are other European states that have a higher rate of income tax than the Gauls.  I’ve heard rumor Germany can be as much as 60% and let’s not talk about Denmark.  So what is different?

First I believe there is a psychological impact that makes one feel that taxes in France are significantly higher.  How so?  Well for one, it is 100% the responsibility of each citizen and resident to manage their own taxes.  Not a single company in France assist their employees in managing their incomes taxes.  (Please note that French companies do contribute towards the social security taxes of each employee that funds the health system and sick leave.)  In the States, we always fill out our W2 forms on the first day of hire declaring how much we are authorizing the company to take out of your paycheck to send directly to Uncle Sam.  In France, the company stays completely out of this relationship.  It is the only European nation set up in this way as everyone else has followed a variation of the American model.  So your paycheck in France may feel a bit bigger in the pockets but you have to remember that there is a big tax bill arriving in your mail later.  And that is where the psychological impact comes in – you get a full lump sum of taxes staring at you in the face.  (Instantly any foreigner will know how to curse in French upon receipt.) In the States the average person is contributing a little here, a little there throughout the year and then trying to claim a tax rebate because they have contributed too much.  Tax rebates don’t exist here; the best you can do is have a zero tax bill (which does happen).

Donnez-moi votre argent!

Donnez-moi votre argent!

Now the French government has done progressive things to enable the average citizen to pay this daunting bill.  First, I have heard more than once that the people working at the tax office are actually nice (contrary to the stereotype of French customer service) and more than willing to help you as long as you show willingness to pay.  Next there are actually 3 due dates throughout the year: February 15th, May 15th and September 15th.  The government will graciously divide the previous year’s tax declaration into thirds.  Of course if there is a change in your tax declaration for the year, you calculate that difference on the last date in September.  Another support mechanism is the famous Livret A account.  This is a savings account that automatically comes with your checking account at your local bank.  The benefit?  It is tax-free interest.  The motivation is for you to put aside money in this account to pay your taxes.  If you are good at managing your money and depending on your income, you can easily gain a few hundred euros by the end of the year from your Livret A.  These mechanisms help form the French society to be more known as savers and not spenders like their American counter-parts.  The French are apt to save up for a big purchase instead of buying on credit.  Credits card do exist here but aren’t seen in your average French poche (pocket).

Click to expand image.

Cross Comparison of Income Taxes

Another interesting approach is that the French government approaches taxes by people’s address than the actual person.  I created a very high level flow chart comparing the two systems.  Of course I have left out a lot of details on both sides but it gives a general sense of perspective.  I welcome my reader’s feedback on the flow in case of errors.  As you can see, you are declaring all revenues earned at your home address.  Those revenues include all accounts you have signature power over, all accounts your partner has signature power over, all accounts your parents (if living with you) have signature power over and all accounts your children (if living with you) have signature power over.  Notice how revenue remains vertical along family lines and not by individuals.

By law, when you die your estate is automatically given to your children (looking down); if they don’t exist the estate is given to your parents (looking up); if they don’t exist then your partner (looking horizontal); if they don’t exist then your declared beneficiaries.  You can’t override this algorithm by moving your declared beneficiaries to the front of the line.  It explains why estates in this country have remained along family lines for centuries – literally.  I even read a legal advice column advising a woman seeking divorce to demand alimony on the basis of her children’s financial needs, not hers.  By approaching the legal situation this way, she will be awarded more money in the French courts.

Sound crazy?  Not really.  You have to keep in mind that France has been around a lot longer than the United States with a legacy of royalties, monarchs and empires.  The United States is culturally too dynamic to view finances, taxable revenues and estates this way.  Plus you see direct results of your taxes in France.  The infrastructure is top of the line throughout the country.  Public transport is well-developed and affordable.  Cities and villages provide so many cultural opportunities free to the public.  You have a landmark distribution of health care.  Education is at a shockingly minimal cost compared to American rates.  The biggest public sector is the department of education, not the military.  It is also nice to simply pay one governmental system instead of several like in the States.  There is one Public Treasure that will gladly accept any of my checks for taxes.  Then that system will allocate the funds to my corresponding Région, Département and Commune.  Again it is a daunting system but streamlined and maintainable.

Give me your money!

Give me your money!

What is crazy is I can never escape Uncle Sam.  My American social number is tattooed to my fesse (butt) and Uncle Sam knows it.  Looking back at the French model, you may wonder how does the French tax its expatriates that live in another country?  Well they don’t.  The French views it that if you are living in another country, you should be paying that country’s taxes.  Your address is no longer in France allowing you to escape the tax flow.  Uncle Sam doesn’t see things this way which is flip side of taxing by individual.  The United States is the only country that taxes its citizens regardless of where in the world that citizen resides.  (yea, read that sentence one more time)  Many will argue that “Wait, there is a tax treaty between the United States and France!”  True, no denying that fact.  As they say the devil is in the details.  Americans living in France are in no way exempt from filing taxes with Uncle Sam; they are simply given a tax credit.  Currently that limit is set at $91,500 for a calendar year.  Once an American earns in revenue greater than that amount, they are expected to pay American taxes in addition to the French taxes they already paid.

Luckily I am not near that threshold but I still have to watch out and be attentive of that figure.  Remember that wonderful Livret A account I mentioned above?  Well it is tax-free through Marianne’s eyes but not through Uncle Sam’s eyes.  I have to declare that interest on my American tax form.  There are other ways of saving for the future here in France that I have to keep in mind how it will play out in the American tax system.  Then don’t forget there is the currency exchange.  I may not earn more salary in a year but if the Euro becomes that much stronger, I get that much closer to the threshold.

Also as a resident outside of the States, I now have to declare two forms to the government.  My tax form goes to the IRS and a thing called the FBAR goes to the Treasury Department.  That FBAR form doesn’t declare my revenues but just lists all foreign bank accounts in my name.  If the IRS decides to audit me, they knock on the Treasury Department’s door and asks for my FBAR.  If the accounts don’t match on the two forms, then I get a lovely fine.

So now who do you prefer to pay, Marianne or Uncle Sam?

Categories: Everyday Life

To Be or Not to Be . . . Then Which ‘Be’?

2 September 2011 1 comment

It is amazing to me that after a year of being a foreign land that integration is still a choice.  You would think that by now it would be second nature.  Instead I find that choice of integration is always there on my breakfast table next to my yogurt when I wake up.  It is a daily choice – to integrate or not.  To my surprise it isn’t a one time event that happens on the first day nor after three months nor after a year.  Integration is no different from the daily choice each human makes to decide whether they will be happy or not for that day.

I often get asked why I came to live and work in France.  One factor I proudly retort is that I had the influence of one my older brother’s who was an expat.  I witnessed his personal journey through several foreign lands; even ones that held a higher security risk such as South Africa and Syria.  It was a risk that I admired.   I remember one night when I visited him in Johannesburg and laid on his floor watching one the most beautiful thunderstorms in my life.  Then I had an epiphany, I envisioned the map of the world in my head and realized I am now at the bottom of Africa.  It was a bit surreal.  I am ‘here‘ and not ‘there‘.  Africa at the point became more than just a bump my fingers encountered as it skimmed across a globe.

On the other hand I have always had a quiet critique of my brother.  I never felt he integrated to these various places that he called home.  He quickly gave up his Italian classes in Milan.  He specifically chose South Africa because it was English-speaking.  I don’t even think Arabic crossed his mind while in Damascus.  His life was very insular and never having to leave the expat community.  Of course most of his journey happened without the Internet; a paramount tool that helps me integrate in France.

Don’t misconstrue my thoughts.  I am not saying his journey was a failure.  It was a fruitful journey in his perception of life and the values he stands for.  I now better understand which choice he made at his breakfast table.  I still critique his choice but I now have a clearer picture on why he made his choice.

What Am I Going To Do Today?

What Am I Going To Do Today?

I also see the same choice being made by my colleagues at work.  Obviously after a year I have grown closer to some allowing for non-business conversations.  Some colleague have openly shared with me that they are not trying to integrate into French culture.  When I hop into their car to go for a lunch, French Riviera FM (the only English-speaking station in the area) is on the radio.  They share which movies they recently viewed by downloading the English or American version off the Internet.  If we make plans to go to the cinéma, the only choices are the VO’s (version originale).  They have no plans even to develop friendships with a French person.  At times it can beg the question “Well, why are you here?”  Ironically, within the same conversation they make it clear the Côte d’Azur is home for them.  They don’t see themselves anywhere else.  They recount the good feeling when they disembark from the plane at the Nice Côte d’Azur International airport.  The Brits are notorious for making their own little colonies such as the town of Antibes here in the Côte d’Azur, a little village near Dordogne in western France and even in Spain.  Other more subtle choices are made such as not switching your driver’s license.  French law gives you one year to do the exchange or take the French driver’s test.  If you are caught as a resident of France with a foreign license (European Union members are the exception), you face a large fine.  So after living here for several years, these colleagues are inadvertently putting up a barrier.  They have a fear of driving and getting caught.  Consequently they cautiously drive back and forth to work and keep any driving to a minimum.  How does one discover your new home under that condition?

Of course for those that find a native to develop an intimate relationship, this choice becomes more straight forward.  The choice continues to be on their breakfast table but the relationship will push the decision so that appears seamless.  Failure to integrate very well may mean failure to the relationship.  Then add children to the mix and integration will be essential for survival.  I had an interesting chuckle at an expat Happy Hour recently this summer.  It is a good group of professionals mostly from Europe and North America.  Of course one of the ice breaking questions is “What brought you to Nice, France?”  Most of the responses center around professional reasons and the beauty of the area.  A Finnish guy threw me a surprise to say immediately “Women“.  He found it easier to date here in France because he is considered exotic; so he left his independently willed Finnish women and took residence here.  To him I say “bonne integration“!

My aim here is not to be an integration apologist nor to be a moralist to say one decision is better than the other.  I just feel motivated to reflect on that fact it is a continuous decision.  I openly admit that I have my lazy days.  I am at that breakfast table and I choose conscientiously to not integrate.  That day I could careless what the proper conjugation of être (to be) is at the moment.  That day I want to tell a joke in English.  That day I want the news explained to me in English.  That day I want a cheeseburger, cooked well done and a big Coke and yes, watch me eat it with my bare hands!  (The French love cheeseburgers too but they refuse to pick it up.)  And just maybe, if I feel a little arrogant, I will cut my lettuce in my salad and not fold it onto my fork!  All of these rude demeanor in a place I call home, too.

I often think back at the time when I taught English as a second language to immigrants arriving in west Philadelphia.  Before I was often sympathetic to immigration issues and rolled my eyes at English Only attitudes in the fabric of American politic.  Now I am more convicted towards the cause because I really see things through their eyes.  I admire those students even more on the choices they had to make to survive.  They too had the same decision to make at their breakfast table every morning.  Daily struggles could easily make a person give up on integrating and just cling to those around them that speak, walk and pray the same way they do.

So as Hamlet enters stage left to say his signature phrase known across the anglophone world, I enter from stage right to pose the second question “but which ‘be‘ will you choose?

Categories: Everyday Life