La Rentrée in Versailles

Message for the Obama and Romney campaigns:  I've done my due diligence and I have decided who I will vote for in November so you can stop trying to win my vote. (Though it's not as if either of them was really trying terribly hard.)  Time to turn the attention to the important stuff.  It's "La rentrée" in Versailles and this small city is hopping with stuff and events that have much more relevance to our lives than some wacky election a few thousand miles overseas.  "All politics is local, "said Tip O'Neill.  Damn right, says I.

La rentrée (back to school/work season) is a bittersweet time in France.  Our apartment complex is starting to fill back up with familiar faces.  So much for the sweet sweet solitude of the summer.  I caught my neighbor petting our cat, Minouche, on the garden wall.  He looked tan and happy.  In fact, all the returnees look great:  our banker (you know, the guy who is working on our house loan), the cashier at the supermarket, our lawyer, our real estate agent, the butcher, the mailman and the medical staff at my hospital.  Vacation in France is an equal opportunity event and it's open to just about everyone - you don't have to be rich to head to the south of France to catch a few rays on the beach or up to Brittany to windsurf for three weeks.

My cell phone is filling up with messages as well from my fellow Americans coming home from trips to the U.S.  In the previous paragraph I called the U.S. election wacky.  I am not alone.  The overwhelming consensus of my compatriots who are back from visiting family and friends in the homeland is that the entire nation fell off its collective rocker years ago and it doesn't look like they are getting up anytime soon.  I'd pass them a cane but they get prickly when folks like me (the few, the proud, the expatriate) make the mild suggestion that rolling around on the floor and spitting at each other is not the best way to pull everyone up.

Back to "La rentrée."  School starts next week.  For the younger Frenchling it actually started weeks ago since she has been attending private math classes again at Acadomia in the center of Versailles.  Two hours a day for two weeks.  Hey, this is THE year she passes her Baccalaureate and this "cruel and unusual punishment" is, alas, necessary.  She seems to be taking it with good cheer so my parental guilt is assuaged.

Sometime this weekend we will be sorting through last year's school supplies to see what can be re-used and braving the "grandes surfaces" (big chain stores like Carrefour or Auchan) to purchase what's missing.  This is my least favorite Fall activity since it involves shopping at the local mall alongside large crowds of ill-tempered parents and children - all of us doing our disagreeable duty and shelling out good money for things that are required but never used (those ardoises, for example).  Amazon France and Gibert Joseph Versailles will also be getting a lot of last minute orders from us as the younger Frenchling pulls out those summer reading lists and (surprise!) sees a few titles that she doesn't have and didn't read.

As for the city of Versailles, things have gone from sleepy and quiet to its more usual pleasant hum of activity.  The days are shorter but the lines at the local shops are longer. Traffic is starting to be its usual nightmare.  It's harder to find a place to park. The city itself has seen some significant changes over the summer.  One of my favorite sites for local news, MonVersailles, has more details:  Two New Bus Lines and The Remodel of the Collège Jean-Philippe Rameau (the Frenchlings' old school).  This post, En vrac, La rentrée versaillaise, was a gold mine of information about things I knew (those new traffic radars on the avenue de Saint-Cloud) and things I didn't (the ex-President of Senegal lived here).

And, finally, on a personal note (and not of general interest I think to our fellow residents here in Versailles) the Flophouse will definitely be moving in December.  We signed the Compromis de vente yesterday in front of the notaire, our real estate agent and a representative of the owners.  That little house in Porchefontaine will, after the work is done, be the new physical location of the Franco-American Flophouse before the end of the year.  In a surprise twist my mother-in-law informed me that our new house is not far from another house just on the other side of the Avenue de Paris where my French spouse lived for a couple of years as a child.   Ah, the advantages of having married a French Army brat. :-)

Chemo Round 5 and the Driver's Seat

A reader (Just Me) passed along this wonderful Ted Talk about making decisions in the face of a life-threatening illness.  The research seems to show that there are times when it's not a good idea to grab the steering wheel.  Sometimes it's better to let someone else drive for awhile.  Nothing to stop you from being vigilant and helping the driver along but you don't always have to be the one navigating the early morning traffic on the périphérique.

This is a tough lesson for anyone with a strong internal locus of control (someone who believes that he or she is in control of his or her life).  Confession time - I used to be like that.  The reasons are probably a combination of North American cultural factors, upbringing and basic personality traits.  I was a I-Can-Do-Anything-If-I-Just-Put-My-Mind-To-It and Barriers-Are-There-to-be-Torn -Down-if-They-Get-in-My-Way.

But here's the thing - God (or the universe, if you prefer) has a sense of humor.  Stuff happens and into the life of the most controlling personality will come situations that are not within his capacity to prevent or change.  I consider myself very fortunate to have received that lesson a few years ago when I  realized that I had a drinking problem.  For an alcoholic the only control he or she has is the decision to take (or not) the first drink because all bets are off after "just one."  Control isn't possible for us and the thirst will always win no matter how hard we try to drink normally.  Realizing this is the first step toward recovery and it is terribly terribly hard.  You literally have to crawl your way back and re-learn how to live minus the magic potion.

After coming to this realization, I got myself into a program that I'm sure you've heard of.  I won't name it here because this is a group that takes anonymity very seriously for very good reasons.  They do not advertise.  But you should know that they are literally everywhere.  It's one of the less well-known international organizations and you can find them in almost every city and every country in the world.

The program has tools and pithy sayings that represent the collective wisdom of generations of people with this problem.  It worked for me and it is still, even now that I am sober, an enormous pleasure to walk into a room, grab a cup of coffee, and settle back into a chair to listen and learn.

Those tools, believe or not, turned out to be absolutely indispensable for dealing with cancer.  How do you get through chemotherapy?  One day at a time.  The others are just as helpful but the very best lesson I learned (and re-learn) every single day is this:  We can believe or not believe in the existence of God but what is absolutely dead certain is that Her name is not Victoria.  I do not rule the world. I do not decide for others. I have no power to make anyone do anything. I cannot prevent bad things from happening.  Life, as they say, is in session.

I just got off the phone with a friend in the program and during our call I asked him what he thought about the Driver's Seat versus the Passenger's Seat and he replied, "I prefer to sit comfortably in the Back Seat."  This is not fatalism or giving up.  Like the Ted Talk demonstrates, it's simply a recognition that stuff happens and total control is a fantasy.  Acting under the illusion (or being forced to) that things can be different if you just apply enough willpower or make the "right" decision is not necessarily in your best interests and certainly does not lead to serenity.  Part of dealing with any life-threatening situation is right-sizing your ego and having a clear understanding of when it is  appropriate to drive yourself and when you'd be much better off letting someone else take the wheel.  Enjoy the Ted Talk.

The 2012 Election and the U.S. Expatriate Vote

There is an excellent article up on the New York Times website called "Evaluating the Expat Factor" by Brian Knowlton.  Both U.S. presidential candidates, Barack Obama and Mitt Romney, have been going after votes and money abroad.  This post by swisspinoy at Isaac Brock pointed out that the Romney campaign revised their website to make it easier for Americans abroad to donate to the campaign.  (Note to the Romney campaign, it still needs work.)

A couple of things worth pointing out here about this election and expatriates:

Political Polarization:  The American political landscape is divided up into two camps often called "Red" and "Blue" (Republicans versus Democrats, Right-wing versus Left-wing).  It appears that voters who consider themselves to be in one or the other camp have pretty much made up their minds and will vote for their candidate.  This is why it is such a close race (see the Politico website here for the latest polls).  Are there other candidates besides these two?  Indeed there are:  libertarians, socialists, greens and independents but they are considered to be irrelevant.  Not much room in this race for those third parties and Americans (to my knowledge) are not allowed to "voter blanc" (none of the candidates).  For all extents and purposes the race is between the Republican and Democrat candidates - between the "Reds" and the "Blues."

The Chase for the Undecided:  This polarization means that the race is on to grab the few independent or undecided voters who have yet to make up their minds a mere two months before the election.  Barring unforeseen circumstances much of the vote is locked in already for one or the other candidate and so their only hope is to find and convince the few people in the homeland and outside of it to vote in their favor.  This means, mes amis, that a small minority of U.S. voters will define the political face of the nation for the next 4+ years.

The Expatriate Vote:  Where do Americans abroad sit in this divided political arena?  No one really knows.  There's no census so even the number of U.S. citizens abroad who are potential voters varies widely between 2 to 7 million.  In 20 years abroad I've never had any direct communication with any political candidate in the U.S.  Unlike last last French election where the candidates sent emails to expats, nothing like that is happening in the ramp up to the 2012 election.    As Knowlton points out the conventional wisdom is that the overseas military votes right and civilians abroad votes left.  Is that true?  Not necessarily.  I've seen many articles that claim that the expat vote is more to the Left (or the Right) but that tends to be based on limited experience.  An American expat in Paris, for example, may look at his social and business circles, see mostly Democrats (or Republicans), and then extrapolate from that.  That is a very dangerous error and anyone who claims the expat vote for one or the other party has very little empirical evidence to back that up.  Knowlton is absolutely right when  he talks about the diversity of this population. There are small businessmen and women, Americans married to foreign nationals, retirees, missionaries and they are scattered all over the world.  Almost every stereotype about Americans abroad is really just hot air and until we get some decent research (and I don't think the studies he cited are conclusive) any broad brush used to paint American expatriates should be taken with a BIG grain of salt.

Just for fun, here are a few other things about the American Diaspora and voting that I think Knowlton didn't talk about in his piece:

Limited Voice:  Our voice (such as it is) is filtered in various ways.  There is the odd nature of how Americans abroad vote (in their last state of residence).  Our opinions often go through the local political party organizations like Democrats or Republicans abroad or the various diaspora organizations like American Citizens Abroad (ACA) or the Association of Americans Residing Abroad (AARO).  The latter are purely non-partisan.  My experience has been however (and please let me know if your experience is different) that most Americans abroad belong to none of these organizations.   Hard to know if either of these organizations (and I truly like them, deeply appreciate their efforts, and am a member of both ACA and AARO) really represents a majority of Americans abroad.   I also question seriously whether the political party overseas branches have any real pull with the homeland party HQ's.  Can they claim to be able to deliver X number of votes or X amount of money?  That's the kind of information homeland politicians want to know before they invest time and money in winning this population over.  And, as far as I know, there are no polls that include the opinions of overseas Americans.  Direct mail to U.S. politicians and candidates is iffy at best - some local politicians never answer at all and some answer with a form letter (like the ones I received from the Romney campaign and from my local U.S. senator).

Influence of the Host Country:  No one talks about this but I think it matters a lot.  People change when they go abroad.  What seemed vitally important in Seattle, Washington becomes much less so a few thousand miles away and in another context.  Events (like 911 or the recession) are viewed from a distance and the main source of information about them is often the local media. Such things are lived differently by those of us who live outside the U.S. and how they are interpreted can be heavily influenced by the people around an expatriate who are not Americans.  Obama is very popular in France and if you live here and are fairly well integrated, your co-workers, family and friends will more than likely share their opinions about who you should vote for and why. They may even express a strong negative opinion if you declare for the other candidate. That situation may be entirely reversed in other countries where Obama is not so popular.

Different Interests: Let's be entirely honest here, the interests of Americans abroad are not exactly the same as the interests of people in the homeland.  For a homelander, Marriage Equality may be a big deal but it's not likely to be one of the top burning issues of an long-term American abroad.  Same for Obamacare since a lot of us live in countries that already have a national healthcare system.  The future of Social Security is a toss-up and depends on if an expatriate qualifies for it or has close family members already in the system.  If not, so what?  On the other hand, the things that Americans abroad really care about like U.S. tax policy, consular protection and citizenship for children born abroad are not even a blip on the radar of the average homeland American. And it must be said that there is one major issue that has united Americans abroad in fear and loathing and that is FATCA. Democrat or Republican abroad, no one likes it and if the discussions on the Internet are anything to go by this is having a major influence on how this population will vote in November.

Probably the only issue that both Americans abroad and homelanders consistently share is foreign policy and even then Americans abroad may have a radically different take on it because they have to live with the consequences of it.  This should not be taken to imply that Americans abroad don't love the U.S. or want the best for it or that homeland Americans don't wish their citizens abroad well (no accusations here) but since the two don't really have much of a dialogue, the default is for everyone to vote his or interests convinced that his or her position is the "right" one.

My conclusion?  If we take the high number of U.S. citizens abroad of about 6 million and assume that a third of them do vote in the next election, that makes for 2 million loose cannons.   Depending on how those votes are allocated (which states have high numbers of expatriate voters) they could change the outcome of Congressional races (senators and representatives).  They could also have an impact on the presidential race.

But there is too much uncertainty and too little information to know for sure.  We'll see what happens in November.  I will confess that I am hoping for a surprise ending - a show of force on the part of the diaspora in November and a little shock and awe in the aftermath.  A wake up call for the homeland courtesy of the "Domestic Abroad."

Citizenship and Those Who Leave

Indeed, immigration has come to be seen as a litmus test for how nations define themselves...We propose here to reverse this perspective in order to examine how nations also have defined themselves by their attitudes toward those who leave... How have countries impeded or facilitated leave-taking?  How have they perceived and regulated those who leave? What relations do they seek to maintain with their citizens abroad, and why?  Citizenship is conceptualized not just through entry but through exit as well. 

Citizenship and Those Who Leave: The Politics of Emigration and Expatriation
Edited by Nancy L. Green and Patrick Weil

I've been looking for a book like this one for a long time.  Immigration is a hot topic just about everywhere but emigration is the "elephant in the room."  No one really wants to talk about it unless it involves somebody else's crisis like developing nations losing healthcare professionals to North America and Europe.  Some nations like the U.S. don't even bother to track it and don't have any reliable statistics about it.

Flows in and flows out.  Every nation, even nations of immigration, have both and to talk about the inbound without talking about the outbound makes no sense at all.  Even worse it distorts the debate by focusing on only one side of the migration equation.  I would also contend that sheer numbers are not the entire story.  There is a tendency to downplay the numbers and to act as if those few who leave are irrelevant to the life of a nation.  Nonsense.  It matters a lot who leaves and why.  A few examples:  What happens to a country like the UK when the doctors leave?  Or when 2/3 of the graduating university students in Greece announce they intend to go abroad? Or when renunciations of U.S. citizenship spike?  Or when retirees choose to spend their national pensions in another state.  Or when that very important figure, net migration rate, goes negative (more people are leaving than coming in)?

This book which is composed of 14 chapters is a start at rectifying that.  The subjects range from "The Cost of Emigration" to "Migration and National Consciousness."  All the essays are quite good but here are a few remarks about three chapters that give a historical perspective.

The Exit Revolution by Aristide Zolberg
It's very hard for a 21st century person to project himself back in time and see what Europeans saw when they looked across the ocean and saw vast quantities of virgin, "empty" land (not really in truth) just waiting to be settled.  In response to that pull, European countries did react and tried to make laws to control emigration. "So long as governments believed that their population exceeded home needs and that the surplus produced social and political disturbances, they encouraged colonial emigration..."  In some cases this meant pushing rebels, dissenters, criminals, the disabled or the poor to leave - think of it as a safety valve which could be opened to keep countries peaceful.  But when it was not in the interests of the colonial powers, they tried to limit it by trying to stop certain classes of people (like skilled workers) from leaving. On the receiving states' side, the game was exactly the opposite - they wanted the skilled, the middle-class, and didn't want those who might be a burden on society.  Zolberg quotes one 19th century American writer who despaired that the country had become a "refugium pauperum et peccatorum" (a refuge for paupers and sinners).  Eventually European countries became much more liberal in their emigration policies since many did have surplus populations and a lot of social unrest.   Zolberg talks a great deal about the emigration/immigration issue as it pertained to the UK and her settler colonies but he also includes information about other countries as well:  Germany, Belgium and Scandinavia.

The interesting exception to the general pattern of mass emigration in that era, he says, was France.  Freedom to leave France was part of the reforms of the French Revolution but restrictions were put into place under the Napoleonic code and some of these restrictions were maintained until World War I.  As a result of these and other factors (demographic and very few landless peasants says Zolberg) ) France had a very low emigration rate. How low?  Well, in the heyday of European migration to the U.S. in the 19th century, the high point came in 1847 when a mere 20,040 French migrated to the U.S.

Emigration and Nation Building During the Mass Migrations from Europe by Donna R. Gabaccia, Dick Hoerder and Adam Walaszek
This is a fascinating essay that links emigration to nation building in three European countries:  Germany, Italy and Poland.  They claim that all three made an effort to embrace and protect their emigrants from the very beginning and,  "All generated one or more discourses that portrayed emigration as a vital contribution to national strength.  After the 1890's nationalists in all three places dreamed that emigration would spread their culture to less developed areas of the world, increasing their international influence."   Let's look at what they have to say about Italy.

In the 19th century the Italian borders were still shifting and there were Italian speakers in other countries who ended up on the wrong side of the border.  Nevertheless in 1861 the Italian census included Italians in Italy and outside of it.  The latter, 400,000 strong, were called "papolazione fuori di regno" (population outside the realm).   Communities of Italians abroad in that period were called "colonie" (colonies) but the people themselves were not called "coloni" (colonists).   One Italian writer in that period referred to them instead as, "connazionali" (co-nationals, fellow citizens).  In the latter part of the century concern was expressed on behalf of those emigrants who were portrayed as ignorant peasants with an "exaggerated sense of personal liberty" and laws were put into place to protect them from unscrupulous immigration agents of other nations.  The Italian government continued to monitor emigration but (and this is just fascinating) Italian emigrants from the north who went mostly to other European countries were counted as "temporary" migrants while those from the south who went to the Americas were "permanent."  The fact that these migrants were permanently installed there did not mean that the Italian government lost interest in them.  When Brazil had the temerity to declare that all foreigners in that country as of 1889 to be Brazilians citizens, the Italian government protested these "predatory naturalizations."  (At that time Italy did not allow dual citizenship.)  In the 20th century Italy partially solved this by revising their citizenship laws and any Italian who lost his citizenship while abroad could get it back by coming back and living for 2 years in Italy.  Italian diaspora organizations sprung up in places with large Italian immigrant populations - this was very true in the U.S. where the number of Italians was greater in a city like New York than it was in all of Italy's African colonies combined.  Return was quite common - Italian migration was not necessarily a one-way trip.  Many came home to spend their twilight years in their country of origin.

The French State and Transoceanic Migration by Patrick Weil
France may have had smaller numbers of emigrants than other European countries but that didn't mean that emigration and its implications weren't discussed at all in the 19th century.  Patrick Weil says that the debate really began in the late 1830's.  At that time there were immigration agents from other countries who were trying to lure skilled French labor away - something that was detrimental to French industry.  French official worked against this and against some of the more questionable emigration scams.  Weil says that three things changed the context:  an increase in emigration, the conquest of Algeria, and demographic concerns.  Government policy aimed to better monitor emigrants, to protect them from the unscrupulous, and to safeguard French interests.  The prefects were on the front line in this endeavour and the Ministry of the Interior would issue "circulaires" to them to stop certain practices that the French government frowned upon.  "In 1912, another circular, stamped "highly confidential" encouraged all prefects to stop emigration to Argentina."  Emigration was not necessarily forbidden, says Weil, but it could be actively discouraged by administrative controls.  In short, it was regulated.

Going back to the quotation at the beginning of this post and the idea that immigration is a litmus test for the idea of the nation.  You could look at it this way:  legal immigration is about gathering the citizens a nation wants instead of having to be content with what it has.  The criteria for the ideal future citizen has changed dramatically over time.  At one point the U.S. wanted farmers and went to some trouble to poach them from Canada.  Today, the criteria seems to be (oddly enough) a blood relationship to a U.S. citizen, an advanced degree in engineering, or cash.  As for emigration, past European efforts to prevent it were not terribly successful but it was (and perhaps still is) a mechanism that can be used to rid the nation of those who might be troublesome.  It was sometimes even used in a very obvious fashion to purge the nation of the poor.  One of the most shocking examples I came across in my research on this was an old UK program that took the orphaned children of poor British families and shipped them off to Canada to work on farms.

In more modern times, with youth unemployment high and rising in countries like the U.S. and France, emigration is certainly not discouraged and probably helps to relieve the tension that can arise when middle-class university students graduate and can't find jobs.  I've not found any research in this area but there are rumors that many U.S. university graduates left the country during the last recession to teach English abroad. Impossible to know since there are no reliable numbers and that alone should tell you something.  For some reason the U.S. does not track emigration and that is a kind of emigration policy - a decision not to know for reasons that are probably political since actual numbers would shock Americans in the homeland and become yet another source of contention in an already tense political situation.  Just look at how the U.S. citizenship renunciation numbers have been used recently with headlines like, "Renunciations Rise under Obama."

What's clear to me is that immigration is a very dangerous and emotional topic in many countries but emigration may be even more so.  The first is rather flattering to a nation - look at all the people who want to come to our country.  Emigration, on the other hand,  is rarely interpreted so positively and discussions about it tend to provoke very interesting reactions like denial or anger.

And yet every immigrant is an emigrant.  Both are embodied in the same person and it's only the perspective (country of origin versus country of destination) that changes.  In the developed world entry is highly regulated.  Emigration usually isn't but that does not mean that many countries don't have legislation and policies that add up to de facto emigration policies and a few like Israel, for example, still have open anti-emigration policies.  I would argue that for political reasons (homeland politics, international human rights standards, relations between states) it is no longer acceptable for many countries to make the kind of explicit emigration policies that they had in the 19th and 20th centuries.  In many countries open and public policies to control or even encourage it would be politically unacceptable.  This doesn't mean, however, that states don't use quieter methods to achieve their objectives.

Very interesting stuff and the few words I have written above do not begin to do it justice.  I highly recommend Green and Weil's book, you will never look at immigration or emigration the same way after reading it.  My only regret (and it was probably not possible in such a small volume) is that it mostly covers explicit emigration policies where there has been a clear effort to stop or control it. I would very much like to see some research on implicit policies where it's the cumulative effect of different decisions and laws by different agencies or branches of government that add up to an effective emigration policy.  To make it even more interesting, government agents can actually work against each other and at cross-purposes.  There is some indication, for example, that the U.S. State Department and the U.S. Internal Revenue Service are not at all on the same page when it comes to tax policy and its impact on emigration and expatriation.  Research into situations like this one would make one hell of a dissertation.

More About the House

Well, we were not able to sign the Compromis de Vente (the agreement between the seller and the buyer which locks in the price and takes the property off the market) this week because...

Everyone is on vacation. :-)

When I say "everyone" what I mean is that this house has multiple owners.  This is because French inheritance laws are very different compared to the U.S. and are designed to protect the rights of the children and not so much the rights of the surviving spouse.  No one is completely free to pass down his or her property and assets exactly as he or she wishes.  A will (testament) does not change this though there are some legal ways that you can use to (sort of) get around it.  This site (and a darn good site it is too) has a good basic review of the law and I'll use their example below to illustrate how it works.

Let's say that a married couple has a house and two children.  One spouse dies (you) and you didn't do any estate planning ahead of time.  What happens next??

...the [surviving] spouse will receive 1/4 of your estate and the children 2/3 of your estate, with the remaining 1/12th freely disposable, e.g. to your surviving spouse.

So the surviving spouse in our example would get 1/4 of the value of the house and the two children would get 2/3 of the value of the house.  Where it gets very interesting is if there is inheritance tax (which is based on the worldwide assets by the way) due to the French government.  In the past if the heirs owed something, it was due within 6 months but the site I consulted says that some relief is now possible - a deferral of 5 to 10 years - if property is involved. 

I don't know the particulars of the owners' lives (and it's not really my business) but it looks like this is a classic French inheritance situation where there must be a surviving spouse and children, or just several children, as heirs.

As for the house itself, here are a few details.  The house is about 100 years old, brick (not stone) and is located in an area of Versailles that was originally working class (quartier ouvrier).  The main floor is 55 square meters (592 square feet) and is composed of a living room (salon), dining room (salle à manger), kitchen (cuisine) and one bedroom (chambre).  All the rooms are very small but lovely with pretty molding around the ceiling and light fixtures.  There are porches off the living room and the kitchen so you can open up the French doors in the summer and make the house seem much bigger.  No fireplace (it appears to have been removed) but under the carpet are oak floors that could be refinished.  The kitchen is nearly bare and only has one small countertop and one cupboard.  There isn't a second story but there is a basement which has two bedrooms.  The garden is glorious.

I'd call it a "fixer-upper" but I don't think that does it justice (not to mention that the word would imply neglect on the part of the owners).  On the contrary, they did a wonderful job of maintaining it - all the wear (carpets and wallpaper) is simply what one would expect given that a couple and their children spent a lifetime living here.  This house feels loved and all the important stuff is in great shape.  Here are a few pictures of the ground floor and the garden:

View of the living room from the dining room

Kitchen

Hallway

 Bedroom

Garden

Front Porch

Even though we have not yet signed the compromis (now planned for next week), the real estate agency withdrew their advertising and last week, right in front of us, the agent put a Vendu (sold) sign on the front gate.  And (surprise!) one of our future neighbors came over and introduced himself.  Very propitious so far...

Diaspora Taxes: The Exit Tax

Exit taxes have a terrible reputation.  It's almost impossible to have a discussion about them without having someone bring up the practices of past totalitarian regimes like the USSR or Nazi Germany who taxed Jews before they left their territories.  Not exactly the kind of company that modern states wish to be associated with and if you ask a citizen of such a state today whether or not he thinks an tax/penalty/fee in order to leave a country is a good idea, it's pretty likely that he will answer, "Of course not."  There is something very fundamental about the freedom to move where one likes in order to seek other opportunities (provided that the destination country is agreeable) and most people think that states should not be permitted to hold their citizens or visitors captive.

This is, by the way, a very modern idea.  For much of recent history people were essentially prisoners in their countries of origin.  In 19th century Prussia no one (not even foreigners) was allowed to leave the country without authorization.  It took the French revolution to remove a 1669 edict of the king that forbid the French from leaving France.  In 1720 the parliament of Great Britain banned seamen, artisans and other workers from emigrating to the American colonies.  This was revoked apparently only in 1824.  Even the U.S. right after the Civil War saw attempts to control the movement of black workers out of southern states via a system of pass controls (papers that showed their employment status) which made it harder for them to circulate within the U.S.  The next time you hear a native citizen beating his chest and proclaiming, "My ancestors have been here for X generations!" just bear in mind that his forefathers weren't necessarily there because they wanted to be.  They stayed because they weren't allowed to leave.

Fast forward to the 20th century and two documents:  The Universal Declaration of Human Rights (1948) and The International Covenant on Civil and Political Rights (1966). Article 13 of the first says:

1. Everyone has the right to freedom of movement and residence within the borders of each State.
2. Everyone has the right to leave any country, including his own, and to return to his country.

Article 12 of the second document, the ICCPR, has similar language but does allow certain restrictions:

1. Everyone lawfully within the territory of a State shall, within that territory, have the right to liberty of movement and freedom to choose his residence.
2. Everyone shall be free to leave any country, including his own.
3. The above-mentioned rights shall not be subject to any restrictions except those which are provided by law, are necessary to protect national security, public order (ordre public), public health or morals or the rights and freedoms of others, and are consistent with the other rights recognized in the present Covenant.
4. No one shall be arbitrarily deprived of the right to enter his own country.

The rights and restrictions were clarified in the Siracusa Principles (1984) and in General Comment No. 27 (1999).  Where there are restrictions a state must show that they fall within one of the categories (line 3) and that they are proportionate:  "They must be appropriate to achieve their protective function; they must be the least intrusive instrument amongst those which might achieve the desired result; and they must be proportionate to the interest to be protected."

So, yes, under certain circumstances states do retain limited rights to prevent people from emigrating.  Some have gone so far as to argue that such restrictions should be placed, for example, on health professionals leaving developing countries for Europe or the U.S.  These countries are, after all, in a "state of emergency."  The question of whether or not states can, under international law and under certain circumstances, levy a penalty, a fee or a tax on people who wish to emigrate is not clear to me.  If anyone has better research, please feel free to point me in the right direction.  One country that is under fire for violations of the ICCPR, is Eritrea.  They have been censured for preventing people from leaving the country by making passports very expensive or by requiring exit visas in order to leave the territory for whatever reason.  This report by the U.S. State Department says that, "Some citizens were given exit visas only after posting bonds of approximately 150,000 nakfa ($10,000) or more." Eritrean citizens already abroad who came home for a visit had to prove that they had paid the diaspora tax of 2% in order to be able to leave the country again. Reading the media reports, the general consensus of the international community seems to have been that these methods were gross and grotesque violations of basic human rights.

And yet, fees or penalties or taxes on outbound human traffic from one state to another are alive and well in the 21st century.  A surprising number of states do, in fact, have some sort of mechanism for shaking down people who leave a territory.  The simplest and most common is the Departure Tax (also called Airport Exit Tax).  Most countries in Europe have them.  Canada and Australia too.  Sometimes these are simply rolled into the price of the plane ticket.  In other countries, it is payable in cash and you get a little sticker or stamp saying it was paid.  As annoying as these may be, they are clearly not attempts to stop people from leaving. If you can afford the price of a ticket to Australia then surely you can afford to pay 55 AUD to leave.   In general when we say "exit tax" we are not talking about these kinds of fees which have nothing to do with emigration.  So let's define the term more precisely.

An exit tax is a tax that is levied against an individual or a corporation who wishes to transfer residency or citizenship from one country to another.  It is a tax on emigration and/or expatriation.  How does it work and what is its purpose?:

In general, ET [Exit Taxation] aims at levying the potential or latent gains (also called “hidden reserves”) related with the assets that an individual, a company or a PE located in a given country, economically (eg., through allocation to a foreign PE of a trademark or a shareholding), or physically transfer to another tax jurisdiction. A first feature of ET is, thus, related with the fact that it is imposed when no asset disposal takes place, and no revenue is generated.

What might that mean for an individual?  Let's say an individual wishes to move from Country A to Country B more or less permanently.  Country B will become their new "tax home."  Country A will take note and will act as if that person sold all of his/her assets the day before the person officially leaves. Nothing is actually sold but Country A will act as if it was and levy a tax.  This is called Mark to Market and Phil Hodgen has a very good explanation here of how this works.  No actual revenue is generated for the individual (the "sale" is virtual) and that person may very well be in 100% compliance with Country A's tax laws.  So this is extra tax on top of taxes that have already been paid on those assets and it's the act of leaving that triggers it.

How common is this?  Fairly common for corporations in Europe.  In fact the Euro-zone is something of a hotbed of political/legal action in this area.  Lots of European companies want (and theoretically have) "Freedom of Establishment" - the right to move as they like within the EU.  One case that is most often cited in this regard is the National Grid Indus decision by the European Court of Justice in 2011.  In the year 2000 the Dutch company National Grid Indus moved their management to the U.K and that triggered a Dutch exit tax.  The ECJ ruled that NGI had the right to make the move, that the exit tax was not applicable in their case because they still remained a Dutch company but, as KMPG explains here:

The ECJ also concluded that imposing an exit tax may be justified by the need to ensure a balanced allocation of taxing rights between Member States. However, the ECJ noted that the proportionality of the Dutch exit tax should be reviewed in order to determine the compatibility of such a measure with EU law. In order to do so, a distinction must be drawn between the moment when the tax liability is determined and the moment when it is settled. 

The ECJ basically said that exit taxes for corporations are OK within the EU.  However, the tax has to be proportionate (not too much of a burden) and corporations must be allowed to defer payment.

What about individuals (also called "natural persons")?   Again, it is more common than you might think.  This Country Tax System Matrix lists the following countries as having some sort of exit tax for individuals who leave the territory or renounce citizenship:  Australia, Canada, Denmark, Germany, Israel, Italy, Luxembourg (inheritance tax), The Netherlands, and The United States.  I cannot vouch for the validity of this information since this is not at all my area of expertise.  There are surely more - this list does not cover all of the 190+ countries in the world.  It also only contains information up to 2010 and does not include the new French Exit Tax which went into effect in 2012.  But it does show that exit taxes for individuals are not at all uncommon and it should be noted that within the EU the principle of exit taxation for individuals has been held to be legitimate provided that there is no immediate tax charge and that the sums are not abusive or disproportionate.  

What is interesting is that 1. most citizens are unaware that their countries do levy such taxes and 2.  they tend to target high-net-worth individuals so when citizens are made aware of them their robust support for the "freedom to leave" is overcome by their desire to make the rich pay for abandoning them.

A desire for revenge is not only a very ugly emotion, it is not usually a good legal or philosophical basis for taxing people.  It's also very rare to see a politician or a "homelander" admit to a desire to stop or slow down the free emigration of individuals and corporations.  There is an underlying respect for the idea of freedom of movement that most people feel in their bones.  Not even the most rabid anti-emigration native would come out and say openly that that ability of people to move to another country (provided they are welcome in a receiving state) should be restricted.  The debate tends to revolve more around the idea of compensation.  The focus is on what the state of origin loses when these people and their companies leave:  tax revenue, jobs, professional qualifications honed at a local university, entrepreneurial talent.  When it comes to company migration, this dissertation by a Portuguese lawyer summed up this position quite nicely in the conclusion:

Despite the serious doubts expressed in the previous paragraph about whether ET [Exit Taxation] can really be justified in an EU setting, namely on the basis of BATP, we have to concede that company migration may be a domain considerably prone to abuse and also that some form of compensation of benefits provided by the origin state - or better put, a reward for the contribution of the origin state to the profitability of the migrant company up to exit - should be put in place. This would not amount to accepting a restriction without justification but rather recognizing that such compensation is justified as a way to uphold the legitimate right of a state to quell tax base erosion schemes.

Similar arguments are made about human capital but it's a bit harder to get people to accept them because we are talking about human beings ( a group that we all belong to).  Penalizing someone monetarily for the act of leaving one's country of origin (or residency) is not terribly consistent with the ICCPR or the UN Declaration of Human Rights.  And the fact that someone is rich (which is a very relative term) should not ever ever mean that they are deprived of their human rights.

If compensation of benefits is the primary goal, that has some very interesting implications for all emigrants.  How can a state quantify those benefits?  Should every individual leaving a country reimburse it for the cost of public education (primary through university) or police and fire protection for the period he was resident?  Should a person be taxed if he takes his or her children (thus depriving the nation of future taxpayers) to another country?  Is that parent engaged in the abusive practice of "eroding the tax base?"

The last is, I admit, a very extreme example but I stand by my suspicion that allowing states to determine just compensation for benefits received and holding people hostage until they pay up is a form of indentured servitude and a potential nightmare for would-be emigrants.  What a mighty sword to put in states' hands to use in the battle to control international migration.

Enough said.  I would love to hear your take on it.

Buying a House in France

The Franco-American Flophouse has been around for over 20 years.  We've lived in some great places during that time:  Seattle, Paris, Tokyo, Courbevoie, Suresnes and now Versailles.  We went where the work was and like many people we had to balance what we could pay against things like the availability of good public schools and proximity to our places of employment (not easy when both spouses work and one doesn't have a French driver's license).

In all that time we've never actually owned any of the places we've lived in.  In the beginning it was simply because we didn't have two centimes (pennies) to rub together when we were married.  Later it was about mobility.  It's much easier to give notice, pack up, and move to Tokyo at a moment's notice when you rent.

It's taken a few years but lately we started thinking about buying.  The likelihood that we will be moving on again anytime soon is low since I've got a long-term subscription at the Rene Huguenin Cancer Center in St. Cloud.  The other factor is that we really like Versailles, this little community of about 88,000 people.  Forget the gaudy castle, the rest of the town is charming and quiet and the people are very nice.   Pretty conservative too - this town was solidly on Sarkozy's side during the last election.  And finally Versailles is fairly close to Paris  - just 20 minutes on the RER C line.

So, we went looking.  We started dropping in on various real estate agents around town, talking to the agents and describing what we had in mind and getting a feel for the market.  This is the fun part of buying a house because you can still dream of the "perfect" home, the great deal that combines everything you ever wanted (wood floors, garden, American kitchen) at a bargain basement price.  But after you've visited one or two agents you are rapidly brought back to Planet Earth and you adjust your dreams to your budget.

For someone like me from a small regional city in the U.S. the prices are mind-blowing if you are looking for property near and around Paris.  Here's a quick and dirty comparison:

House in Suresnes:  This is a little house near where we used to live when the Frenchlings were little.  It's 65 square meters (699 square feet), was built in the 1930's, has 3 rooms (3 pièces) which means two
bedrooms and a living room in addition to a kitchen area and bathrooms. There's a small garden and patio as well. It's very expensive to heat (see the diagnostic performances énergétiques in the middle of the web page). This house can be had for a mere 415,000 Euros (517,000 U.S. Dollars).

You can do a lot better in terms of price if you give up the idea of a house and look for an apartment.

Apartment in Suresnes:  This one is not nearly as charming as the little house but it's about the same size and has same number of rooms.  The building is more modern so heating costs are less.  This can be had for the very reasonable price of 300,000 Euros (374,000 USD).

How much house or apartment could you buy in Seattle for that much money?

Townhouse in Seattle:  This is a townhouse in the University District with 3 bedrooms that goes for 369,000 USD.   1260 square feet (117 square meters) so it's twice as big as the properties I linked to for sale in Suresnes.

House in Seattle:  This is a house in the Greenwood district that goes for 519,000 USD which is not far from where we used to live.  They do not give a precise size in square feet but it has 5 bedrooms and 2 bathrooms so it's at least twice (if not three times) as big as the house in Suresnes for about the same price.

Of course prices in both these cities vary widely depending on the neighborhood, the type of property and so on, so do not take my quick and dirty back-of-the-envelope calculations to be gospel truth.  I saw some houses in my Seattle search that are well over a million USD and you can certainly buy cheaper property in Suresnes (or any of the other suburbs west of Paris) if you really look. If you are into doing the "Peter Mayle thing"  and want to live in the French countryside, the prices are even better.  It's also important to remember that cost is relative.  If you're coming from New York, London or Tokyo, for example, these prices may seem unbelievably low.

Some other things to think about.  I know nothing about buying a house in the U.S. since I've never owned property there, but here in France when you start budgeting there are a few things to consider.   For starters, you will need to put at least 20% down - it is highly unlikely that you will be given a mortgage that exceeds 80% of the value of the house or apartment.  So, for that little house in Suresnes, you would need to come up with 83,000 Euros (103,000 USD) in cash.  As for the mortgage, the general rule is that the payments may not exceed 33% of your income.  This means you must be earning over 5000 Euros (6,230 USD) a month in order to meet your monthly mortgage payment of 1,739 Euros (2,163 USD). For more information about French mortgages, this site has a good overview.

Where are we in the process today?  Well, we found something here in Versailles and we made an offer.  If all goes well, we will be signing something this week called a Compromis de Vente which is an agreement between the seller and the buyer which locks in the price and takes the property off the market.  The buyer (us) then has 2 months to come up with the money if he is paying cash (I wish) or 3 months if he has to apply for a mortgage.  In that time the mayor's office is informed of the impending sale and can exercise its right to buy the property themselves.

It's going to be interesting - yet another adventure - and I'll keep you posted.