Give Me Your Tired, Your Poor French Millionaires

So France’s new Socialist president wants to soak the rich? My message to French job-creators fleeing the nouveau régime: Mississippi welcomes you.

The first European settlement in Mississippi, Fort Maurepas, was established by French explorateur Pierre Le Moyne d'Iberville in 1699. With the recent announcement by France's Socialist president, François Hollande, of a tax plan to soak the rich, should Americans and others get ready for another French emigration, not of explorers but of entrepreneurs and other employers?

Because that's what may be about to happen -- and it could happen to the United States if Barack Obama and the Democrats follow in Hollande's footsteps.

You might think that the purpose of the new and higher French taxes was to significantly affect the deficit. But it wasn't. Rather, writes Michael Birnbaum of the Washington Post, who notes that the higher income tax "raises too little money to make a dent in France's funding needs," the Socialist tax plan "is more of a political symbol than an economic measure. It will help give Hollande political cover."

Sacre bleu!

Perhaps Monsieur Hollande's leftist political base may be placated by skyrocketing tax rates on job creators, but businesses and investors say the actual, as opposed to the symbolic, economic effect will be to reduce growth -- a tall order when one considers that economic growth this year in France is predicted to be a paltry 0.2 percent as it is!

Many Americans, especially Republicans and other critics of Obama's economic policies, believe the Democrats' proposal to increase the individual income tax by 10 percent on top earners; to increase the capital gains tax; to collect payroll taxes on investment income; to tax employers who don't provide their employees with health insurance by $3,000 per employee; to create a variety of other new taxes related to Obamacare and to increase taxes on the U.S. oil and gas industry by $4.2 billion a year, will hurt the U.S. economy. Even former President Bill Clinton has warned that raising taxes in a bad economy is a mistake.

The French tax increases are, of course, far larger than those proposed in the United States; not only would those making more than $1.23 million a year be taxed on all gains over this amount at a 75 percent rate, but taxpayers who make less than $100,000 per year would be taxed at 48 percent. And that's after already paying a 19.6 percent sales tax or VAT!

If you think the French are taxing everything that moves, you're not far off. 

Indeed, Hollande's new tax policy levies a 3 percent "one-time" wealth tax on assets held by individuals (foreign or French) in France, when the value of the assets equals more than 1.3 million euros, or about $1.75 million. Corporate taxes will be increased in a variety of ways, such as a 3 percent tax corporations must pay on the dividends they pay out to their shareholders. And new taxes will be levied on financial transactions, on lending institutions, and on oil and gas companies.

France's neighbors have adopted different strategies to try to regain economic growth and return the costs of government services to sustainable levels. They have avoided large tax increases. 

Unlike the Socialist government in France, most European countries not only think higher taxes aren't productive in resolving fiscal issues but would reduce growth or deepen their economic blues. A few actually foresee another negative for their French neighbors as a result of these tax increases: a flight of wealthy French citizens, including some non-citizens residing in France (as they generally will be subjected to the new taxes) and French corporations or their suppliers.

And indeed, this seems to be happening. The Financial Times reports that more French people are considering moving out of the country. British Prime Minister David Cameron even declared that Her Majesty's Government will "roll out the red carpet" for French businesspeople fleeing the big tax increases.

And Hollande can't be happy about the reported comments of French business leaders. The head of Medef, the French employers' federation, said earlier this summer that the new higher tax regime will "dry out the economy" at a time when "company profits and orders [are] tumbling and investments [are] frozen."

The French are asking: "Will the Socialists' ‘soak the rich' regime work as the left hopes, or will it hurt growth and make job creation much harder, as many expect?"

Their neighbors are asking a parallel question: "Will their gigantic taxes drive French citizens and non-citizen residents to leave the country to avoid being soaked?"

Switzerland is already preparing. "It's open hunting season on the wealthy in France," Francois Micheloud, a partner in a company that helps foreigners relocate to Switzerland, told Bloomberg news. "The number of Frenchmen asking for assistance has tripled."

My name, Barbour, is an old French Huguenot name, and my great-great-great-great grandfather Louis LeFleur, a Frenchman, founded a trading post around 1800 that developed into Mississippi's capitol, Jackson, a quarter century later.

I wonder if we Barbour boys ought to set up a business to attract wealthy Frenchmen and successful businesses from France to Mississippi. As a low tax, pro-business state with a regime of rational regulation, we could roll out the red carpet and run up the tri-color over Fort Maurepas. Bienvenue, mes amis!



The Scorpion and the Frog

For years, Syria supported a witches' brew of terrorist groups across the Middle East. Now, it's payback time.

For 16 months now, Syrian President Bashar al-Assad has been blaming "foreign-backed terrorists" for the uprising that threatens to unseat him. It's an old scare tactic, one he used 11 years ago, albeit in subtler form, when he referred to the activists behind the so-called Damascus Spring as "a foreign agent acting on behalf of an outside power" -- and one that sounds suspiciously like Muammar al-Qaddafi's attempt to pin his own uprising on international terrorism, Osama bin Laden, and drugs. But as the Syrian rebellion descends into all-out civil war, it is becoming clear that there is a grain of truth to Assad's claims.

In recent weeks, alarming developments -- including videos of al Qaeda fighters released on jihadi websites, eyewitness reports from CNN's Ivan Watson, and testimony from two European photographers who were kidnapped in Syria by militants from Chechnya, Pakistan, and Bangladesh -- suggest that foreign jihadists have indeed joined the struggle against Assad's regime. And these aren't just isolated events: The New York Times reports that at least three al Qaeda affiliates currently operate in Syria, and, according to intelligence estimates cited by Seth Jones, associate director of Rand Corp.'s International Security and Defense Policy Center, at least 200 operatives are fighting with or alongside rebel groups.

To be sure, most rebels are Syrian nationals and the vast majority, no doubt, are not sympathetic to al Qaeda's cause. Of course, that won't stop Assad from attempting to tar the entire revolt based on the presence of a comparatively small contingent of fighters. The Syrian president, however, shouldn't be surprised that there are foreign fighters in his country -- he invited them in, after all. The only new development is that some of these fighters appear to have turned against their erstwhile patron.

A notorious state sponsor of terrorism, the Baathist regime in Damascus has long tolerated the presence of foreign militants as part of its regional strategy. Indeed, an impressive list of militant organizations, including Palestinian Islamic Jihad, Popular Front for the Liberation of Palestine, Popular Front for the Liberation of Palestine-General Command, Fatah al-Intifada, and, until recently, Hamas, has maintained bases or been headquartered in Syria. But while some of these relationships have soured as a result of the Syrian government's response to the uprising, the fallout from Assad's meddling in Iraq and Lebanon will contribute most to his undoing.

Following the 2003 U.S. invasion of Iraq, Syria notoriously became a transit route for foreign fighters looking to wage jihad against coalition forces. According to records seized by U.S. forces in Sinjar, Iraq, more than 600 fighters were smuggled across the Syria-Iraq border between August 2006 and August 2007 to join the Islamic State of Iraq (ISI), an umbrella organization of Iraqi insurgents affiliated with al Qaeda.

West Point's Combating Terrorism Center, which analyzed and published the records, reported that roughly 40 percent of these fighters hailed from Saudi Arabia, with another 20 percent coming from Libya. The remaining fighters trickled in from Algeria, Morocco, Yemen, Tunisia, and a smattering of other Middle Eastern countries. Despite their diverse backgrounds, however, they all eventually converged in Syria, where they either entered training camps on the Syrian side of the border or proceeded directly on to Iraq. The process was orchestrated by at least 95 Syrian "coordinators" who specialized in recruiting suicide bombers and foreign fighters from specific regions, according to Matthew Levitt, a terrorism expert at Johns Hopkins University's School of Advanced International Studies.

U.S. officials made little secret of their suspicion that the Syrian government was complicit in this flow of fighters into Iraq. In public testimony before Congress in April 2008, Gen. David Petraeus, then commander of Multi-National Force-Iraq, said that the Syrian government had "not [done] enough to shut down the key network that supports [al Qaeda in Iraq]." In private, he was even more blunt: A leaked U.S. State Department cable reveals that he told Iraqi Prime Minister Nouri al-Maliki in December 2008 that Assef Shawkat -- Assad's brother-in-law and Syria's director of military intelligence -- had "detailed knowledge" about the activities of al Qaeda facilitators in Syria. Ironically, Shawkat died along with other top Syrian security officials in a July 18 bombing in Damascus, which the regime blamed on suicide attackers. It was precisely the kind of attack he had helped perpetrate against coalition forces in Iraq.

The Iraqi government has also consistently accused Syrian intelligence officials of training terrorist operatives. In 2009, Iraqi officials released the taped confession of an al Qaeda militant who claimed to have been trained in Syria. The head of the camp, the operative said, was a Syrian intelligence agent named Abu al-Qaqaa. The Syrian government, moreover, has a history of conducting these kinds of smuggling operations, as the authors of the West Point report point out. In the early 1980s, for instance, Syrian intelligence operatives helped smuggle jihadists from the Persian Gulf into southern Lebanon. Before ferrying them across the border, however, Syrian officials took photographs of the jihadists' passports and placed them on a terrorist watch list -- they were apparently worried about blowback even then.

Fast-forward three decades, and these fears have become a reality. Shared tribal and family ties across the Syria-Iraq border, coupled with the operation of criminal smuggling networks, mean that much of the 422-mile border remains permeable -- and this time, the Syria-to-Iraq jihadi highway appears to be running in reverse. Brian Fishman, a counterterrorism fellow at the New America Foundation and one of the authors of the West Point report, writes that diplomats say "dozens" of jihadists have entered Syria from Iraq, "a number that prudence dictates likely includes at least some from al-Qa'ida's ISI." This assessment dovetails with a statement made by a Maliki aide reported in the New York Times claiming, "The wanted names that we have are the same wanted names that the Syrian authorities have." In other words, he said, "Al Qaeda that is operating in Iraq is the same as that which is operating in Syria."

A lack of security along the Syria-Lebanon border has also come back to haunt the Syrian regime. Syria has long insisted on a policy of lax border control, refusing a proposal to allow European guards to secure the border following the 34-day conflict between Israel and Hezbollah in 2006 and pressuring the Lebanese government not to step up monitoring from its side of the border. These steps have ensured that the Syrian regime has faced few problems in shipping weapons to Hezbollah, its most powerful Lebanese ally -- keeping the movement well-armed against Israel and its domestic opponents.

But while Hezbollah has remained a staunch ally of the Syrian regime, the unguarded border is now also exploited by anti-Assad groups. From the border region nestled in Lebanon's Bekaa Valley, for instance, hundreds of Lebanese Sunni jihadists have managed to slip into Syria to join the fight against Assad. Many of these fighters have traveled to Homs, a rebel stronghold, but there is at least one exclusively Lebanese unit operating near the Lebanese border, according to the Times of London.

Lax security protocols in Lebanon have also enabled smugglers from across the region to move weapons across the border to rebel forces. In late April, for instance, Lebanese authorities intercepted a large shipment of weapons, including rocket-propelled grenades, en route to the rebels from Libya. The next month, they confiscated 60,000 rounds of ammunition aboard an Italian tanker in Lebanon's port city of Tripoli. The tanker had recently docked in Alexandria, Egypt, where the bullets were taken onboard. There is, of course, no way to accurately measure the volume of weapons being smuggled into Syria through the Lebanese portal, but all available indicators suggest that this is also no longer a unidirectional highway. As Terje Roed-Larsen, the U.N. special envoy to Lebanon and Syria, put it recently, "There are reasons to believe that there is a flow of arms both ways -- from Lebanon into Syria and from Syria into Lebanon."

Ultimately, the Syrian strategy of financing foreign exploits seems to have backfired. Assad's ruthless response to peaceful protests -- including laying siege to and shelling restive cities like Daraa -- alienated many Sunni extremist groups, which have a "complicated and fluid" relationship with Damascus, as Andrew Tabler of the Washington Institute for Near East Policy describes it. These groups, including Hamas and various affiliates of al Qaeda in Iraq, had been happy to accept handouts from Assad before the uprising, but were ultimately sympathetic to the largely Sunni protest movement. As a result, Tabler argues, recent months have witnessed "a disintegration of many of the regime's close connections to regional militant groups it had previously strongly backed."

Most of these organizations did not actively take up arms against Assad -- Hamas, for instance, simply downgraded its presence in Damascus and moved key officials to offices in Qatar and Egypt -- but the souring of relations has helped cement the conflict's sectarian parameters. It has also made it easier for al Qaeda to rally support across the Arab world. Indeed, just days after Khaled Meshaal, head of Hamas's political bureau, announced he was moving his office, al Qaeda chief Ayman al-Zawahiri called on his supporters to join the struggle against the Syrian regime.

Assad might be alarmed by the foreign terrorists operating in his country, but he should not be surprised by their presence. Given Syria's history of sponsoring foreign terrorist organizations, it would actually be extraordinary if none had stuck around to take advantage of the current unrest. What the uprising has revealed is a split between Sunni and Shiite extremist groups: Hezbollah remains a stalwart ally of Syria while Hamas has distanced itself and al Qaeda is attempting to hijack the opposition. As always, there do appear to be exceptions; Palestinian Islamic Jihad is the lone Sunni holdout in the Assad camp, possibly because it stands to gain additional resources from Damascus now that its list of allies is getting shorter. At the end of the day, however, Assad is learning the dangers of doing business with groups whose interests only temporarily overlapped with his own. But if the Syrian president looks like "The Boy Who Cried Wolf," it is Aesop's fable about the frog who trusted the scorpion that best captures the moral of this story.