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France's Culture Tax And The Cult Of Exception

Politics / France Dec 29, 2013 - 12:14 PM GMT

By: Andrew_McKillop


Although he makes a point of not living in France and denies he does that to avoid taxes, Depardieu is an ikon for French films and the business needs money. Why it needs money is already political – since many in France say the film industry should not be subsidized – and is already complicated because film theaters and some movie and TV producers pay taxes to the government, while they and others can also receive huge grants, aid and tax rebates from the same government.

The porkbarrel is France's “cultural exception” and is certainly not going away. Hollande's government wants to increase it “to save French culture and national identity”. Or maybe only to raise taxes.

The so-called culture tax can in some cases pay Gerard Depardieu as much as a half million euros part-funding for his film fees, and totals more than €1.3 billion annually. At present it is paid by movie theaters showing non-French films, broadcasters, publishers, and some Internet service providers. The government agency handling the State's intervention in and control over films, TV, books, recorded music and other “cultural items” - the CSA – now says that any web site enabling users to look at or download video, like Facebook, YouTube and its French small-size copy DailyMotion should also be paying tax.  More radically, some members of Francois Hollande's PS government say that anybody using a smartphone, tablet or PC can potentially download videos or films, and watch French TV without paying a license fee, and so they must also pay the “culture tax”.

Called a separate measure by the PS government, it is actively considering the creation and levy of a new tax on smartphones, PCs and tablets in a bid to raise “about one hundred million” euros a year to support the creation of digital cultural content inside France. The proposal was handed to President Francois Hollande this summer, with a target tax of 1%, possibly rising to 4% on the sale of any Internet-compatible device, and a tax on companies such as Google, Apple and Amazon. Since then, the new culture tax has swum low in the news media, after receiving heavy criticism from industry professionals and many politicians.

Depardieu himself waded into the fray this summer. Before accepting Russian citizenship from Putin in person he said he was quitting France not to avoid taxes, but because Hollande personally insulted him, calling him “a nothing” (un minable), and because Hollande has turned the country into “a sad place”. Plenty of commentators mocked Depardieu's line that “it wasn't about taxes” but they also attack Hollande's fantastic tax creating binge. The new culture tax is just one of 80 proposals made in a report to him - only concerning  France's so-called “exception culturelle” - or the survival of its supposedly distinctive culture. Dozens of other taxes and legal barriers to “Anglosaxon culture” were also mooted in the report.  The report was written by Hollande's longtime ally in the media, Pierre Lescure, the former head of cable television channel Canal Plus and fully airs the French paranoia and sense of inferiority in a world dominated by the English language and the Internet. Delving into new ways to fight Anglosaxon culture, the proposals included a special tax on hard drive disc sizes, their memory capacity which can be used (oh gosh!) to store non-French cultural items.

The money raised by the new taxes which may include a further tax rise on movie theaters showing non-French films – despite this running against World Trade Organization rules on fair trade – would theoretically be channeled through the CSA and other government agencies to fund specially decided, government-sponsored “cultural activities”. One of these aids, the report said, would go to helping young French musicians cobble together their ersatz “French rap music”, and protect French video game makers who lose revenues on their gory junk due to free streaming or downloading of rival products from “Anglosaxon” internet sites, which give unfair support to “Anglosaxon culture”.

Existing measures to fight Anglosaxon culture are stamped with French eccentricity. The TRIP (Tax rebate for international production) supports foreign film companies whose projects are completely or partly made in France - or which include sets or elements related to French culture, heritage, or French territory. To pass muster and receive the rebate handed down by the Film France National Commission, which heads a total of 40 commissions only in the film sector, film makers have to pass a Cultural Test. The TRIP test assesses the “French relativity of the story, locations, characters, sources, landmarks, creators, crew and the film's technical hubs” (end of citation). As of Sept 2013, these rebates can attain $13 million for a single film.

The rebate commissions have outright power to decide who gets the money – and they can operate retroactively for films made before 2011, if their expert analysts decide that really, and in fact, that unheard-of film or TV series made in China, Russia or the US, or in Gabon, Germany or Norway 3 years ago, did have French Cultural Content. Accusations of porkbarrel under-the-table kickbacks by the commissions are rife in the film and TV business.

France's cultural exception is regularly criticized as badly-disguised trade protectionism. The question was raised again by dispute surrounding the US-EU trade talks in 2013. The French government insisted that cultural products, particularly film and television, should be left out of the negotiations due to their special status “as timeless acts of artistic creation”. Hollande's government, true to its PS origins, cites the actions taken during the 14-year PS presidency of Francois Mitterand, who in 1993 was prepared to boycott the GATT (later WTO) process of trade and tariff reductions.  He said at the time: “Creations of the spirit are not commodities. Elements of culture are not pure business. Defending the pluralism of works of our duty”. The duty of France is to force French audiences to watch French-made content, protect its film, TV and music business, and levy a tax on Google, Amazon and even on PC hard drives, by claiming this is the way to prevent French society “from being enslaved”.

French policy has radically hardened since the 1990s, when its own attempts at creating a Google-equivalent failed. Largely protectionist to start with, it now has a policy aimed at “saving French identity” while encouraging every form of “non Anglosaxon” cultural diversity in the world – by handing huge tax rebates to foreign film and TV producers who show a camembert cheese at key moments in their product! As early as year 2000, the new French cultural policy was defined by then-minister for culture, Parti Socialiste mandarin Catherine Trautmann, who claimed France must promote “world cultural diversity”, because this can unite nations large and small, old and new, developed and otherwise. Inside France, the new laws, taxes, grants and aid to “French culture” are seen as a way to decentralize power from Paris, encourage creativity, and even prevent young people from leaving the country en masse – opinion polls show that 50% of French university students intend emigrating the moment they get their diploma.

France needs to levy new and more taxes on anything to which the word “culture” can be attached because it deploys the world's largest number of cultural agencies and associations of any nation, big or small. Staffing costs for these are treated as “sensitive” or even “confidential” by the government. All imaginable domains are covered, from films, books and TV to fine arts, gastronomy, furniture making, clothes, horseracing and jewelry. The net costs are claimed as  heavily outclassed by the receipts from tourists coming to France – who supposedly also come to see French films, or even horses!

All the evidence suggests that the élites running France are in no way satisfied with the status of their country in the world, its standing, prestige or ‘soft cultural power’.

This obsession is a hand-me-down from long before Mitterand's long reign. France likes to imagine it is ‘a great power promised an exceptional destiny,” but nobody seems to notice this outside the country! Remarked by Gerard Depardieu when he was called “a nothing” by the State, its culture tax directly subsidizes the national crisis atmosphere of “a sad country in mourning”. The tax has sponsored dozens of TV films and series on the theme of treacherous Vichy France, the collaborators, and France's so-heroic resistance to Nazi domination. This obsessional and false remake of history – called propaganda in other countries -  is rejected by almost all young French, with polls saying that over 40% never watch State TV at all, but the mournful and luxury-budget TV series are shown on all five State-owned TV channels. They peddle a defeatist aura of disillusion and what historian Christophe Prochasson calls a French refusal “to imagine tomorrows that sing”. Instead, their TV tomorrows moan and sulk.

The real “French exception” is revealed by opinion polls showing the French are the most pessimistic nation in Europe – even beating the crisis-riddled PIIGS! Historians trace this ultimately to a shared fear with many Americans – that their 18th century revolutionary ideology of Universalism does not work, in today's world. They are outclassed and outpaced by real world history.

French soft power has been obsessionally developed and protected in the domain of ideology. Among French elites if nowhere else, the cult of ‘exceptional destiny’ is reserved, only for them. Like any other claim to exceptional and special status however, this is firstly divisive and secondly needs to be proved – otherwise it is just an egotrippers game to provoke national envy and jealousy.

De Gaulle can be credited, or blamed with launching the soft power onslaught of today, which in his times especially targeted the US. Showing the critical lack of imagination in French elite minds, the theme of “US Hyperpower” and how France must counter it, today still remains a driver of its often pathetic attempts at creating ersatz French versions of things like American rap music or Men in Black video games – the worst is the best! Any French cultural product will prove it.

Finally, the French elite always retreats into its paranoid laager. It claims that because the world doesn’t speak French and is not impressed by camembert cheese, unless it is pasteurized, this is “an irrational obstacle to global progress”. It goes on to claim that with plenty of taxes and crowds of bureaucrats, France will correct this betrayal of History and insult to Humanity – “si Dieu le veut’.

By Andrew McKillop


Former chief policy analyst, Division A Policy, DG XVII Energy, European Commission. Andrew McKillop Biographic Highlights

Co-author 'The Doomsday Machine', Palgrave Macmillan USA, 2012

Andrew McKillop has more than 30 years experience in the energy, economic and finance domains. Trained at London UK’s University College, he has had specially long experience of energy policy, project administration and the development and financing of alternate energy. This included his role of in-house Expert on Policy and Programming at the DG XVII-Energy of the European Commission, Director of Information of the OAPEC technology transfer subsidiary, AREC and researcher for UN agencies including the ILO.

© 2013 Copyright Andrew McKillop - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisor.

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