Pigeons, Taxes and \'Startuppeurs\'

PARIS - So how did a flock of pigeons-a French slang word adopted by a group of startup entrepreneurs who don't want to be fall guys for the government's efforts to plug its budget gap-manage to shift the debate in France over an increase in the tax on capital gains?

The answer, according to the movement's spokesman, Jean-David Chamboredon, lies in their approach, which broke the traditional mold of French political discourse.

First they put their protest up on Facebook, instead of taking to the streets. Within 15 days, they had 67,000 “likes,” many posted by French entrepreneurs outraged at proposed tax legislation that for certain top-end investors, would increase their liability on capital gains from 34.5 percent to 63.5 percent.

Secondly, these cool, irreverent “startuppeurs”- a coinage used among French internet investors -have softened the image of the fat capitalist patron, which historically, has been the cartoon-like cliché which many French people love to hate.

Within days of their Sept. 28 launch, the pigeons had managed to win a partial rollback of the government's tax plan, the subject of my Page Two column. The legislation heading to the National Assembly now exempts capital earned by active founders from the sale of their companies.

But the entrepreneurs are not satisfied, saying that the French startup companies will be fatally wounded by “brutal” measures that would deprive them of venture capital. “If you tell people that they have one in two chances to lose money, but if they earn money, they will be taxed at 60 percent, there's absolutely no reason to invest,” said Mr. Chamboredon, who heads the Paris-based investment firm ISAI.

The pigeons have also galvanized the patrons into signing a joint statement, issued last Tuesday by a dozen business organizations, declaring an “entrepreneurial state of emergency,” and calling on the government to redraft its capital gains tax package.

Mr. Chamboredon argues that the pigeon protest has upended the usual sequence of French politics, which typically begins with discreet consultations and later erupts in the street. This time, he said, the protests-held peacefully on the internet-have kick-started a national discussion.

But a question remains: Will the pigeons take flight? Already, the French press has become obsessed with tracking the migration of rich people-from business tycoons to movie actors-who, it is thought, are moving to Belgium or elsewhere, fleeing the government's heavy-handed tax policies.

“I know a lot of people who are spending a lot of time these days with their tax lawyers,” said Mr. Chamboredon. “If you have a company and you know you will have to sell it, you need to think about it and exiting France is a scenario.”
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