France's Techies Flap their Wings at Tax Increases With Online "Pigeons" Protest
BY Karim Lebhour | Friday, October 26 2012
They call themselves “Les Pigeons” — in French, “pigeon” is slang for “suckers,” easily fooled and easily abused. The name was adopted by a group of young Internet entrepreneurs who at the beginning of October launched an online campaign in protest of the government's planned tax hike, which they said would hurt small companies like startups. Prominent French bloggers like The Liberal Parisian and Kelblog published posts in support of les pigeons while the Twitter hashtag #GEONPi trended and the campaign caught the attention of the mainstream media. In a practically unprecedented instance of a social media campaign affecting government policy in France, les pigeons were successful: President François Hollande’s government rolled back its planned tax hike.
The campaign began with an opinion piece published on September 28 in the French business daily La Tribune by venture capitalist Jean-David Chamboredon, the leader of an IT investors' lobbying group called France Digitale. Chamboredon accused the newly elected socialist government of "almost sadistic discouragement" and of "crushing dreams" by nearly doubling the tax rate on capital gains generated from selling a business. He argued that the move would erode interest in creating new companies and drive start-ups away.
This article would have gone unnoticed had it not been for a dedicated Facebook page, introduced on September 28 by the founders of young internet start-ups such as Whoozer and Yopps to share their indignation. The page soon had 72,000 followers, while Twitter users replaced their profile picture with a pigeon, recalls Olivier Mathiot, the movement’s spokesman, co-founder and marketing director at PriceMinister.
"I was stunned by the snowball effect!" said Mathiot, adding "It was completely spontaneous. People invited their friends to join the pigeons’ page and the numbers grew exponentially. Twitter users fuelled the debate and propelled the movement. We received dizzying media exposure."
French entrepreneurs had been calling on the government for months to stop plans that would increase their tax burden. President François Hollande campaigned on the idea of “social justice,” promising to raise taxes on big companies and the wealthy. The socialist president vowed that capital gains should be taxed as much as revenues. Under this new fiscal policy, entrepreneurs selling their companies would, in some cases, be obliged to pay up to 60 percent in various taxes on the benefits of the sale, jacked up from the previous 32 percent. The government also introduced a 75 percent tax bracket for income above €1 million ($1.29 million), which was a fairly popular measure in France. Mathiot believes this policy casts the net too wide, indiscriminately penalizing start-up owners who feel they have little in common with millionaire businessmen.
"We aren’t speculators," he emphasized. "Start-ups don’t do day trading. In France people confuse the bosses of Wall Street with the investors of Silicon Valley. I’m always amazed to see that in the U.S. people like Bill Gates or Steve Jobs enjoy huge popularity, while in France no entrepreneur is ever listed next to a popular athlete."
The buzz created by the online campaign proved to be very effective. Les Pigeons became a mainstream media phenomenan. Founders of successful French web companies like Free, Meetic and Kelkoo joined in, which increased mainstream media interest; and then Mathiot and Chamboredon were invited to meet parliamentarians. Suddenly, the government made a U-turn. “We want to tax the people living on inherited wealth, not the risk takers,” said Finance Minister Pierre Moscovi, before announcing a series of loopholes that would allow IT entrepreneurs to avoid the tax hike.
If the disapproval had come from the mega-rich alone, the French government could have ignored the protest, but once dissent from hardworking, personable young entrepreneurs began to mount there was no choice but to backtrack, says Philippe Lefébure, business analyst for Radio France Inter.
"The whole thing was a big screw-up for the government," said Lefébure. He continued, "Les pigeons totally ruined their strategy of taxing big companies while coddling small businesses. Even though in reality very few people would have been subject to the 60 percent tax rate, the growing public opposition forced them to give in."
Lefébure observed that in France, a country where the social and economic landscape is heavily dominated by traditional unions and industry lobbies, social networks have for the first time played an important role in public debate.
"As soon as Les Pigeons’ Facebook page started to trend, he explained, "Our social media editor immediately called to tell me something was going on. Representatives of the main business leaders unions had already expressed their discontent, but here was a new voice, young and sympathetic. From a PR point of view, it was a genius coup."
But the Pigeons' campaign has its detractors. An open letter in the daily Libération made the point that not all startup business leaders see themselves “as a caste of superior citizens who should benefit from favourable tax treatment." One of the authors, Benoît Thieulin, founder of the digital agency La Netscouade, compared Les Pigeons to a “French version of the Tea Party, reducing everything to the issue of taxes.”
Front page of the daily Libération, image taken from from its Twitter account
Thieulin explained, "I am glad that France is discovering the power of social networks to organize otherwise very disparate communities. This raises the question of whether traditional unions and lobbies are outdated, which is a good thing. But I also fear a tendency of some corporate lobbies to try to influence the law outside the democratic process. Budget policies are very complicated. Parliament is the appropriate forum for these discussions. Democracies are after all founded on the act of passing budgets."
Les Pigeons have already inspired copycat groups. The latest, named Les Dindons (Turkeys) — another slang word for fall guys — was launched on October 19 to protest the end of tax breaks for those employing domestic workers. But their page has gathered barely 400 followers. Les Pigeons themselves cancelled the October 7 demonstration they had planned in front of the French parliament, perhaps fearing that their virtual success in mobilizing public opinion would not translate to street action.
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