France Considers 2% Wealth Tax on Billionaires

France is once again considering the reintroduction of a wealth tax, targeting individuals with net assets exceeding 100 million euros. This proposal, championed by economist Gabriel Zucman, aims to impose a 2% tax rate on the wealthiest segment of the population, symbolizing fiscal fairness.

President Macron and the center-right coalition have long opposed the wealth tax, viewing it as an outdated relic of "robbing the rich to feed the poor." The business community, particularly the heads of major corporations, has strongly opposed the measure, with the CEO of LVMH warning that it could be "fatal" to the French economy. Some economists also express concern that such a tax could weaken investment and growth.

Despite these objections, Zucman's proposal has garnered widespread public support, particularly in the face of mounting fiscal pressures. A recent survey indicated that 86% of French citizens support the wealth tax, including 75% of far-right voters and 92% of Macron's supporters. Last week, half a million protesters took to the streets across France, holding signs that read "Support Zucman Tax, Billionaires Pay Taxes."

Zucman estimates that this tax could generate an additional 20 billion euros in annual revenue, with the four wealthiest families in France alone contributing approximately 9 billion euros per year. However, critics argue that the tax would be difficult to enforce, as the wealthy could potentially avoid it through asset restructuring. Historically, France introduced a wealth tax in 1981, which was later abolished by Macron in 2017, earning him the criticism of being the "president of the rich."

Currently, the new Prime Minister, Elisabeth Borne, has indicated during the budget formulation process that the affluent should contribute more to bridging the fiscal gap. However, she emphasized the need to handle assets related to employment and economic growth with caution.

Zucman hopes to extend this model across Europe and potentially globally. He stated, "If France leads the way, it could inspire Europe and possibly the rest of the world to follow suit."