France’s National Assembly has approved the “Zucman tax,” targeting the wealth of the ultra-rich to address the growing public deficit. Inspired by economist Gabriel Zucman, the tax mandates that the wealthiest 0.01% contribute at least 2% of their fortune. Advocates argue it promotes tax fairness, while critics label it confiscatory and fear it may drive wealthy individuals abroad. Provisions are included to tax departing individuals for five years, aiming to generate 15 to 25 billion euros for public services and ecological projects.
Introduction of the Zucman Tax in France
As France grapples with an escalating public deficit, the National Assembly made a significant move by approving the “Zucman tax” late Thursday night. This newly introduced minimum tax targets the wealth of the “ultra-rich,” a measure brought forth by environmentalists aiming to tackle “fiscal injustice.” However, this initiative has faced criticism from government representatives who label it as a “confiscatory” policy.
The Details of the New Tax Legislation
Inspired by the insights of economist Gabriel Zucman, this legislation mandates that the wealthiest 0.01% of taxpayers in France contribute at least 2% of their fortune in taxes. Following the adoption of the bill, Zucman expressed his enthusiasm on social media, declaring it “an immense advance!” He believes this initiative could serve as a model for other nations.
The primary objective of this legislation is to establish a fairer tax system, as emphasized by environmental deputy Eva Sas, who authored the report. She highlighted that the “ultra-rich” currently pay significantly lower taxes compared to the average French citizen, with their tax contributions being “almost twice less.” With France’s public deficit projected to reach 6.1% of GDP in 2024—well above the 3% threshold set by Brussels—the urgency for reform is palpable.
The vote concluded with 116 in favor and 39 against, gathering support mainly from left-wing deputies. The National Rally (far-right) abstained, while the government camp showed low participation. Although the bill has passed its first reading in the Assembly, it has yet to be scheduled for discussion in the Senate, where a right and center alliance dominates, making its future uncertain.
Following the vote, Eva Sas remarked that this legislation signals an end to “the tax immunity of billionaires.” She questioned how it is justifiable for a public hospital doctor to pay more taxes proportionally than well-known billionaires like Bernard Arnault or Françoise Bettencourt.
Critics of the bill, including Minister of Public Accounts Amélie de Montchalin, argue that the proposed tax is “confiscatory and ineffective,” warning that its implementation could lead to an exodus of wealthy households and their capital from France. In response to concerns about tax evasion, the government is exploring the introduction of a “differential minimum tax” to ensure that the tax contributions of the wealthy remain substantial.
To prevent tax exile, the proposal includes a provision that would keep the wealth of the 0.01% richest individuals taxable for five years after their departure from France. This legislation aims to secure between 15 and 25 billion euros for the state, a crucial sum needed for revitalizing public services and supporting ecological initiatives.