France’s Proposed Wealth Tax on Ultra-Rich Moves Forward

French lawmakers have taken a significant step toward implementing a new wealth tax, known as the "Zucman tax," aimed at the nation's ultra-rich. The tax proposal, put forward by the Ecologist Party and supported by green and left-wing Members of Parliament (MPs), seeks to levy a 2% tax on individuals with assets exceeding €100 million. The National Assembly adopted the measure by a vote of 116 to 39 and is now expected to pass through the Senate.

Proponents of the tax, named after economist Gabriel Zucman, argue that it could generate between €15 and €25 billion annually. They believe it will help address inequality in France by targeting the wealthiest 0.01% of citizens. The tax would affect approximately 4,000 individuals and apply mainly to real estate assets, similar to the current Impôt sur la Fortune Immobilière (IFI), which replaced the previous ISF wealth levy in 2018.

Éva Sas, a lawmaker from the Ecologist Party, emphasized the significance of this legislative move.

"Tax immunity for billionaires is over." – Éva Sas, lawmaker of the Ecologist party.

Despite its support within certain political circles, the proposal has sparked concerns about its potential economic ramifications. Critics fear that imposing such a tax could negatively impact investment, business expansion, and job creation. Budget Minister Amélie de Montchalin has openly criticized the proposal, deeming it "confiscatory and ineffective."

The current French administration, led by President Emmanuel Macron, has sought to encourage business growth by reducing corporate tax rates and streamlining hiring and firing processes for firms. This approach contrasts with the proposed wealth tax, which some believe could deter affluent individuals from investing in the country.

The debate surrounding the wealth tax underscores a broader dialogue on social equity and economic policy within France. While supporters view it as a necessary tool for reducing disparities, opponents warn of its possible unintended consequences on the nation's economic landscape.