As France wonders if its new prime minister, Sébastien Lecornu, can cobble together a government coalition and squeeze through next year’s budget, debate is raging over soaring economic inequality — and the tax system that’s contributing to it.
Lecornu’s predecessor, François Bayrou, was toppled in September over a series of belt-tightening proposals widely accused of clobbering the middle and working class while giving a free pass to the superrich. Now, with centrist Lecornu in talks with the center-left Parti Socialiste to secure its backing, one of the Left’s flagship proposals — a new wealth tax targeting France’s largest fortunes — has suddenly gained traction.
The Zucman tax — so named after Gabriel Zucman, the left-leaning economist who devised it — is a top-up levy that would ensure that those with assets worth more than €100 million pay at least 2 percent of their wealth in taxes every year.
It aims to tackle what many see as a serious flaw in the French tax system: the biggest fortunes are largely made of company shares and by accumulating dividends that are stored in holding companies, and are therefore subjected to corporate tax but not to the much higher rates of the personal-income tax. Studies show that once corporate revenues are taken into account, the French tax system stops being progressive for the top 0.1 percent richest people, who pay a lower effective rate than those just below them in the pyramid.
Unsurprisingly, in recent decades France’s biggest fortunes have ballooned at head-spinning pace. Since 1996, the total net worth of the country’s 500 richest people has grown fourteen-fold, also increasing from 6 to 40 percent of GDP. Between 2010 and 2025 alone, it has skyrocketed from €200…
Auteur: Michele Barbero
