French lawmakers reject wealth tax proposal in budget debate

PARIS – France’s Lower House on Oct 31 rejected a wealth tax proposed by the left, which has threatened to bring down the government if a levy on the super-rich is not in the budget.

France is under pressure to pass a spending Bill by the end of 2025 to rein in its deficit and soaring debt, but efforts have been hampered by a political deadlock.

A left-wing bloc made up of the Socialist, Communist and Green parties and the hard-left France Unbowed had proposed a minimum 2 per cent tax on wealth that is more than €100 million (S$150 million), dubbed the “Zucman tax” after the French economist who devised it.

But lawmakers in the National Assembly rejected the measure on the evening of Oct 31, with 228 voting against and 172 in favour.

“Your intransigence is leading you down the wrong path,” Socialist MP Boris Vallaud told France’s Prime Minister Sebastien Lecornu, who was present for the Oct 31 vote.

“Since we have been in this chamber, there has not been the slightest compromise,” he added.

Mr Lecornu expressed his “profound disagreement” with the wealth-tax proposal, insisting there was no such thing as a “miracle tax”.

The Lower House of Parliament also voted down a “Zucman-light” proposal from the Socialists. This version called for a minimum 3 per cent levy on assets of €10 million and above, excluding family and “innovative” businesses in a concession to the government.

Debate ‘not over’

The Socialists have said they will continue pushing for alternative tax justice proposals in the budget, with MP Arthur Delaporte saying the debate is “not over”.

Mr Lecornu, the country’s

third prime minister

in little over a year, has promised to get a budget through Parliament, after the legislature ousted his two predecessors over cost-cutting measures in their versions.

The French Premier survived a confidence vote earlier in October by agreeing to suspend a deeply unpopular pension reform under pressure from the Socialists.

But the Socialists, a swing group in Parliament, have also demanded a tax on the uber-wealthy, without which they have threatened to topple his government.

French economist Gabriel Zucman, 39, has said such a tax on the mega-wealthy could raise around €20 billion a year from just 1,800 households.

The far right and Mr Lecornu’s government are against taxing professional assets, which this levy would target.

Mr Laurent Wauquiez, the parliamentary leader of the conservative Republicans (LR), welcomed the Oct 31 vote, saying the tax would “kill jobs and economic activity”.

France has been mired in political deadlock since President Emmanuel Macron in 2024 called for snap parliamentary elections, hoping to cement his power.

Instead, his centrist bloc lost its majority and the far right gained seats, and the Parliament ended up divided. REUTERS