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French government faces threat of censure over wealth tax / Photo: Martin LELIEVRE - POOL/AFP
NYSE - LSE
French government faces threat of censure over wealth tax
A swing group in French parliament on Friday said that if a 2026 budget bill was not changed to include a tax on the supremely wealthy, it would vote down the government.
Prime Minister Sebastien Lecornu has promised to get an austerity budget through a divided parliament by the end of the year, after the legislature toppled his two predecessors over cost-cutting measures.
He earlier this month agreed to suspend an unpopular pensions reform so the Socialists could help him survive a confidence vote in parliament.
Lecornu has also pledged not to use a constitutional power to ram the budget bill into law without a vote as has been done in previous years.
But the Socialists, a swing group in the hung National Assembly, have also demanded a tax on the ultra-rich, which Lecornu has refused and not included in the draft budget.
A parliamentary commission earlier this week rejected the proposed budget 37 votes to 11, and it is to go to a debate in the lower house on Friday afternoon.
Socialist party leader Olivier Faure said his party would vote to oust Lecornu's government if no levy was imposed on the uber-wealthy.
"We need to tax the ultra-rich and mega-inheritances," he said.
"If there is no progress by Monday, it will be over," he added.
- Zucman tax -
French economist Gabriel Zucman, 38, has said such a tax on the mega-wealthy could raise around 20 billion euros ($27 billion) per year from just 1,800 households.
The idea is to make people with at least 100 million euros in assets pay a minimum tax of two percent on that wealth.
Faure gave the example of French billionaire Bernard Arnault -- one of the world's 10 wealthiest people -- whose fortune last week jumped by a staggering $19 million dollars overnight.
Arnault owns about half of LVMH, which sells luxury goods such as Louis Vuitton handbags and Dom Perignon champagne.
Parliament could discuss a proposal from the left wing to add a so-called Zucman tax on Saturday.
But the far right and government are against taxing professional assets, which this tax would target.
The government instead wants to tax wealth management holdings with at least five million euros ($5.8 million) in assets.
The government expects to be able to raise 1 billion euros ($1.1 billion) from around 10,000 taxpayers with the measure.
France has been mired in political deadlock since President Emmanuel Macron last year called for snap parliamentary polls, which he hoped would cement his power but instead ended up in his centrist bloc losing its majority and the far right gaining seats.
burs-ah/ekf/rmb
A.Ferrara--INP
