French lawmakers will vote on a proposed wealth tax on Saturday after a key swing group threatened to topple the government if the measure is omitted from next year’s austerity budget. France is under pressure to pass a spending bill by year‑end to rein in its deficit and soaring debt, but a lingering political crisis has hampered progress.
Prime Minister Sébastien Lecornu has vowed to push through the necessary legislation, following the ouster of his two predecessors over cost‑cutting measures. He recently survived a confidence vote by agreeing to suspend a deeply unpopular pensions reform that had faced resistance from the left‑wing Socialists. The Socialists, however, are also demanding a tax on the wealthiest individuals and have warned they could bring down the government as early as Monday if their demands are not met.
The proposed tax, named after French economist Gabriel Zucman, would raise about €20 billion per year from just 1,800 wealthy households by imposing a minimum 2 percent tax on assets of at least €100 million. The government opposes taxing professional assets and instead proposes to tax wealth‑management holdings with at least €5 million in assets. In an attempt at compromise, the Socialists have suggested a minimum 3‑percent tax on assets of €10 million and above, while exempting family and “innovative” businesses.
Economist Gabriel Zucman has warned that any compromise creating loopholes could facilitate evasion. France has been mired in political deadlock since President Emmanuel Macron called snap parliamentary elections last year, resulting in a divided parliament and the loss of a majority for his centrist bloc. The introduction of a wealth tax is seen as a crucial step toward addressing France’s deficit and debt issues, and the outcome of the vote will be closely watched. The government’s ability to pass the spending bill and implement the necessary reforms will have significant implications for the country’s economic stability and growth prospects.
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