Authored by Mike Shedlock via mishtalk,
Economist Gabriel Zucman proposes a 2% tax on French residents with over 100 million euros in assets.
Better France Than Here
The Wall Street Journal reports Wealth Tax Stages Comeback in France
France’s slide into political and fiscal dysfunction is generating a groundswell of support for a sweeping wealth tax that would represent a radical break from the pro-business agenda of President Emmanuel Macron.
The proposal is the work of French economist Gabriel Zucman, a former adviser to U.S. Sens. Bernie Sanders and Elizabeth Warren. He wants to impose a 2% tax on the assets of people with net wealth of 100 million euros, equivalent to $118 million, or more.
Macron and his center-right allies have long dismissed the idea of a wealth tax as a “soak-the-rich” relic of France’s socialist past. France’s business leaders have objected to Zucman’s proposal, including Bernard Arnault, the chief executive of French luxury giant LVMH, who said it would be “deadly for our economy.” Some economists say the tax could hurt investment and economic growth.
With Macron’s government scrounging for billions in cost-savings to rein in its budget deficit, however, Zucman has seized the moment to demand a contribution from France’s billionaires and centimillionaires as a matter of “fiscal justice.”
Much of the country backs the economist. A recent Ifop poll shows that 86% of respondents support the Zucman tax, including 75% of voters for Marine Le Pen’s far-right National Rally party and 92% of Macron’s supporters.
The strong public support is notable in a country where voters agree on little else. The National Assembly is deeply fractured between Macron’s ranks—who typically oppose any tax increases—and lawmakers on the far-right and far-left who want to maintain or even expand public spending levels. The gridlock has depleted France’s finances, driving up its borrowing costs and transforming every budget vote into a referendum on the government.
Suddenly, there is talk of “fiscal justice” everywhere. The governor of the Bank of France recently said “some measures of anti-fiscal optimization on big fortunes would be justified. For the belt-tightening to feel acceptable it has to feel just.”
When a half-million protesters poured onto city streets across France last week, many carried placards that read: “Yes to the Zucman tax: billionaires pay up.”
“I think that if France adopts it, we would greatly increase our chances of it becoming European fairly quickly and, ultimately, global,” Zucman said.
This could get interesting. I await the flight of the wealthy from France.
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