October 2, 2025

France Under Fire: PM Under Wealth Tax Pressure, the World Watching

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France is once again in the crosshairs of the wealth tax debate. New Prime Minister Sébastien Lecornu finds himself squeezed by left-wing lawmakers and public pressure to adopt a bold “Zucman tax” on the ultra-rich, even as he publicly resists calls for a sweeping tax on wealth. Bloomberg recently reported that Lecornu “has left the door open to measures that could affect the richest, but has criticized calls for a broad-based wealth tax.”

Lecornu's position was more definitive in a Reuters interview: he ruled out reintroducing a general wealth tax and said he would stick to the goal of cutting France’s budget deficit to 4.7% of GDP in 2026. Yet, political reality may force compromises. To pass a budget, he needs the support of the Socialist Party, which demands a new 2% levy on fortunes above €100 million (about $117 million) — the so-called “Zucman tax.”

The proposal enjoys overwhelming popular support. An IFOP poll showed 86% of French voters back a wealth tax on the richest households. Socialist lawmakers have already passed versions of this tax in the lower house (Assemblée), only to see them blocked in the Senate.

What Is the “Zucman Tax”?

Named after economist Gabriel Zucman (a vocal critic of tax avoidance by the super-rich), the proposal is relatively precise: a 2% annual levy on net wealth above €100 million (or higher thresholds) and a requirement ensuring that extremely wealthy households pay at least that rate. Proponents argue it would plug holes in public finances and restore fiscal fairness, given evidence that many billionaires pay lower effective tax rates than middle-income citizens.

As one might anticipate, though, critics are vocal. Bernard Arnault, CEO of luxury conglomerate LVMH and France’s richest man, lambasted the plan as punitive and ideological: “This is clearly not a technical or economic debate, but rather a clearly stated desire to destroy the French economy,” Arnault told The Sunday Times.

He labeled Zucman a “far-left activist” and claimed the tax would deter investment. Zucman, in turn, pushed back, saying his work is grounded in economic research, not politics.

Will It Work or Backfire?

Wealth taxes have a checkered past. Direct net wealth levies are difficult to enforce, prone to legal challenge, and can spark capital flight— especially in open, mobile economies. A Reuters analysis noted that many European governments instead favor alternatives: tougher capital gains taxation, higher inheritance taxes, or exit taxes.

In France itself, the previous ISF (Impôt de solidarité sur la fortune) targeted high-net-worth individuals, but over time was narrowed and ultimately abolished in 2017, replaced by a real-estate–only “IFI. ”ISF critics said many wealthy people simply left or shifted assets abroad.

Economists warn the Zucman tax may yield less revenue in real life than political rhetoric suggests. Some estimates peg potential collections at €20 billion annually from ~1,800 households; others more soberly put that at€5 billion after evasion, exemptions, and legal barriers.

One commentary in Bloomberg Opinion critiqued the plan as “voodoo economics,” noting that while politically popular, it risks unintended consequences for France’s fragile economy.

What This Means Beyond France

France’s debate mirrors conversations elsewhere. Countries like Spain, Switzerland, and Norway maintain some version of wealth taxes, though with varying success and scope. Meanwhile, the global policy community is discussing a global minimum tax on billionaires (a 2% floor), an idea partly inspired by Zucman’s work and currently floated in G20 / EU debates. In the U.S., proposals like the Ultra-Millionaire Tax Act would impose rates on wealth above $50 million tiers — though these ideas remain politically fingered and legally untested.

Culturally and politically, taxing wealth taps directly into narratives of fairness, merit, and social contract. In France, calls of “tax the rich” echo past movements like the Yellow Vests protests, pushing citizens to demand that those at the top contribute more.

If a French wealth tax is blocked or watered down, it may reinforce skepticism in other nations considering similar steps. On the other hand, if even a semi-successful version passes, it could embolden tax policymakers globally who want to confront inequality through fiscal tools rather than rhetoric.

Final Thoughts & Takeaways

Lecornu is stuck. He needs Socialist support to pass a budget yet has promised not to reintroduce a sweeping wealth tax.
The Zucman tax illustrates central friction in tax policymaking: high public support vs. institutional resistance and economic risk.
Wealth taxation is hard to get right. Global precedents show that direct levies either fail or need heavy carve-outs to stay viable.
France is a live laboratory. Its outcome could influence U.S., EU, and global debates over inequality, tax design, and the balance between fairness and growth.

In short, France’s new PM is under fire from all sides, but it remains to be seen if any wealth tax can survive geopolitical reality.