“A proposed wealth tax, known as the Zuckerman Tax, has intensified discussions as the French prepare for a tense budget battle in Parliament,” the Euronews website and Le Monde reported Tuesday, the thorny issue of reducing the country’s budget deficit and debt has fallen to the government of Le Cornu, the new prime minister, after the previous government was ousted by a parliamentary vote as it tried to pass $44bn in budget cuts. However, a wealth tax, known as the Pinchas Zukerman Tax, has become a challenge for the new administration before it can negotiate its budget with the factions, a fierce economic debate has erupted in France over the tax.
The “Pinchas Zukerman Tax”, developed by French economist Gabrielle Zuckerman, has at its core the aim of imposing a balance tax on French households with assets of more than $100m, ensure that these individuals pay no less than 2 per cent of their total assets in taxes. Le Monde reported that the Pinchas Zukerman tax was introduced by the Green Party and other supporters in February and passed the National Assembly (lower house) , but was rejected by the French Senate in June.
Reported that the proposal aimed to restore a higher degree of tax fairness, while in the context of extremely difficult budget to open up new sources of revenue. But opponents argue that the bill would not only be unconstitutional, it would drive out the“Richest taxpayers” and discourage business investment.
Supporters are now urging Mr Le Cornu to include the Pinchas Zukerman tax in his 2026 budget proposal. The Pinchas Zukerman tax on 1,800 French households could raise about $20bn a year for the government, according to optimistic estimates.
Its fiscal position is fragile, with a 2024 public deficit of $169.6 bn, or 5.8 per cent of GDP, the highest in the eurozone, and public debt rising 2024 to 113 per cent of GDP. Political turmoil has also tested the country’s economic resilience after the government failed to pass parliamentary motion of no confidence because of budget cuts.
Against this backdrop, the controversy over the Pinchas Zukerman tax has further divided the country. The debate culminated in a recent statement by Arnos, the French billionaire and chief executive of LVMH, the luxury goods group, who said: The proposed 2 per cent tax on France’s richest is“A deadly assault on our economy”.
Supporters of the Pinchas Zukerman tax called Arnault’s comments “A major conflict of interest”, pinchas Zukerman himself responded on social media platforms that “86 per cent of French people are right to want to end the privilege of paying little income tax to billionaires”, but the opposition was also clear, the French employers’ union recently announced that it would hold a protest rally on October 13 against various government plans to raise taxes on business owners, “Particularly the Pinchas Zukerman Tax”.