Europe Debates Controversial Zucman Tax on Ultra-Rich to Boost National Budgets

France Debates the "Zucman Tax" on Ultra-Rich Wealth

A heated debate is unfolding in France regarding the proposed "Zucman tax," which aims to impose a minimum 2% tax on wealth exceeding €100 million, in addition to existing income tax. This measure would affect approximately 1,800 of the wealthiest French citizens and is part of a broader European discussion about the financial contributions of the ultra-rich to national budgets.

The Push for Tax Fairness

Proponents of the "Zucman tax" argue it represents a crucial step toward tax fairness, especially as the EU faces growing pressure to increase investments in security and defense. Giulia Varaschin of the EU Tax Observatory notes the proposal's widespread popularity, stating, "It is a very popular measure, not only among citizens but across the political spectrum."

Gabriel Zucman's Perspective

Gabriel Zucman, a French economist and the originator of the tax proposal, advocates for a global minimum wealth tax to combat the low taxation rates of the wealthiest individuals. His calculations suggest that France could generate roughly €20 billion from this tax, while the EU as a whole could receive approximately €67 billion. Varaschin emphasizes the alternative to taxing the wealthy, stating, "When it comes to filling the budget, there are two options: cutting social benefits, pensions and healthcare, or taxing those who currently pay almost nothing."

Concerns and Criticisms

Opponents caution that the proposed tax would extend beyond billionaires, potentially affecting entrepreneurs and family businesses. Mikael Petitjean, chief economist at Waterloo Asset Management and professor at the Catholic University of Louvain, expresses doubts about the revenue estimates, suggesting the actual collection could be significantly lower or even negligible. He believes individuals will adapt and utilize strategies to avoid the tax.

Wealth Taxes in Europe

Currently, only Spain within the EU has implemented a "solidarity tax" on wealth exceeding three million euros. Norway and Switzerland also tax assets. In the United Kingdom, discussions are ongoing regarding a 2% tax on wealth above 10 million pounds. Data indicates that the 500 wealthiest French individuals have significantly increased their share of GDP from 6% to 42% over the past 30 years.

Wealth Tax Implementations Across Europe