PARIS, Sept 17 (Reuters) – The fate of French Prime Minister Sébastien Lecornu could hinge on one question: should France impose a wealth tax on its billionaires?
The Socialist Party is demanding a 2% levy on fortunes above €100 million as its condition for supporting the 2026 budget. With massive public backing but strong opposition from the right, the proposal—dubbed the “Zucman tax”—could either save Lecornu’s government or trigger his downfall.
Designed by French economist Gabriel Zucman, the measure would target roughly 1,800 households and could raise up to €20 billion annually, helping to shrink France’s 5.4% of GDP budget deficit—the highest in the eurozone. Zucman argues that France’s richest families pay virtually no income tax despite rapid wealth growth in recent years.
But critics, including seven leading economists writing in Le Monde, warn the tax might yield only €5 billion while sparking capital flight. Employers’ federation MEDEF has also cautioned that taxing business assets could deter investment.
Strong Public Support, Fierce Debate
An Ifop poll for the Socialist Party this month found 86% of French voters support the wealth tax, including 92% of President Emmanuel Macron’s centrist base. The measure has broad backing on the left, which passed it in the lower house earlier this year before the Senate struck it down.
Lecornu, whose survival depends on Socialist support to avoid a no-confidence vote, has signaled openness to talks but warned against penalising entrepreneurs.
Start-up leaders have voiced concern that the tax could undermine innovation. Mistral AI CEO Arthur Mensch said France must balance fairness and competitiveness, warning founders could be forced to sell shares to pay the levy. Socialists have floated exempting firms until they turn five years of profit, but Zucman insists there should be no carve-outs.
Legal Uncertainty
The proposal may also face hurdles in France’s Constitutional Council, which has previously struck down “confiscatory” taxes. Zucman, however, argues that the reform would restore the principle of equality enshrined in the 1789 Declaration of the Rights of Man: “The ultra-rich should not pay less than everyone else.”
Whether framed as fiscal justice or a threat to competitiveness, the “Zucman tax” now stands at the heart of France’s political battle—one that could decide both the government’s stability and its appAdsAdsroach to inequality.
