21-02-2025
French parliament approves flat tax on the 'super rich'
On Thursday, February 20th, a bill to introduce a minimum tax of two percent on the assets of the ultra-rich passed its first reading in France's Assemblée nationale by 116 votes to 39, after more than seven hours of debate.
The bill was introduced by the French Green party, on a parliamentary day that allows bills to be presented by smaller parties.
It would "put an end to a fiscal injustice that has lasted for too long', according to Écologiste et Social MP Eva Sas. The vote, she said, sent an important signal that, 'the tax immunity of billionaires is over'.
Who's affected?
The bill would create, from January 1st, 2026, a minimum tax – a tax floor, known as an Impôt Plancher sur la Fortune (IPF), of two percent of the value of assets in income and wealth taxes for anyone worth €100 million or more.
There are about 4,000 households in France who are worth that much (and remember that you're taxed as a household in France). Of those, some already pay the equivalent of two percent of their wealth in taxes and social charges. It's only those whose tax payments don't reach that two percent minimum who would be affected.
The calculation of the value of their assets takes into account, 'all of their assets, whether located in France or abroad', as well as those who are not domiciled for tax purposes in France, but whose assets are partly located in the country.
The bill would, its supporters say, bring in between €15 billion and €25 billion in revenue to the State.
That's … interesting
It's become known as the Zucman tax, after French economist Gabriel Zucman, director of the EU Tax Observatory.
He argued for the establishment of a coordinated tax of two percent on the assets of billionaires in a report for the G20 in June 2024.
Spain, South Africa, Germany, Belgium and France have leaned in towards the idea, Le Monde reported in June, but no country has yet adopted it, with Le Monde adding, 'this global minimum tax has little chance of succeeding quickly'.
Will it become law in France?
Frankly, its chances of making it on to France's statute books look remote at this stage.
It has taken the first step in a long and convoluted legislative process. The text will now move to the traditionally more right-leaning Senate, who will probably demand that it is watered it down somewhat.
The government, meanwhile, is not a fan.
In an interview with Franceinfo, Minister of Labour and Employment Astrid Panosyan-Bouvet indicated that she would have preferred the Assembly to wait for a bill due to be presented in May, though she acknowledged that, 'the debate does raise something that is objectively appalling', when some ultra-rich people in France, 'have a lower effective tax rate than nurses, firefighters or workers of modest means'.
But, she said the Ecologists' bill was 'a very bad idea that will miss its target'.
And, during the debate, Minister for Public Accounts, Amélie de Montchalin said: 'It's not that we're fighting the principle,' but the measure 'must be coordinated at the European and international level, and hit its target'.
So, the rich won't have to pay any more?
The government had already stated its intention to introduce a tax to counter so-called 'tax optimisation' by the wealthiest individuals, which should not exceed a rate of 0.5 percent and would exclude business assets.
Meanwhile, the recently-passed 2025 budget includes a contribution différentielle sur les hauts revenus (CDHR) that targets those with an individual income of €250,000, or €500,000 per couple. This measure, which is restricted to 2025, is expected to bring in an additional €2 billion to the state coffers.
In addition, the 2025 budget has approved a temporary corporate tax surcharge, which will affect several hundred of the wealthiest French companies and is expected to, bring in some €8 billion to state coffers.
