French government under pressure as lawmakers set to vote on wealth tax

PARIS: French lawmakers were due on Saturday to vote on a wealth tax, after a swing group threatened to topple the government if the levy was not added in next year’s austerity budget.

France is under pressure to pass a spending bill by an end-of-year deadline to rein in its deficit and soaring debt, but efforts have been hampered by a political crisis.

The country’s third prime minister in a little over a year, Sebastien Lecornu has promised to get the job done, after the legislature ousted his two predecessors over cost-cutting measures.

Lecornu survived a confidence vote earlier this month by agreeing to suspend a deeply unpopular pensions reform under pressure from the left-wing Socialists.

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But the Socialists, a swing group in parliament, have also demanded a tax on the uber-wealthy, without which they have threatened to topple his government as soon as Monday.

They originally requested a levy, named after French economist Gabriel Zucman, who hoped to raise around 20 billion euros ($27 billion) per year from just 1,800 wealthy households.

Zucman’s proposal was to make people with at least 100 million euros in assets pay a minimum tax of two percent on that wealth.

But the far right and Lecornu’s government are against taxing professional assets, which this levy would target.

The government instead wants to tax wealth management holdings with at least five million euros in assets.

The Socialists have now suggested a minimum three-percent tax on assets of 10 million euros and above, but excluded family and “innovative” businesses in what they hope is a concession to the government.

Their proposal is to be debated in parliament on Saturday.

As lawmakers set to work, Zucman warned the Socialists not to compromise on his original proposal.

Creating a tax “riddled with loopholes, offering opportunities for evasion… is condemning oneself to failure”, he told France Inter radio.

France has been mired in political deadlock since President Emmanuel Macron last year called for snap parliamentary elections, hoping to cement his power.

His centrist bloc instead lost its majority and the far right gained seats, and the parliament ended up divided.