FRANCE: France Proposes New Tax Targeting Ultra-High Net Worth Individuals

The proposed tax aims to address national debt and increase revenue from the wealthiest citizens.
The French government is taking significant steps to address its mounting national debt, projected to soar beyond 3,200 billion euros, by considering the implementation of a new tax aimed at ultra-high net worth individuals. This proposal, led by Amélie de Montchalin, the Minister of Public Accounts, is part of broader efforts to increase fiscal revenues and combat tax avoidance among the wealthiest segments of society.

On February 19, 2025, during interviews and discussions around the proposed tax, Montchalin revealed the concept of the “minimal differential tax”. This tax would require households possessing wealth over 1.3 million euros to contribute at least 0.5% of their total wealth through existing taxation routes, ensuring they pay their fair share alongside income taxes, exceptional contributions for high earners, and wealth taxes.

The sensitive nature of tax discussions is underscored by public opinion. Survey findings released on October 24, indicated by Odoxa for Challenges magazine, showed 64% of French respondents feel burdened by their taxes. At the same time, there is considerable support for targeting the wealthy, with approximately 88% favoring increased taxes on households earning more than 500,000 euros annually. This reflects widespread recognition of the difficulties faced by many lower and middle-income households, accentuated by recent inflation which has diminished purchasing power.

Despite the political challenge posed by implementing such taxation, Montchalin emphasized the importance of ensuring the wealthy contribute appropriately. “We must make sure the sum of taxes already paid is at least equal to 0.5% of the wealth,” she stated, signaling the government’s ambition to hold affluent taxpayers accountable. Nonetheless, the proposal has drawn criticisms from various political factions, particularly the Ecologist group, which argues the measures fall short of what is necessary to effectively address income and wealth inequalities.

Gabriel Zucman, an influential economist known for his research on wealth taxation, supports heavier taxation measures for the ultra-rich, emphasizing the need to close loopholes and prevent the wealth from exiting the country as tax burdens increase. The debate has intensified around the proposed exemption of professional assets from this tax, which some lawmakers argue would undermine the tax’s intended effect. Montchalin defended this stance, cautioning against policies which could see the wealthiest individuals emigrATING due to high taxation, stating, “This would mean taking 25 billion euros from 2,000 taxpayers,” potentially prompting them to leave France.

The complexity of this situation highlights the balancing act the government faces: raise necessary revenues without driving away high-caliber talent and investments. Economic experts and politicians remain divided over the best path forward. While there is notable public support for the proposed measures, the question persists about how effectively they will address the deep issues of taxation equity, economic growth, and the sustainability of social services.

For many French citizens, the prospect of significant changes to their tax obligations could bring both concern and hope, depending on their economic circumstances. The conversation around this proposed tax opens avenues for broader discussions about fiscal responsibility and equitable treatment across different income levels.

The government is set to continue refining its proposals, weighing public sentiment alongside practical economic consequences. Observers from various sectors will be carefully monitoring how these discussions evolve and what eventual policies might emerge from these high-stakes deliberations.