French National Assembly Debates Tighter Tax Measures on High-Income Households in 2026 Budget

The French National Assembly has commenced intense debates over the 2026 budget proposals, focusing on measures targeting wealthy households. Prime Minister Sébastien Lecornu urged for compromise and a shift in parliamentary culture amid opposition threats, marking an intense legislative session expected to extend until November 3, with a decisive vote on November 4.

Central to the discussions is the extension of the differential contribution on high incomes (CDHR), a tax imposing a minimum 20% rate on households earning above €250,000 annually. This measure, designed to raise approximately €1.5 billion in 2026, affects around 24,300 affluent Parisian families and has been met with considerable attention from legislators. The Assembly agreed on a compromise to maintain the CDHR until France’s budget deficit dips below 3% of GDP, a threshold rarely met in recent years. However, consensus remains elusive on broader proposals; notably, a universal tax aimed at combating tax havens—often referenced as the "Zucman tax"—failed by a single vote, with the Socialist party abstaining.

More than 3,500 amendments have been submitted, including initiatives from left-wing parties advocating for increased taxation of the wealthy to help reduce national debt. The contentious nature of the budget debates was further highlighted by the rejection of the revenue section after three days of deliberations in the finance committee. Additional measures under discussion include an amendment proposing social housing tenants could gain ownership after 20 years, which has sparked notable debate.

These fiscal measures arrive at a time when France faces criticism over its fiscal credibility from agencies like Moody’s, S&P, and Fitch. The government’s efforts to tighten taxation on high incomes aim to confront budgetary challenges while navigating political divisions. The forthcoming sessions will be critical in determining how these taxation reforms will evolve and their ultimate impact on France’s economic outlook and high-income taxpayers.