Nobel Economists Urge France to Implement Wealth Tax on Ultra-Rich

In an urgent call for fiscal reform, seven Nobel Prize-winning economists have advocated for the implementation of a wealth tax on France's ultra-rich. This push comes as income inequality rises and the country's poverty levels reach a 30-year high, with 15.4% of the population now living below the poverty line. The economists, including Daron Acemoglu, Paul Krugman, and Joseph Stiglitz, stress that the wealthiest individuals in France collectively control nearly 30% of the national GDP, and their current tax contributions are disproportionately low, with some paying rates as low as 0.1%.

The proposed minimum wealth tax, known as the Zucman tax, could generate over 20 billion euros annually, aiding the French government in addressing budget cuts that are affecting crucial sectors such as culture, health, and environmental sustainability. The government's efforts to reduce its budget by 40 billion euros have raised concerns, particularly given the simultaneous increase in defense spending.

Historically, France has been a pioneer in tax policy innovation, having previously introduced value-added tax (VAT) in 1954. However, the current concentration of wealth and the associated tax optimization strategies utilized by billionaires create significant challenges for equitable taxation. The economists point out that while billionaires in the U.S. face regulations that curb tax avoidance, similar measures are lacking in France, enabling the ultra-rich to exploit loopholes.

This call follows a history of discussions in the French Assembly regarding a 2% tax on fortunes exceeding 100 million euros, which was ultimately blocked by the Senate, highlighting the political challenges facing such reforms. In addition, proposals have emerged to ensure that individuals remain liable for the wealth tax for up to ten years after leaving France to prevent tax evasion.

As countries like Brazil and Spain adopt measures to tax their wealthiest citizens, the economists question when France will take similar steps, emphasizing that taxing the ultra-rich is essential not just for generating revenue but for maintaining social equity and stability in the nation. The urgency of these reforms reflects the broader economic pressures faced by the government and society as a whole, emphasizing the necessity for immediate action against rising inequality and financial discord.