France's Wealth Tax Debate: Balancing Economy and 'Tax Justice'

France's government defended its alternative to a broad tax on the ultra-rich on Friday, as lawmakers engaged in a heated debate over a wealth levy aimed at addressing a budget deficit. The discourse has revealed deep rifts within the country's parliament about how to tax the wealthiest citizens, in connection with Prime Minister Sebastien Lecornu's proposed cost-cutting budget.

Left-wing lawmakers, citing economist Gabriel Zucman, advocate for a 2% tax on wealth exceeding 100 million euros, potentially generating 15-20 billion euros each year. Zucman contends that this tax, which has garnered widespread public support, would ensure that the ultra-rich contribute proportionately as much as average earners.

Concerned about potential negative impacts on businesses, investments, and jobs, Lecornu proposed a 2% levy on assets in holding companies not used for business purposes. Expected to raise approximately 1 billion euros, this measure seeks to target personal assets held in companies primarily serving as tax shelters, according to Budget Minister Amelie de Montchalin. The legislation's final form could still change, with the influence of Senate review and potential constitutional challenges.