France's Wealth Tax Debate: Tensions in Parliament

French lawmakers have dismissed proposals from the Left to implement a wealth tax on the ultra-rich, instead endorsing a more restrained government plan targeting assets kept in holding companies. This decision comes amid mounting pressure from Socialist lawmakers, angered by the rejection of the wealth tax.

To appease the Socialists, who recently threatened a government overthrow if billionaires weren't taxed further, Prime Minister Sebastien Lecornu offered a compromise by agreeing to consider lifting freezes on pensions and welfare benefits in the 2026 budget. Despite this concession, deeper divisions remain within France's tumultuous parliament over taxation policies concerning the wealthiest citizens.

The debate intensified as centrist, conservative, and far-right lawmakers unified to oppose various left-wing proposals, including a 2% wealth tax advocated by economist Gabriel Zucman. While supported in public polls, Lecornu warned it could harm businesses and lead to a flight of France's wealthiest taxpayers. Consequently, a moderated version targeting non-business assets in holding companies was endorsed, yet legislative challenges remain as the budget advances to the Senate.