French Socialists threaten to topple government unless wealth tax is included in austerity budget, creating political deadlock.
PARIS: French lawmakers will vote on a wealth tax today after a swing group threatened to bring down the government if the levy is excluded from next year’s austerity budget.
France faces pressure to pass a spending bill by year-end to control its deficit and escalating debt amid ongoing political turmoil.
The country’s third prime minister in just over a year, Sebastien Lecornu, has pledged to succeed where his two predecessors failed after their removal over austerity measures.
Lecornu narrowly survived a confidence vote this month by suspending an unpopular pensions reform under Socialist pressure.
The Socialists, holding the balance of power in parliament, have demanded a tax on the ultra-wealthy and threatened to topple the government by Monday without it.
They initially proposed a levy named after French economist Gabriel Zucman targeting approximately 1,800 wealthy households to raise 20 billion euros annually.
Zucman’s original plan required individuals with assets exceeding 100 million euros to pay a minimum two percent wealth tax.
Both the far right and Lecornu’s government oppose taxing professional assets, which the proposed levy would affect.
The government prefers taxing wealth management holdings with at least five million euros in assets instead.
Socialists have now suggested a minimum three percent tax on assets above 10 million euros while excluding family and innovative businesses as a concession.
Parliament will debate their revised proposal on Saturday.
As deliberations began, Zucman cautioned the Socialists against compromising his original tax design.
He told France Inter radio that creating a tax full of loopholes and evasion opportunities would guarantee failure.
France has experienced political gridlock since President Emmanuel Macron called snap parliamentary elections last year to strengthen his position.
Macron’s centrist bloc instead lost its majority while the far right gained seats, leaving parliament deeply divided. – AFP
