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Kuttner on TAP

Taxing the rich and the survival of Emmanuel Macron

A crucial political meeting in Paris today will force a choice between a popular wealth tax and a deepening political crisis.

The idea of a wealth tax on society’s richest people is suddenly in vogue, thanks to the political stalemate in France. Economist Gabriel Zucman, who divides his time between Berkeley and Paris, has proposed a wealth tax that maxes out at 2 percent, on France’s top 0.1 percent of households, just 1,800 people, whose wealth exceeds 100 billion euros, about $118 billion.

So highly concentrated is wealth in France that the tax would bring in between $15 billion and $25 billion annually, enough to substantially reduce France’s huge budget of close to 6 percent of GDP without unpopular budget cuts. More than anywhere else, France poses that stark choice.

The idea of a wealth tax has been around for a while. Elizabeth Warren and Bernie Sanders have proposed something similar. What gives the Zucman tax special resonance at this moment is that three French governments have fallen in the past year over demands for cuts in popular social spending.

The idea of the tax has made the 38-year-old French economist a rock star. A recent poll shows that 86 percent of French voters support the tax, including 75 percent of voters for Marine Le Pen’s far-right National Rally party and 92 percent of President Macron’s supporters. The stark choice between unacceptably high deficits, cuts in popular social programs, or a tax on society’s wealthiest has given French politics a new slogan: Justice Fiscal!

A further benefit of the tax is that Le Pen, supposedly the champion of France’s downtrodden, has been coy about whether she supports the tax. So the idea also has the virtue of dividing Le Pen from her supporters.

What gives the tax its political power in this moment is the extreme vulnerability of the government. Macron has relied on a succession of minority governments. He made a disastrous miscalculation in June 2024, when he called a snap parliamentary election, which left his allies with even fewer seats. The legislative election resulted in a hung parliament with the left-wing coalition New Popular Front with a plurality of 193 deputies, Macron’s Renaissance coalition in second place with 166, followed by Le Pen’s RN in third place with 142.

His recent prime minister, François Bayrou, was ousted overwhelmingly in a 364-194 vote on September 8, a protest against Bayrou’s austerity budget. Macron’s newest prime minister, the fourth in 12 months, Sébastien Lecornu, can survive only if he wins the support of the Socialists, who hold a crucial bloc of 64 seats. But the Socialists’ make-or-break demand is that Lecornu’s budget include the Zucman tax or something like it.

The Socialist leadership met with Lecornu today. He offered some concessions, including some form of tax on wealth, but not the tax proposed by Zucman. And he promised that there would be a separate vote on both the Zucman tax and the proposed cuts in pensions. Whether this would be enough for the Socialists to support his budget and keep the government from falling remains to be seen.

Macron, whose own popularity ratings have been languishing, has made it clear that he opposes a wealth tax. But if negotiations between the Socialists and Lecornu collapse over the wealth tax, Macron would likely have to call new elections once again. The big winner would be Marine Le Pen, whose RN party would almost surely gain seats, making Macron dependent on Le Pen and her allies to govern at all.

The irony is that Macron has presented himself as France’s best hope to keep Le Pen from power. The next presidential election is in 2027, though it could be sooner if Macron’s repeated stumbles compel him to resign.

Macron himself is barred from running by France’s two-term limit. None of his center-right allies is well positioned. A Socialist might give Le Pen a viable challenge, especially if Macron decided to govern for the remainder of his term with the center-left. But unless Macron and Lecornu make a radical shift and back something like the Zucman tax, it appears that Macron would rather ease the path to power for his archrival Le Pen than tax the super-rich.

The U.S. has even greater extreme concentration of wealth and low effective taxation of the rich than France. Trump’s tax cuts for the wealthy combined with program cuts for everyone else have made the disparity even worse. But the sideshow around shutting down the government combined with Trump’s control of Congress has blurred the real choices. In France, they are stark. Let’s hope France leads.

– ROBERT KUTTNER

Follow Robert Kuttner on Bluesky