French lawmakers vote in favour of new tax on wealth of billionaires

French lawmakers on Friday voted in favour of a new levy that would tax assets above the €1 billion threshold at 2%.

It would apply to anyone who is a tax resident in France or who has assets in France.

The amendment, proposed by the far-left LFI party (France Unbowed), comes as France’s National Assembly debates next year’s state budget.

A draft proposal created by the incumbent government is debated and amended, before being sent to France’s Senate for another review.

The acceptance of the wealth tax comes despite opposition from the ruling Renaissance party, as well as from the National Rally party.

Speaking in the National Assembly on Friday, LFI lawmaker Aurelien Le Coq argued: “In this budget, we are asking for efforts for almost everyone on almost everything, but there is one thing that we aren’t touching.”

He added: “There is not a single measure in this budget that decides to tap into the wealth of the richest people.”

Le Coq suggested that when simply considering the 10 biggest fortunes in France, the tax would bring in no less than €13bn for the state.

Laurent Saint-Martin, Minister Delegate for the Budget and Public Accounts in the incumbent government, criticised the amendment, arguing that it is “the best way to scare off those who can invest in our country”.

Friday’s vote comes despite failed efforts in France to reimplement the ISF, a wealth tax in France that was replaced with another levy – the IFI – in 2018.

The IFI only relates to real estate assets, meaning that it is not as far-reaching.

The newly proposed wealth tax also comes at a time when the French state is greatly in need of extra revenue.

France’s public deficit hit 5.5% of the country’s GDP last year, massively exceeding forecasts and violating the EU’s target of 3%.

At the end of last month, new budget minister Laurent Saint-Martin revealed that this year’s figure could overshoot 6%.

Experts believe that despite Friday’s vote, the suggested wealth tax is unlikely to survive scrutiny from the Senate.