France Plans to Make Wealth Tax Permanent Amid Soaring National Debt

Facing mounting public debt, France is moving to make a previously temporary wealth tax a permanent fixture. Economy and Finance Minister Eric Lombard announced during an interview.

According to official statistics, France’s public debt surged by €202.7 billion last year, reaching €3.3 trillion, or 113% of GDP. Lombard acknowledged that the debt level threatens the country’s financial stability, leading to plans for a €40 billion fiscal adjustment focused mainly on spending cuts and savings.

Lombard proposed maintaining the “exceptional contribution” initially introduced as a temporary measure for high earners to address the budget shortfall. Under the current framework, individuals earning over €250,000 annually and couples earning over €500,000 are subject to a minimum 20% income tax rate. The levy, introduced last year, generated €2 billion in revenue for 2024.

“I hope that this contribution will become lasting,” Lombard said, emphasizing the measure’s financial necessity and fairness. He also confirmed that while the special tax on major corporations that raised €8 billion would not be repeated, the wealth tax targeting high-income individuals could be maintained or strengthened.

Lombard’s ministry has initiated a review to ensure that tax relief mechanisms for the wealthiest are reformed to become “more equitable.” His office stated the aim is to curb excessive tax optimization practices.

With ratings agencies and financial markets showing concern over France’s fiscal outlook, Lombard stressed that France is “on budget alert.” While the €40 billion consolidation effort would focus mainly on savings, he did not rule out modest revenue increases tied to future economic growth.

The move marks a significant shift in France’s fiscal policy and could redefine its approach to wealth and taxation in the coming years.

For further details, clarification, contributions, or any concerns regarding this article, please get in touch with us at editorial@tax.news. We value your feedback and are committed to providing accurate and timely information. Please note that our privacy policy will handle all inquiries.