‘Tax the Rich,’ French Protesters Cry, as the Wealthy Push Back on Paying More

As the French took to the streets on Thursday in another mass protest against a government austerity plan, one phrase was on everybody’s lips: Tax the rich.

With a budget crisis looming, lawmakers with the power to bring down President Emmanuel Macron’s third government in a year are demanding that the very wealthy pay more to help fix France’s finances — nearly eight years after Mr. Macron cut taxes on rich individuals and on companies to make the country more business friendly.

But the tax plan, which would place a new 2 percent levy on assets above 100 million euros (about $118 million), is roiling an already fragmented political landscape.

The tax plan, created by and named after the French economist Gabriel Zucman, has become a totem of France’s Socialist and left-leaning parties, which say it will plug France’s ballooning deficit and address inequality. Businesses and right-leaning parties are warning of an economic calamity.

“This would be a terrible obstacle to investment and risk-taking for businesses,” said Patrick Martin, the head of France’s largest employers’ network, Medef. France already has some of the highest taxes in Western countries, he added, and “introducing this tax would be a form of plunder.”

At a time when Europe is facing budget constraints and demands from President Trump for higher military spending, calls for raising taxes on the rich are growing louder. Spain made a so-called solidarity tax on people with large fortunes permanent this year. Germany is backing a tax on the world’s billionaires. Norway recently expanded wealth taxes to include unrealized stock gains.

Mr. Zucman, 38, whom the French daily newspaper Le Monde called “the billionaires’ nightmare,” has been advocating targeted wealth taxes for over a decade.

In 2023, he won the John Bates Clark Medal, an award for the most significant contributions by an economist under the age of 40. The American Economic Association, which awards the prize, called him “one of the world’s leading experts on tax evasion” and a major contributor to research on measuring and explaining the rise of economic inequality.

The proposal goes to the heart of a debate cleaving France: Should the government fix its finances by cutting spending on pensions, health care and education, or by taxing ultra wealthy individuals at a time when the ranks of the superrich have grown?

For Mr. Zucman the answer is clear. “The ultra rich are barely paying any income tax, and there has been an explosion in billionaire wealth in the last 15 years,” he said in an interview Thursday. “The base of potential tax on this is very large.”

In major cities across France, protesters wielded “Tax the Rich” signs and chanted demands for “fiscal justice.” A group of demonstrators infiltrated the finance ministry in Paris while shouting that the government “has solutions for finding money; all you have to do is look in the pockets of the billionaires.”

As crowds led by labor unions thronged around the Bastille in Paris, people lit flares, brandished signs and shouted into megaphones with calls to tax the rich instead of plugging the deficit with cuts on workers’ protections.

“A solution to the debt: the rich,” one poster read. “Take away from billionaires, not grandmothers,” read another.

The issue has reached critical mass after Mr. Macron’s government fell yet again last week over an austerity budget seeking €44 billion in spending cuts. A recent report from France’s auditor, Cour de Comptes, showed that the country’s finances have been deteriorating in part because Mr. Macron’s tax cuts for businesses and wealthy individuals have resulted in €50 billion in lost revenue annually to the treasury.

Nearly all French political parties, with the exception of Mr. Macron’s and a group of conservative and far-right politicians, have tapped into a wave of resentment against “les riches” — executives, bankers and entrepreneurs whose fortunes are seen as scandalous in a country where the inequality divide touches a cultural nerve that stretches back to the French Revolution.

The new prime minister, Sébastien Lecornu, is racing to draft a new budget. To survive, he needs the support of France’s Socialist Party, which is demanding fewer spending cuts and more revenue from the Zucman tax.

A tax hit on wealthy individuals could provide political cover for painful cuts that Mr. Lecornu also plans to make to social and welfare programs. In that sense, the tax also has enormous symbolic value as a blow in favor of égalité, or equality, after years in which Mr. Macron’s tax cuts for the wealthy earned him the nickname “president of the rich.”

At the protests on Thursday, a man who works with social housing who would give only his first name, Quentin, citing privacy concerns, said: “Macron gave billions in state aid to companies and got rid of wealth taxes” and now the government is “saying the debt and deficit must be fixed with cuts to public services, while billionaires like Bernard Arnault are sheltering a large part of wealth outside France.”

“The rich need to pay their fair share, is what we’re saying,” he added.

Mr. Lecornu, however, has flat out rejected the idea of a Zucman tax and said his government would come up with its own wealth tax proposal.

Attacks on the Zucman tax from the French business community have multiplied in the lead-up to the nationwide strikes. French tech titans warned that the tax could be interpreted as applying to company valuations and force them to come up with billions for the taxman on unrealized gains.

“We need more tax justice in France,” Arthur Mensch, chief executive of Mistral, the behemoth artificial intelligence start-up, said in an interview on French television. But he also said that he “obviously couldn’t pay” on the unrealized gains if the government imposed a 2 percent levy on Mistral’s €11.7 billion market valuation.

Nicolas Dufourcq, the chief executive of France’s public investment bank, Bpifrance, went further. The tax “is actually communist,” he said on French radio, adding that it was an expression of “hate for the rich.”

Mr. Zucman pushed back on that, telling The New York Times that “communism is when the state takes 100 percent of what you own, and here we’re talking about just 2 percent above €100 million.”

“It’s not communism,” he said. “It’s ensuring that tax also applies to the super rich.”

A day earlier, Mr. Zucman had acknowledged the complexity during an onstage debate at a Paris technology conference, but he also suggested that business chiefs could pay the tax “in kind” by contributing shares that the state could keep or sell.

Supporters of a minimum tax on the superrich say the idea that billionaires will abandon France to avoid it, depriving the government of the very source of income it is trying to capture, is overblown. A study by the Paris-based Council of Economic Analysis showed that at most, 0.03 percent of the ultrarich would leave, “but this effect is relatively modest and has a marginal effect on the French economy.”