Seven Nobel Prize-winning economists have called on France to implement a minimum tax on wealthiest households, endorsing a measure inspired by the so-called "Zucman tax" that was rejected by the French Senate last month. The proposal comes as the French government looks for new sources of public revenue to balance its strained public finances.
In a joint op-ed published Monday in Le Monde, the laureates argue that France has a chance "once again to show the way to the rest of the world," by taking the lead on taxing extreme wealth.
Signatories include 2024 Nobel laureates Daron Acemoglu and Simon Johnson, 2019 winners Esther Duflo and Abhijit Banerjee, 2001 laureates George Akerlof and Joseph Stiglitz, and 2008 laureate Paul Krugman. Most are American citizens and globally influential figures in the field of economics.
According to the economists, "the ultra-rich are particularly prosperous in France". While global billionaires hold assets equivalent to 14 percent of global GDP, French billionaires control wealth worth nearly 30 percent of their country's GDP, they note, citing data from Forbes magazine.
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Leading by example
The group argues that a floor tax on wealth – expressed as a fixed percentage – would be both effective and fair. "It is efficient because it targets all forms of tax avoidance, regardless of their nature," they write.
"It is also targeted – affecting mainly the wealthiest taxpayers who engage in aggressive tax optimisation."
The authors also welcome ongoing international discussions around wealth taxation, including a G20 proposal for a global minimum tax on billionaires equivalent to 2 percent of their net wealth.
The initiative failed to advance last year but the economists say momentum is building.
"There is no reason to wait for the finalisation of an international agreement," they write. "On the contrary, countries should take the lead by example, just as France did in the past" with the introduction of VAT in 1954.
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Divided over Zucman tax
The open letter comes after the French Senate in June rejected a wealth tax targeting the ultra-rich, known as the Zucman tax.
The bill was based on proposals by French economist Gabriel Zucman. Initially passed by the National Assembly, the bill would have introduced a "differential contribution" ensuring that individuals with more than €100 million in assets pay at least 2 percent of their annual wealth in taxes.
The aim was to curb the kinds of avoidance strategies employed by some ultra-wealthy individuals, who are often able to structure their assets in ways that greatly reduce their tax burdens.
The bill sparked a heated debate among economists – some championed the measure as a step towards fiscal justice while opponents saw it as economically harmful or difficult to apply.
(with AFP)
