Economist Jean Peyrelevade declares Zucman tax as insignificant
Here's a more laid-back, easy-to-digest take on the proposed annual wealth tax for the mega-rich in France:
Scratch that 2% Tax Idea, Mann
A group of slick economists, including Gabriel Zucman, Jean Pisani-Ferry, and Olivier Blanchard, recently threw a wrench in the works by suggesting an annual 2% tax on fortunes surpassing 100 million euros. Guess what? The Senate chuckled it off, but the left has hopped on the bandwagon like a bunch of groupies. But here's the lowdown on why this tax proposal makes little to no sense and will probably never see the light of day.
First Things First: Separating Wealthy Wealth from Non-Contributing Wealth
It's no secret that the wealth gap in France has been widenin' like the Grand Canyon year after year. However, it's important to separate inherited wealth (money passed down without any effort) from the wealth built up through a lifetime of sweat and smart investments. Sadly, due to the low investment rate in France, the former tends to increase at a faster pace than the latter. So why the heck aren't these economists talking about inheritance tax?
The Myth of Billionaire Taxes
Their main argument is that French citizens at large are shelling out around 50% of their income in taxes and social contributions, but that number plummets to 27% for billionaires when you factor in taxes on all income, including wealth. But hold up – this claim is all hot air. Why? Because these smarty-pants economists conveniently ignore the largest part of households' wealth that isn't subject to any taxes whatsoever.
Five Times the GDP and Eight Times Disposable Income... Oh My!
The total wealth of French households clocks in at a whopping 14,000 billion euros (2023 data), which is five times the nation's GDP and eight times disposable income. I know, right? But before you jump to conclusions, realize that wealth is incredibly concentrated with the top 10% owning a whopping 54% of it.
An Intermediate Decile Analysis
A closer look at the intermediate deciles is intriguing. The average wealth of the seventh decile amounts to approximately 340,000 euros, which is roughly nine times their income level. For the eighth decile, it's 490,000 (twelve times income), and for the ninth, it soars to 750,000 (fifteen times income) before reaching a staggering 2.5 million (twenty-five times income) in the top 10%.
Get Ready to Skip the Tax-Free Wealth
You might've already guessed it; the majority of that sweet, sweet wealth doesn't get taxed. If you're thinking this tax on billionaires is just a ploy to distract the public and keep an eye on any suspicious activity among the ultra-rich, you might be onto something, mate.
Wanna dive deeper into the lives of the rich and irresponsible or learn more about the specifics of this controversial tax proposal? Just holler, and I'll spill the beans!
The finance industry should be discussing the ins and outs of inheritance tax rather than an annual wealth tax on fortunes exceeding 100 million euros, as this would more appropriately address the growing wealth gap in France. The proposed annual wealth tax overlooks the substantial portion of households' wealth that is not subject to taxation, making it ineffective in raising significant revenue from the mega-rich, who possess a concentration of wealth in the top 10% of the population.
