France’s Parliament Rejects Wealth Tax Plans Amid Coalition Tensions

France’s National Assembly has voted down two major wealth tax proposals aimed at the country’s ultra-rich, exposing deep fractures within Prime Minister Sébastien Lecornu’s coalition as the 2026 budget debate intensifies.

Centrist, conservative, and far-right lawmakers united against the proposed 2 percent “Zucman tax” on fortunes above €100 million and a Socialist-backed 3 percent levy on assets exceeding €10 million.

Both measures failed after Socialist deputies abstained, leaving the government’s narrower 2 percent levy on passive holding companies as the only approved measure.

Key Outcomes

Lawmakers Reject Major Wealth Tax Proposals

They voted down Gabriel Zucman’s plan, which aimed to raise up to €20 billion annually, and opposed the Socialist proposal targeting smaller fortunes.

Assembly Approves Limited Substitute Levy

Deputies introduced a 2 percent tax on about 4,000 holding companies used mainly for tax avoidance, adding roughly €1 billion a year to public revenue.

France Faces High Deficit and Debt Levels

The country runs a 5.8 percent budget deficit, while public debt has climbed to 114 percent, among the highest in the eurozone.

Political Fallout

Socialist abstentions have widened divisions within the left, prompting criticism from coalition partners.

Lecornu offered concessions on pension and welfare payments to regain parliamentary support but faces uncertainty over his government’s ability to pass the budget.

Legal and Economic Implications

The government argues that large-scale wealth taxes risk breaching constitutional limits and driving capital abroad.

Analysts say the decision reflects France’s effort to preserve investor confidence while managing rising fiscal pressures.