French lower house approves budget amendment to tax billionaires

France's National Assembly on Friday approved an amendment to the government's 2025 belt-tightening budget bill that would hit the country's wealthiest individuals with a billionaires tax.

The Zucman amendment, sponsored by leftist lawmakers from La France Insoumise party and inspired by French economist Gabriel Zucman who advocates a global billionaires tax, would impose a 2% levy on those with fortunes in excess of 1 billion euros.

The proposed tax, which leftist lawmakers say could raise an estimated 13 billion euros in extra revenue, is still far from being implemented, however, as amendments to the 2025 budget bills must also be cleared by the Senate. Budget talks are expected to last until December.

CONTEXT

The government's 2025 budget plan, unveiled earlier this month is aimed at plugging a gaping hole in the public finances with 60 billion euros worth of tax hikes and spending cuts.

The budget bill is expected to get a rough ride in parliament from opposition parties. Prime Minister Michel Barnier may need to use special constitutional powers to bypass parliament, although that might prompt a no-confidence motion against his fragile administration.

PROPOSED TAX HIKES IN THE 2025 BUDGET BILL:

- France's largest companies with revenue exceeding 1 billion euros will pay an additional tax on their profits. The tax is expected to raise 8 billion euros and, if approved, would affect 440 companies.

- Individuals earning more than 250,000 euros a year will see a temporary increase in income tax, and a minimum tax of 20% will be introduced for those households only, to prevent the use of tax loopholes, raising 2 billion euros per year.