PARIS – The French Senate recently rejected the proposed "Zucman tax," a minimum wealth tax targeting ultra-high-net-worth individuals, which proponents estimated could generate €15 to €25 billion annually. The rejection, occurring in June 2025, followed its earlier adoption by the National Assembly, marking a significant legislative setback for the measure championed by economist Gabriel Zucman. The debate surrounding this tax has also reignited discussions on the economic incidence of social contributions, as highlighted by economist Sylvain Catherine.
Gabriel Zucman, a professor at the Paris School of Economics and UC Berkeley, proposed the tax to address the perceived issue of the wealthiest individuals paying a proportionally lower tax rate than the average citizen. His proposal aimed for a minimum tax of 2% on assets exceeding €100 million for approximately 1,800 French households. The initiative gained international traction, with Zucman having presented a similar blueprint for a global minimum tax on billionaires to the G20 in 2024.
The Senate's decision to reject the bill, with 188 votes against and 129 in favor, effectively halted its parliamentary progress for the time being. Critics raised concerns about its potential constitutionality and the risk of capital flight, despite Zucman's assertions that the tax would not impact companies or deter foreign investment. The Finance Ministry had reportedly prepared a milder version of the tax, excluding professional assets.
Amidst these discussions, economist Sylvain Catherine, an Assistant Professor of Finance at the Wharton School, drew attention to a perceived inconsistency in economic arguments. In a recent tweet, Catherine stated, > "Et lorsqu’ils défendaient la taxe Zucman il y a quelques semaines, ils considéraient que l’ensemble des cotisations sociales, part patronale incluse, étaient bel et bien payées par les salariés." This statement underscores a long-standing economic debate in France: whether employer social contributions are ultimately borne by employees through lower wages or slower wage growth, regardless of who nominally pays them.
Catherine's observation implies that some proponents of the Zucman tax, which seeks to directly tax wealth, simultaneously adhere to the economic theory that the burden of social contributions, including the employer's share, falls on employees. This perspective suggests that the true cost of labor for employers is the total remuneration package, and any increase in employer contributions would eventually translate into reduced net wages or wage increases for employees. The rejection of the Zucman tax and the ongoing debate on social contribution incidence reflect broader disagreements within France on tax fairness, economic competitiveness, and the optimal financing of social protection.