San Francisco Frontiers - French lawmakers reject wealth tax as budget tensions mount

France is under pressure to pass a spending bill by the end of the year to rein in its deficit and soaring debt, but efforts have been hampered by a political deadlock.

A left-wing bloc made up of the Socialist, Communist, Green parties and the hard-left France Unbowed had proposed a minimum two-percent tax on wealth over 100 million euros ($115 million), dubbed the "Zucman tax" after the French economist who devised it.

But lawmakers in the National Assembly rejected the measure on Friday evening, 228 voting against and 172 in favour.

After the vote, Socialist leader Olivier Faure said there was "no possibility" of voting on the budget in its current form, but urged the premier and lawmakers to keep seeking a compromise — or face censure and the threat of new legislative elections.

"If you think that at some point, we will agree to vote for a budget that is completely regressive, then you are mistaken," he said.

"None of us here on the left... are afraid of the ballot box. And so, we will go to the polls if we have to."

For his part, Lecornu expressed his "profound disagreement" with the wealth-tax proposal, insisting there was no such thing as a "miracle tax".

After the vote, he called for a "change of method" and asked his ministers to bring together party representatives to find a path forward.

The lower house of parliament also voted down a "Zucman-light" proposal from the Socialists. This version called for a minimum three-percent levy on assets of 10 million euros and above, excluding family and "innovative" businesses in a concession to the government.

- Debate 'not over'-

The Socialists have said they will continue pushing for alternative tax justice proposals in the budget, with lawmaker Arthur Delaporte saying the debate is "not over".

Lecornu, the country's third prime minister in a little over a year, has promised to get a budget through parliament, after the legislature ousted his two predecessors over cost-cutting measures in their versions.

The premier survived a confidence vote earlier this month by agreeing to suspend a deeply unpopular pensions reform under pressure from the Socialists.

But the Socialists, a swing group in parliament, have also demanded a tax on the uber-wealthy, without which they have threatened to topple his government.

French economist Gabriel Zucman, 39, has said such a tax on the mega-wealthy could raise around 20 billion euros per year from just 1,800 households.

The far right and Lecornu's government are against taxing professional assets, which this levy would target.

France has been mired in political deadlock since President Emmanuel Macron last year called for snap parliamentary elections, hoping to cement his power.

Instead, his centrist bloc lost its majority and the far right gained seats, and the parliament ended up divided.

P.Thomas--SFF