An IMGW News Report
French PM Barnier Eyes Wealth Tax as Deficit Grows
French Prime Minister Michel Barnier has hinted at possible tax increases for the wealthy as the government faces a growing budget deficit. “The French people demand tax justice,” Barnier stated, stressing that the wealthiest should not be exempt from contributing to France’s recovery.
Following his appointment, Barnier addressed the nation’s economic challenges, including a public-sector deficit projected to reach 5.6% of GDP this year. This follows a 5.5% shortfall in 2023, which exceeded both the government’s target and the EU’s 3% limit. Rising debt has led to EU disciplinary action and a credit downgrade from S&P in May, the first since 2013.
“A large part of our debt is held on international markets. We must preserve France’s credibility,” Barnier warned during an interview with France 2, while assuring that middle- and working-class citizens would be spared: “I won’t increase taxes on those who work, the middle classes, or the most modest households.”
Political Pushback and Deadlines
Barnier’s comments have sparked backlash from both the left and within Macron’s own party. Critics argue that his appointment does not reflect the left-wing New Popular Front’s success in July’s election. Acting Interior Minister Gérald Darmanin said, “We will not support a government that raises taxes,” while Gabriel Attal, president of Macron’s Renaissance MPs, vowed to oppose any tax hikes.
With an October 1 deadline to present next year’s budget, political divisions could delay the process.
Wealthy Citizens Consider Leaving
The prospect of higher taxes has wealthy French citizens considering relocation. Advisers report increased interest in moving assets to tax-friendly countries such as Switzerland and Luxembourg. Some are eyeing moves to Italy, Dubai, or the US, where tax regimes are more favourable.
Ranking: Top Cities by Number of Millionaires
Despite Macron’s earlier pro-business tax reforms, uncertainty surrounding France’s fiscal future is pushing many affluent individuals to reassess their residency. By 2024, it is estimated that the number of individuals in France with a net worth exceeding one million US dollars will reach 2.8 million, compared to 2.1 million in 2019 (Statista, 2024).
