Europe’s wealthiest person is fighting back against a new proposal to tax the super-rich in France. Bernard Arnault, the head of the luxury empire LVMH (the company behind Louis Vuitton, Moët and Hennessy, among others), described the plan as an “attack on the French economy,” as reported by the Sunday Times.
A tax on the super-rich
The proposed plan would introduce a 2% tax on personal fortunes exceeding 100 million euros. This new tax would only apply to the top 0.01% of the population, affecting roughly 6,500 of France’s wealthiest citizens. Arnault’s own fortune is estimated to be more than 1,400 times this threshold.
France’s economic crisis
The debate comes as France faces significant financial challenges. The government is struggling with a high national debt and a growing budget deficit, putting pressure on leaders to find new sources of income. The country’s economic situation is marked by several key problems:
- Rising National Debt: Projections show the national debt could rise to over 125% of the country’s total economic output by 2029, more than double the limit agreed upon by European Union countries.
- Budget Shortfall: The budget deficit is expected to far exceed European targets, limiting the government’s ability to spend.
- Growing Interest Payments: The cost of paying interest on the national debt is set to become the second-largest expense in the national budget, surpassing spending on education.
- Credit Rating Worries: Credit rating agencies have warned that France’s score could be lowered, which would make it more expensive for the country to borrow money in the future.
