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French Budget Showdown: Finance Panel Rejects Zucman Tax and Rewrites Core Revenue Measures

A minority government now heads to a Friday plenary under market downgrade pressure with a Socialist censure threat.

Overview

  • The National Assembly’s finance committee voted down the proposed Zucman levy on ultra‑wealth, while backing a patchwork of changes that reshape the government’s revenue plan.
  • Lawmakers preserved the 10% tax abatement for pensioners, reinstated the pre‑2019 exit tax, indexed only the first income‑tax bracket to inflation, and extended the 20% minimum levy on very high incomes until the deficit falls below 3% of GDP.
  • An LR amendment scrapped the planned tax on financial holdings of €5 million or more in commission, replacing it with taxation at the owner’s death, with sponsors expecting the hemicycle to revisit the confused vote.
  • Matignon says it will file an amendment in November to suspend the pensions reform, a move estimated to cost about €400 million in 2026 that must be offset.
  • Plenary debate on the revenues bill opens Friday with a first vote slated for 4 November, as the government vows not to use 49.3, S&P’s downgrade heightens scrutiny, and PS leader Olivier Faure warns a censure motion remains on the table.