Zucman Tax: Pros and Cons

For much of 2025, the French Parliament debated a proposed global minimum wealth tax of 2% on ultra-rich individuals residing in France and owning assets worth $100 million or more. It was dubbed the Zucman tax because its main author was the French economist Gabriel Zucman. Ultimately, the proposal was rejected by a majority of deputies in the lower house. Nevertheless, the debate over the Zucman tax extended far beyond the legislature, as the country has been running a public deficit of more than 5%. It also extended far beyond France’s borders.
Wealth taxes have been cropping up in the United States as well. New York City’s newly elected mayor, Zohran Mamdani, has proposed a wealth tax to close a projected $5.4 billion budget deficit over the next two years. If his proposal is passed into law, the personal income tax rate on annual earnings greater than $1 million would increase by two percentage points to about 5.9%. California is also considering a proposal to impose a new wealth tax on billionaires; if passed, billionaires residing in the state would pay a one-time tax equal to 5% of their assets.
A common theme running through these debates is whether wealth taxes are the right policy tool to address looming public deficits and whether the very rich would relocate to regions without such taxes.

In this concisely written case study, instructors can open the floor to discussion about a wide range of public policy issues, including the urgent need for greater public investment in healthcare, education, infrastructure, and the transition to net-zero carbon emissions. Instructors can also stimulate discussion about fast-growing economic inequalities and the much-needed reforms required to create a fair and trustworthy tax system.
On the other hand, instructors can address the difficulties of imposing a tax on the very rich, whose wealth is often tied up in holding companies. Valuations of private companies such as AI start-ups are particularly difficult to assess, as founders may appear wealthy on paper but could, in some cases, be forced to liquidate assets to pay the levies.