Bernard Arnault, Europe's richest person and the chair of LVMH, the world's largest luxury group, publicly expressed opposition to the wealth tax being pushed in France. Arnault said a 2% wealth tax would destroy the liberal economy and could be fatal to the French economy, directly pushing back against the political move.
According to the Guardian on the 21st (local time), France is seeing renewed debate over a wealth tax on ultra-high-net-worth individuals as fiscal pressures on the government grow. The plan under discussion would apply a 2% rate to asset of more than 100 million euros (about 145 billion won), and is led by Paris School of Economics professor Gabriel Zucman, giving it the nickname "Zucman tax." Zucman analyzed that up to 20 billion euros in revenue could be secured through the wealth tax, but some economists warned that if the ultra-wealthy transfer asset overseas, the actual revenue effect would be limited to 5 billion euros.
In a statement, Arnault emphasized that he is the individual who pays the most taxes in France and one of the businesspeople who pay the most corporate tax through the corporations he runs. He argued that the current wealth tax debate goes beyond a simple fiscal issue and is a political intent to destroy the French economy. Arnault holds 48% equity in LVMH, and his current net worth is about $169 billion (about 225 trillion won). He has grown his asset by acquiring global luxury brands such as Bulgari, Tiffany & Co., Christian Dior, and Celine.
The wealth tax debate has gained momentum amid recent political instability. President Emmanuel Macron reshuffled his cabinet after failing to pass the budget, and as backlash against austerity has intensified, calls to reintroduce the wealth tax are growing, centered on the left and the center. Newly appointed Prime Minister Sébastien Lecornu also faces the task of mediating disputes in the National Assembly.
Arnault has previously been at the center of tax controversy. In 2012, he applied for Belgian citizenship and faced fierce criticism in France. But in 2013, he withdrew the application, explaining it was a decision to show his affection for France and belief in its future.
Zucman, who is leading the push for the wealth tax, reiterated its necessity in a recent op-ed, saying that unprecedented concentration of wealth and the resulting power imbalance are distorting democracy and intensifying social and economic tensions. He has also proposed similar tax regimes to the Group of 20 (G20), saying the wealth tax should be discussed at a global level.
Arnault, however, countered that a wealth tax could lead to reduced investment and worsening employment. He warned that this measure would undermine economic efficiency and deal a serious blow to the competitiveness of French corporations.
Experts projected that the wealth tax debate will become a key variable in France's future economic policy and political conflict.