“An extremely unfair tax”: Thomas Piketty proposes reducing the property tax “for 90% of French people”

Should we cut the property tax? Economist Thomas Piketty called for a reform of this “extremely unfair tax” that “governments have quietly allowed to increase” in recent years. “Often, you own nothing, you repay a loan,” he stressed this Thursday, October 15 on BFMTV, calling for “a move to a progressive tax on net borrowing assets.” In fact, this would amount to “a reduction in property tax for 90% of French people”.

At a time when the government and the right are regularly brushing aside the proposal for a Zucman tax on high wealth put forward by the left, Thomas Piketty was surprised that “everyone finds [the property tax] normal but as soon as it comes to taxing 2% on high wealth we start to panic”.

Faced with the critical economic situation in France, the economist also proposes a “national solidarity tax” inspired by that put in place in 1945 to rebuild the post-war economy. It would notably include “an exceptional contribution of 50%” on the enrichment of high wealth (more than 100 million euros) accumulated between 2017 and 2026. “This is not implausible given what the average French person pays in income tax,” he insisted.

Thomas Piketty also calls for a “permanent component” with a tax of 10% per year beyond 100 million euros of assets. Many entrepreneurs have a virtual fortune based on the value of their company, the economist suggests that they pay this tax by paying shares into a sovereign wealth fund.

Because the objective, more than raising taxes to repay the debt, must be to “take back control of our economy” with a sovereign fund that would invest to prepare for the future. Not fundamentally against billionaires, Thomas Piketty nevertheless claims to note that “when we had less concentration of wealth, we had more prosperity”. “The economic results” of this enrichment “are not up to par and do not prepare for a sustainable future”.

The fact remains that faced with such a massive tax, the richest could be tempted to flee abroad. Rather than a compulsory tax for citizens of French nationality wherever they are (as the United States does), Thomas Piketty proposes to “have taxes paid in proportion to the number of years spent in the country”. Thus, “a person who has lived 60 years in France and has become rich by taking advantage of France's infrastructure, if they move to Switzerland at 61, they are taxed in France at 60/61” of their assets, then 60/62 the following year.