France mulls new tax for people earning over €250,000/year
What's the story
French Prime Minister Sebastien Lecornu is reportedly planning to impose a new tax on individuals earning over €250,000 (around ₹2.6 crore) annually. The move aims to secure support from the Socialist opposition for his government's 2026 state budget, according to financial daily Les Echos. The proposed measures are expected to bring in an additional €3 billion in fiscal revenue next year.
Tax details
Proposed measures include 'minimum tax' on high earners
The first measure is a renewal of the CDHR (differential contribution on high incomes) "minimum tax" introduced by Lecornu's predecessor Francois Bayrou. This tax ensures that high-income households pay at least 20% of their income in taxes. The second measure targets super-wealthy individuals using holding companies to avoid dividend taxes, which could yield just over €1 billion for 2026.
Tax evasion
Finance ministry identifies 30,000 financial structures that would be affected
The French finance ministry has identified around 30,000 financial structures that would be affected by the new measure. These structures are used to cash in dividends without redistributing them, thereby avoiding dividend tax. The total expected additional contribution from these measures is between €4-4.5 billion.
Political strategy
Socialists demand wealth tax from Lecornu-led government
Lecornu, who recently became President Emmanuel Macron's fifth prime minister in two years, is now trying to win leftist support for the 2026 budget. The Socialists have called the current proposals "insufficient" but are open to further discussions. They demand a 2% wealth tax on France's 0.01% as part of their support conditions, which could help Lecornu politically despite being unpopular with conservatives.