French lawmakers reject wealth tax as budget tensions mount

PARIS:

France's lower house on Friday rejected a wealth tax proposed by the left, which has threatened to bring down the government if a levy on the super-rich is not in the budget.

France is under pressure to pass a spending bill by the end of the year to rein in its deficit and soaring debt, but efforts have been hampered by a political deadlock.

A left-wing bloc made up of the Socialist, Communist, Green parties and the hard-left France Unbowed had proposed a minimum two-percent tax on wealth over 100 million euros ($115 million), dubbed the "Zucman tax" after the French economist who devised it.

But lawmakers in the National Assembly rejected the measure on Friday evening, 228 voting against and 172 in favour.

After the vote, Socialist leader Olivier Faure said there was "no possibility" of voting on the budget in its current form, but urged the premier and lawmakers to keep seeking a compromise - or face censure and the threat of new legislative elections.

"If you think that at some point, we will agree to vote for a budget that is completely regressive, then you are mistaken," he said.

"None of us here on the left... are afraid of the ballot box. And so, we will go to the polls if we have to."

For his part, Lecornu expressed his "profound disagreement" with the wealth-tax proposal, insisting there was no such thing as a "miracle tax".

After the vote, he called for a "change of method" and asked his ministers to bring together party representatives to find a path forward.