French supertax on wealthy raises only a quarter of planned revenue

[Special thanks to Joel C. Dobris (Professor of Law, UC Davis School of Law) for bringing this article to my attention.]

A special income tax on high earners in France last year raised only a fraction of what the government had hoped for — partly because its late application gave taxpayers a chance to avoid it — and proceeds this year are again expected to be lower than budgeted.

The French finance ministry said that a so-called “differential contribution” applying to those earning more than €250,000 a year raised only €400mn for the 2025 tax year instead of the €1.9bn it initially projected. The tax was designed to ensure that such high earners paid at least 20 per cent of their income in tax.

For 2026, the tax is expected to raise €650mn, €1bn less than planned, the ministry said, creating a budgetary hole that the government has said will be filled with other taxes and spending cuts.

The finance ministry blamed the shortfall of the tax on high earners on a changed design of the tax. It was initially conceived as retroactive to 2024, but was instead applied only to 2025 because of a political stalemate that led the budget to be enacted late, making the tax’s retroactive application illegal.

“As a result, we did observe a certain number of dividend distributions at the end of 2024,” Bercy explained. “This affected the proceeds.”

The revelations are likely to fuel debate among political parties that have been fighting over how to cut the wide deficits plaguing France.

Leftwing parties last year mounted an unsuccessful push for a much harsher approach known as the “Zucman tax” after the French economist Gabriel Zucman, who has advocated for it globally. It would have required people with fortunes of more than €100mn to pay a minimum of 2 per cent tax annually on all their assets, including their companies, shares of companies and unrealised gains.

Instead, President Emmanuel Macron’s centrist prime ministers — who led fragile minority governments with three different figureheads in 18 months — have enacted a more modest version.

For more information see Leila Abboud “French supertax on wealthy raises only a quarter of planned revenue,” The Financial Times, January 22, 2026.