Wealth tax would be deadly for French economy, says Europe’s richest man

Europe’s richest man, the luxury goods magnate Bernard Arnault, has said that a wealth tax that could cost him more than €1bn (£817m) would be deadly for France’s economy.

The French founder of LVMH Moët Hennessy Louis Vuitton said in a statement to the Sunday Times that calls for a 2% wealth tax on all assets “aims to destroy the liberal economy, the only one that works for the good of all”.

The idea of a wealth tax has steadily gained ground in France because of a political crisis, with the government trying to push through unpopular budget cuts. The idea of a 2% wealth tax on fortunes worth more than €100m has been proposed by Gabriel Zucman, an economics professor who has become a household name in France.

The economist argues that the tax – named the Zucman tax by others – could help France with its squeezed budget. The French president, Emmanuel Macron, this month appointed a new prime minister, Sébastien Lecornu, after the centrist François Bayrou failed to win support for an austerity budget.

Arnault – previously the world’s richest man – claimed that a 2% wealth tax would be an “offensive, which is deadly for our economy”. He also said he was “certainly the largest individual taxpayer and one of the largest professional taxpayers through the companies I run” in France.

Arnault’s net worth stood at $169bn (£125bn) on Friday, mainly because of his 48% stake in LVMH Moët Hennessy Louis Vuitton, according to Bloomberg. After joining his family company and turning it from construction to property, Arnault grew his fortune by buying up brands ranging from the jewellers Bulgari and Tiffany & Co, the fashion houses Christian Dior and Celine, to perfumes and whiskey brand Glenmorangie.

Arnault, who lives in Paris, sparked a French national debate over tax in 2012 when he sought Belgian citizenship. However, in April 2013, he withdrew his application as “a gesture of my attachment to France and my faith in its future”, according to Bloomberg.

Zucman is a professor of economics at the Paris School of Economics and the École normale supérieure, and last year wrote a prominent study on the wealth tax for the G20. In June, Zucman wrote in the Guardian: “Unprecedented wealth concentration – and the unbridled power that comes with such wealth – has distorted our democracy and is driving societal and economic tensions.”

The wealth tax could raise as much as €20bn, according to Zucman. However, other economists have argued that it would raise only €5bn if the ultra-wealthy leave France.

“This is clearly not a technical or economic debate, but rather a clearly stated desire to destroy the French economy,” Arnault’s statement said. “I cannot believe that the French political forces that govern or have governed the country in the past could lend any credibility to this offensive, which is deadly for our economy.”