Abstract
This paper will examine wealth inequality in France on the basis of tax reform, as well as what role should be played by government intervention, evaluating current policies, and proposing improvements. It's going to evaluate how these reforms could affect the economy, society and politics by doing a cost-benefit analysis in a systematic way.
Extract
[...] These policies are designed to tax rich people more in order to reduce inequality. The progressive nature of the income tax in France imposes increasing rates on higher incomes, which helps to achieve redistributive objectives. Unlike the former ISF, which had a broad wealth base, the IFI taxes only real estate wealth; while inheritance taxes are levied on those asset transfers that occur at death and aim to avoid high concentrations of wealth that cross-generationally accumulate. Even if those have brought some money into a different distribution, they suffer from several issues. [...]
[...] A reformer with a drizzle of progressivity is the surest remedy for high wealth inequality, as well as economic instability. This is a direct assault on income inequality as it makes certain that the richest pay their fair share, which can be used to reinvest into social goods. It is realistic given the current tax system, and it is low-cost as it builds on existing systems with modifications rather than starting from scratch. While UBI or an enhanced social safety net could complement the reform, the direct focus of progressive taxation makes it the most impactful and sustainable choice for addressing long-term inequality in France. [...]
[...] Implementing a fair tax system and strategic reforms can diminish income inequality, provide additional resources for important social initiatives and other public goods, enhance economic growth potential and foster greater social trust. Such broader-based taxation netting a wider swath of the population is incrementally mitigating economic disparities aligned with social upheavals applicable to many nations. Tackling inequality is not only a question of social justice, it is also a prerequisite for sustainable development and democratic resilience. Policy that follows has to remain committed to solutions which ensure efficient trade-off between equity and efficiency, with long-lasting effects. [...]
[...] Can tax reform reduce French wealth inequality without harming economic growth? Introduction Wealth inequality is a persistent issue in France, with significant disparities between the richest and the poorest segments of the population (Pasche, 2019). Despite some reductions in wage inequality over recent decades, wealth inequality has been on the rise since the late 1990s (Statista Research Department, 2024). Recent data illustrates this gap starkly: in 2024, Bernard Arnault, the CEO of LVMH, saw his fortune triple within four years, while 8.8 million French citizens live below the poverty line with monthly incomes below ?1,026, and many face even harsher conditions. [...]
[...] Administrative feasibility - the ability for policymakers to implement policies while minimizing the burden on tax authorities. Finally, related to the first condition is political acceptability as well - reforms that are too radical may face both public and political resistance that can result in policy gridlock. If reforms proposed fulfill the following criteria, France may avoid wealth redistribution towards one pole. Cost-Benefit Analysis of Proposed Policy Implementing a progressive tax reform in France could lead to significant societal and economic benefits. [...]
