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Assembly lawmakers have just given a green light to the world’s first significant tax on billionaire wealth at a time when the most powerful nation on Earth—the United States—is moving in the exact opposite direction.
Nine of the world’s 10 wealthiest billionaires now call the United States home. The remaining one? He lives in France. And that one—Bernard Arnault, the 76-year-old who owns just about half the world’s largest maker of luxury goods—is now feeling some heat.
What has Arnault and his fellow French deep pockets beginning to sweat? Lawmakers in France’s National Assembly have just given a green light to the world’s first significant tax on billionaire wealth.
“The tax impunity of billionaires,” the measure’s prime sponsor, the Ecologist Party’s Eva Sas, exulted last month, “is over.”
The annual tax on grand fortune that the assembly’s lawmakers have passed, says the UC-Berkeley analyst Gabriel Zucman, represents “amazing progress” that has the potential to set a bold new global precedent.
Sas had good reason for exulting. In the French National Assembly debate over whether to start levying a 2% annual tax on wealth over 100 million euros—the equivalent of $108 million—the leader of the chamber’s hands-off-our-rich lawmakers introduced 26 amendments designed to undercut this landmark tax-the-rich initiative. All 26 of these amendments failed.
But France’s 4,000 or so deep pockets worth over 100 million euros—the nation’s richest 0.01%—don’t have to open up their checkbooks just quite yet. The French Senate’s right-wing-majority has no intention of backing the National Assembly’s new levy, and, even if the Senate did, France’s highest court would most likely dismiss the measure.
French president Emmanuel Macron, for his part, has spent most of the last decade cutting corporate tax rates and axing taxes on investment assets. And his budget minister has blasted last month’s National Assembly tax-the-rich move as both “confiscatory and ineffective.”
None of this opposition, believes the French economist who inspired the National Assembly’s new tax move, should give us cause to doubt that move’s significance. The annual tax on grand fortune that the assembly’s lawmakers have passed, says the UC-Berkeley analyst Gabriel Zucman, represents “amazing progress” that has the potential to set a bold new global precedent.
What makes the National Assembly’s tax legislation even more significant? That tax-the-rich vote has come at a time when the most powerful nation on Earth—the United States—is moving in the exact opposite direction. The new Trump administration, with the help of the world’s single richest individual, is now busily hollowing out the tax-the-rich capacity of the Internal Revenue Service.
President Donald Trump’s predecessor, Joe Biden, had actually made some serious moves to enhance that IRS capacity, hiring—before he left office—thousands of new tax staffers. But those new hires, notes a ProPublica analysis, have now started going through Elon Musk’s “DOGE” meat grinder.
Team Trump’s ultimate goal at the tax agency? To use layoffs, attrition, and buyouts to cut the overall IRS workforce “by as much as half,” The Associated Pressreports. A reduction in force that severe, charges former IRS Commissioner John Koskinen, would render the IRS “dysfunctional.”
The prime target of the ongoing IRS cutbacks: the agency’s Large Business and International office, the IRS division that specializes in auditing America’s highest-income individuals and the companies they run.
On average, researchers have concluded over recent years, every dollar the IRS spends auditing America’s richest ends up returning as much as $12 in new tax revenue. The current gutting of the agency’s most skilled staffers, tax analysts have told ProPublica, “will mean corporations and wealthy individuals face far less scrutiny when they file their tax returns, leading to more risk-taking and less money flowing into the U.S. treasury.”
Moves to “hamstring the IRS,” sums up former IRS Commissioner Koskinen, amount to “just a tax cut for tax cheats.”
Donald Trump, agrees the Institute on Taxation and Economic Policy’s Amy Hanauer, “is waging economic war on the vast majority of Americans, pushing to further slash taxes on the wealthiest and corporations, while sapping the public services that keep our communities strong.”
Public services like Social Security. Elon Musk has lately taken to deriding America’s most beloved federal program as a “Ponzi scheme,” and the Social Security Administration’s new leadership team, suitably inspired, has just announced plans to trim some 7,000 jobs from an agency “already at a 50-year staffing low.”
A vicious economic squeeze on America’s seniors. A massive tax-time giveaway for America’s richest. How can we start reversing those sorts of inequality-inducing dynamics? The veteran retirement analyst Teresa Ghilarducci has one fascinating suggestion.
Any individual’s annual earnings over $176,100 will this year, Ghilarducci points out, face not a dime of Social Security tax. A CEO making millions of dollars a year will pay no more in Social Security tax than a civil engineer making a mere $176,100.
If lawmakers removed that arbitrary $176,100 Social Security tax cap and subjected more categories of income—like capital gains—to Social Security tax, Ghilarducci reflects, we could ensure Social Security’s viability for decades to come and even make giant strides to totally ending poverty among all Social Security recipients.
And if we had just merely eliminated the Social Security tax cap on annual earnings in 2023, the most recent stats show, America’s 229 top earners would have paid more into Social Security that year than the 77% of American workers who took home under $57,000.
We could also apply Ghilarducci’s zesty tax-the-rich spirit to the broader global economy, as the inspiration behind France’s recent tax-the-rich moves, the economist Gabriel Zucman, has just observed in a piece that cleverly suggests “tariffs for oligarchs.’
The fortunes of our super rich, Zucman reminds us, “depend on access to global markets,” a reality that could leave these rich vulnerable at tax time. Nations subject to Trump’s new tariffs, he goes on to explain, could retaliate by taking an imaginative approach to taxing Corporate America’s super rich.
“In other words,” Zucman notes, “if Tesla wants to sell cars in Canada and Mexico, Elon Musk—Tesla’s primary shareholder—should be required to pay taxes in those jurisdictions.”
Taking that approach “could trigger a virtuous cycle.” The super rich would soon find relocating either their firms or their fortunes to low-tax jurisdictions a pointless endeavor. Any savings they might reap from such moves would get offset by the higher taxes they would owe in nations with major markets.
The current economic “race to the bottom,” Zucman quips, could essentially become “a race to the top” that “neutralizes tax competition, fights inequality, and protects our planet.”
Lawmakers in France have just shown they’re willing to start racing in that top-oriented direction. May their inspiration spread.
"These layoffs will significantly impair the agency's ability to answer the phones and provide good service to taxpayers and hamper the agency's ability to investigate wealthy and powerful tax cheats," said one advocate.
Following reporting that the Internal Revenue Service is preparing to cut as much as 50% of its workforce, advocates are sounding the alarm that those cuts would negatively impact regular Americans who pay taxes and diminish the agency's ability to audit wealthy tax evaders.
The plans to drastically reduce personnel at the IRS was first reported Tuesday by The New York Times, which cited unnamed sources familiar with the matter.
A reduction in force of tens of thousands of workers would render the agency "dysfunctional," John Koskinen, a former IRS commissioner, toldThe Associated Press.
The planned staff reductions at the IRS are part of a larger targeting of the federal workforce by the Trump administration. Billionaire Elon Musk, who U.S. President Donald Trump has deputized to help oversee the slashing of federal personnel and programs, has been central to that effort.
The Times reported that the Department of Government Efficiency "has taken a keen interest in the IRS in recent weeks" and two representatives from DOGE have been working from the agency's headquarters in Washington, D.C. "They have pushed for access to agency databases, including, most recently, one that has information about the agency's contractors," per the Times.
Ian Gary, executive director of the Financial Accountability and Corporate Transparency Coalition, blasted the reported plans to reduce IRS staff by half.
“A fair, transparent, and well-funded tax system is vital to a functioning democratic society," said Gary in a statement on Tuesday. "These cuts are also likely to disproportionately affect recent investments and hiring in the tax agency that have greatly improved its capacity to audit wealthy tax cheats and unscrupulous corporations. At the same time, such drastic staffing cuts will affect service levels for ordinary Americans."
Gary also said that the planned cuts "represent an existential threat to the revenues needed to operate the federal government."
The agency that nearly every working American adult interacts with each year has already experienced workforce reductions. There were some 100,000 workers at the IRS as of mid-January, according to theTimes. However, more than 7,000 probationary IRS employees have already been laid off, and thousands more have taken Musk's offer to resign.
"Those cuts, as well as normal attrition, are expected to count toward the Trump administration's goal of halving the number of people who work at the IRS," per the Times.
The executive director of the group Americans For Tax Fairness, David Kass, also denounced the news of the potential cuts: "These layoffs will significantly impair the agency's ability to answer the phones and provide good service to taxpayers and hamper the agency's ability to investigate wealthy and powerful tax cheats."
Kass also called the move a "blatant power grab—led by the Trump administration and the world's wealthiest individual— to deliberately weaken the IRS to further enrich themselves and their billionaire allies."
It was already known that the Trump administration's next move is to carry out mass "reduction in force" plans across agencies.
Last week the Office of Management and Budget and the Office of Personnel Management sent a memo to agency leaders giving them guidance on how to come up with "large-scale" reduction in force and reorganization plans that are due March 13. However, according to The Associated Press, "it is unclear whether the White House will approve the IRS' reorganization plan and over what period of time it would be implemented."
"Trump and Musk care far more about hamstringing the agency in charge of making sure their billionaire buddies pay their tax bills than they do about making tax season bearable for millions of taxpayers."
At the height of tax season, the chronically understaffed Internal Revenue Service is expected to begin firing more than 6,000 employees on Thursday as part of the Trump administration's large-scale and destructive assault on the federal civil service.
Government Executivereported that the terminations "are expected to affect probationary employees ranging from recent graduates to veterans to specialized auditors across all 50 states."
An unnamed IRS employee told the outlet that Thursday's firings are likely just the start.
"They want to keep cutting," the worker said.
The firings come days after one of billionaire Elon Musk's lieutenants reportedly gained access to a critical IRS system containing sensitive taxpayer data, raising widespread alarm. Musk has also taken aim at the agency's popular Direct File program.
On Wednesday, Trump's newly confirmed commerce secretary said the president's ultimate goal is to "abolish the Internal Revenue Service."
Elizabeth Pancotti, managing director of policy and advocacy at the Groundwork Collaborative, said in a statement that Trump and Musk are "gutting the IRS in the middle of tax filing season for one reason, and one reason alone: to let wealthy tax cheats off the hook."
"Trump and Musk care far more about hamstringing the agency in charge of making sure their billionaire buddies pay their tax bills than they do about making tax season bearable for millions of taxpayers," said Pancotti.
Groundwork noted that attacks on the IRS will likely have consequences that run directly counter to the stated objectives of the so-called Department of Government Efficiency, or DOGE.
"Recent research found that for every $1 spent on tax enforcement for the wealthy, taxpayers get an average return of $26," Groundwork observed.
Biden-era investments in the IRS, which Republicans starved of funding for years, yielded significant revenue from wealthy individuals, as the agency had the resources necessary to ramp up audit rates for the rich.
In a letter to top Trump administration officials earlier this week, Sen. Ron Wyden (D-Ore.) and other senators warned that the mass IRS terminations and hiring freeze could cause a "tax refund trainwreck."
"It is nearly inevitable that this hiring freeze, compounded by layoffs and further reductions in staff mandated as a result of Elon Musk's unprecedented power grab will delay refunds and degrade taxpayer service," the senators wrote. "Millions of Americans plan their budgets around timely refunds every filing season. These reckless decisions on the part of Elon Musk and the Trump administration will likely cause serious financial hardship for people across the country."