The Economist.
Hello, Mike Bird here, co-host of Money Talks,
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Welcome to Editor's Picks.
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France is in a giant fiscal hole.
This year the government will run a deficit,
where its spending exceeds its revenues, of €160bn ($190bn, or more than 5% of gdp).
Investors in its bonds are nervous; politicians need to close the gap.
Left-leaning economists, and a growing number of centrist ones, believe that a wealth tax is part of the answer.
Gabriel Zucman of the Paris School of Economics,
for instance, has proposed an annual levy of at least 2% on fortunes larger than €100m.
Although the arguments of economists today are subtler than those normally used to support levies on wealth,
they are just as wrongheaded.
A dozen oecd countries had wealth taxes in 1990, but over time the approach has fallen out of favour.
Austria abolished its wealth tax in 1994, Germany in 1997 and Sweden in 2007.
Even France followed suit in 2018.
Only three rich countries—Norway, Spain and Switzerland—still have a tax on net wealth.
Politicians abandoned such taxes because they did not work.