France’s tax on top earners, introduced in 2025, is projected to raise far less than initially forecast, underscoring how difficult it can be for governments to extract more revenue from the wealthy once taxpayers have time to adjust.

Implementation timing, tax-base definition, legal constraints, and taxpayer behavior play a decisive role in whether such policies deliver on their revenue promises.

Christine Alexis Concepción, an international tax and estate planning attorney and partner at Concepción Global, told The Epoch Times that France’s experience should serve as a warning for U.S. lawmakers considering similar policies, including the 2026 Billionaire Tax Act, proposed in California.

“High earners already have sophisticated tax counsel, or they’re very mobile and very agile,“ she said. ”They’re going to make changes to their finances, to their investments, that are going to reduce these onerous taxes.”

French High-Income Surtax

First conceived under former French Prime Minister Michel Barnier, the “differential contribution on high incomes” was introduced in the 2025 budget adopted in February 2025.

This levy applies to households domiciled in France whose reference income for 2025 exceeds 250,000 euros ($294,650) for single, widowed, separated, or divorced taxpayers, and 500,000 euros ($589,300) for taxpayers filing jointly, provided their average tax rate is less than 20 percent.

The French Finance Ministry expects the levy to generate about 650 million euros ($700 million) this year, down sharply from the 1.65 billion euros ($1.96 billion) first estimated, according to a report by Le Monde.

The shortfall follows a similarly weak performance in its first year, the paper said. Originally, French officials expected the levy to raise 1.9 billion euros ($2.26 billion) in its first year. Instead, it brought in about 400 million euros ($476 million), according to Le Monde.

The main reason, French officials say, was timing.

In a Jan. 29 email to The Epoch Times, the French Finance Ministry said the tax had initially been designed to apply to income earned in 2024 and paid in 2025.

“The Barnier government’s censorship and the absence of a finance law on January 1 made this legally impossible. It therefore had to be applied to 2025 income, for the year 2025,” the ministry stated.

“This delay allowed some to optimize their tax situation by anticipating dividend payments between the censure and December 31.

“This is an effect that we identified and which led to a lower return.”

Officials also pointed to possible technical issues.

“There may also be an issue with the payment method: advance payment followed by adjustment, which is not the most common practice, and may also be something we need to change,” the ministry stated.

“To do this, we need to see how things go this year, without the possibility of optimization in particular. We are now working on the best terms for the future. We will decide on the simplest and fairest solution after the income tax return in the spring.”

Wealth Tax Proposals in the US

The California Billionaire Tax Act ballot initiative would impose a one-time 5 percent tax on the net worth of residents whose wealth exceeds $1.1 billion and who live in the state as of Jan. 1, 2026.

The measure would apply to certain individuals and trusts and would be based on net worth as of Dec. 31, 2026.

If approved by voters in November, the measure would amend the state constitution, according to an analysis published by Baker Botts, a law firm, on Dec. 12, 2025.

The proposed wealth tax was initiated in November 2025 by the Service Employees International Union–United Healthcare Workers West, a labor union representing health care workers.

According to the initiative text, California is home to roughly 200 billionaires with a combined net worth of approximately $2 trillion. Supporters have said that part of the revenue would help offset a projected $19 billion loss in federal funding for Medi-Cal.

Concepción said opposition to such taxes is not necessarily a rejection of social spending.

“It’s not necessarily about being opposed to donating money to social problems. It’s about being told how to allocate your money by the government,” she said.

New York City Mayor Zohran Mamdani, in his election campaign, proposed a 2 percent surcharge on the city’s personal income tax for residents earning more than $1 million a year, a plan he and his campaign estimated could generate about $4 billion a year to help fund expanded public services and affordability initiatives.

The tax cannot take effect without authorization from the New York Legislature and New York Gov. Kathy Hochul, who, during her budget address on Jan. 13, rebuffed the idea of taxing the rich.

“We’re able to make transformative investments in our future,“ Hochul said. ”Without raising taxes. Without saddling the next generation with mounds of debt.”

Taxpayer Behavior

Several prominent technology executives have weighed in on California’s proposed billionaire tax.

In a Jan. 7 post on X, LinkedIn cofounder Reid Hoffman described the measure as “badly designed in so many ways.”

“Poorly designed taxes incentivize avoidance, capital flight, and distortions that ultimately raise less revenue,” Hoffman said.

Google cofounders Larry Page and Sergey Brin relocated some of their companies out of California at the end of 2025, according to California business filings.

In December 2025, PayPal and Palantir cofounder Peter Thiel donated $3 million to the California Business Roundtable, which opposes the initiative, and expanded his presence in Miami.

Concepción said Thiel’s Florida real estate purchases are “not a coincidence,” describing them as “a direct reaction” to California’s tax climate.

Nvidia CEO Jensen Huang has expressed less concern, saying on a Jan. 6 Bloomberg podcast that he is “perfectly fine” with whatever taxes the state adopts.

Michael Ashley Schulman, partner and chief investment officer at Running Point Capital Advisors, a Southern California-based wealth management firm, has warned that the proposed billionaire tax could trigger a significant brain drain from California.

“While the state’s innovation engine and talent density remain world-class, aggressive tax policies risk pushing the very individuals who fuel that growth toward more tax-friendly jurisdictions like Texas or Florida,” he told The Epoch Times.

Schulman cautioned that the departure of high-net-worth residents would have ripple effects beyond the loss of a wealth tax.

“If billionaires leave, your wealth tax disappears, your state income tax declines, and inevitably in-state spending declines causing a decrease in business revenue and sales tax,“ Schulman said. ”The threat alone matters because uncertainty is its own tax.”

He also warned about a possible rise in preemptive migration.

“The real risk is losing the next generation of innovators before they even scale,” he said.

Legal constraints may also shape the outcome of a California tax measure. Concepción said retroactive application could be one way to limit avoidance but warned that its constitutionality would be tested in court.

She said governments must consider whether laws are federal or state-based and whether constitutions permit immediate or retroactive application.

Budget Balance

In Paris, the government continues to run substantial budget deficits.

In 2024, the general government deficit was about 5.8 percent of gross domestic product (GDP), one of the widest among major economies and well above the European Union’s target of 3 percent, according to a March 2025 report by the national statistics agency INSEE.

French Prime Minister Sébastian Lecornu said in a Jan. 31 post on X that France projects that its public deficit will shrink to 5 percent of GDP in 2026, down from 5.4 percent in 2025 and 5.8 percent in 2024.

As part of ongoing debates on how to tackle a growing public deficit, a left-wing bloc made up of the socialist, communist, and green parties and the France Unbowed party had proposed a minimum 2 percent annual wealth tax on individuals worth more than 100 million euros, dubbed the “Zucman tax” after the French economist who devised it.

However, the National Assembly rejected the proposal in October 2025.

“We have run up against a simple arithmetic reality: 35 [percent] of the Assembly on the left does not constitute the majority necessary to adopt these measures,” French socialist lawmaker Hervé Saulignac told lawmakers on Feb. 2.

Concepción said the broader issue is fiscal discipline rather than taxation levels.

“The only real reason why governments implement these onerous taxes on high net worth individuals is because they simply cannot balance a budget. They start spending money on, on things that they really shouldn’t be spending on,” Concepción said.

“High-net-worth individuals ... are just going to pick up and leave, or they’re going to restructure to avoid this.”