From the Zucman Tax to the Piketty Tax: The Great Fiscal Outbidding Against Billionaires

Through op-eds, televised debates, and lengthy exposés on the social media platform X, discussions grew fierce in California ahead of the November 3 vote on "Proposition 40." The intensity matched the scale of this unprecedented measure: the introduction of a one-time 5% tax on the wealth of billionaires residing in the state as of January 1, 2026. The concept was directly inspired by the work of Gabriel Zucman, a star left-wing economist and Berkeley professor, along with his colleague Emmanuel Saez.

The argument put forward by the two French economists had already run into a straightforward objection: to avoid paying, the individuals concerned pack their bags. Across the United States, this major migration has been underway for several years. In terms of Fortune 500 headquarters—the ranking of the 500 largest American corporations—Texas recently dethroned California, where taxes have risen. Since the announcement of this additional tax proposal, seven more billionaires have packed up and left. Among them are Palantir board chairman Peter Thiel, as well as Google co-founders Larry Page and Sergey Brin, who departed the Golden State last year.

$39 Billion in Net Losses

In a report published in early October, Joshua Rauh and Benjamin Jaros of Stanford University and the Hoover Institution think tank estimated that the seven departures of billionaires recorded between the filing of the initiative and the reference date of January 1, 2026, had reduced the tax base by approximately 30%. They calculate that, ultimately, this new levy would inflict a net loss of $38.9 billion on California state coffers. This serves as another illustration of Arthur Laffer's famous curve, commonly summarized by the adage "too much tax kills tax." "Our estimate is not even a worst-case scenario, but an average across all possible outcomes," Joshua Rauh told L'Express. "Our opponents claim that the story of wealth taxation doesn't end here; we answer that neither does the story of departures from California." This is without factoring in the jobs and investments they take with them.

Beyond legal questions concerning its retroactivity, the tax raises numerous concerns. According to the Hoover Institution duo, taxpayers view it as the starting point of a lasting wealth taxation regime rather than a one-time levy. "Nothing is so permanent as a temporary government program," Milton Friedman once wrote. This interpretation drew a sharp reaction from Gabriel Zucman. Maintaining the assumption that the tax is exceptional, he argues that leaving is "not rational." As he concluded in a tweet: "Either the tax is annual—in which case it generates revenue every year, and some billionaires will leave the country. Or it is a one-off—in which case it generates revenue in a single year, and there is no point in leaving. It cannot be both at the same time."

Yet 9,000 kilometers away from the Californian palm trees, this is precisely the idea pursued by Thomas Piketty, Gabriel Zucman’s thesis supervisor in 2013. Since June, the author of Capital in the Twenty-First Century (2013) has championed a dual tax: on the one hand, a permanent annual 5% tax on fortunes exceeding €100 million (rising to 10% above €1 billion); on the other, an exceptional 50% tax on wealth accumulated in excess of €100 million over the past decade. According to his calculations, this would generate €800 billion in revenue over ten years. His source of inspiration? The national solidarity tax instituted in the aftermath of World War II... "Invoking a measure from 1945 in today's context makes little sense," says Jean-Philippe Delsol, president of the classical-liberal think tank Iref. "The logic back then was notably to punish those who had profited from the war to enrich themselves. Moreover, the legal framework was completely different from ours, with no Constitutional Council, which was only established in 1958."

Retroactivity, Confiscation…

Faced with the risk of capital flight, the economist believes he has found the magic bullet: his 50% tax targets past wealth accumulation from 2017 to 2027. This has raised eyebrows among tax law specialists. "While retroactivity in tax matters is not in itself contrary to the Constitution, it must be justified by an adequate public interest objective—one that is not merely financial—and, in most cases, must apply only from the date of public announcement," explains Martin Collet, professor of public law at Paris-Panthéon-Assas University. "A wealth tax announced today cannot therefore reach back to 2017."

Another central issue is its confiscatory nature. Unlike income, no specific threshold exists for wealth taxation: "Everything hinges on assessing the point beyond which the ability to pay is impaired in a manner deemed 'excessive,'" notes Martin Collet. This is where the real problem lies. Like Zucman’s model, the Piketty tax allows the levy to be paid in company shares, which would then be transferred into a sovereign wealth fund. Yet "constitutional law is clear: you can only tax an individual's ability to pay, in other words what they have on hand to settle the bill," details Anne-Charlène Bezzina, lecturer at the University of Rouen and Sciences Po. "Forcing you to surrender part of your undistributed wealth, such as company shares, to pay a tax constitutes confiscation and is therefore unconstitutional."

Bypassing "Pseudo-Arguments"

However, Thomas Piketty has more than one card up his sleeve. To circumvent the constitutional judges, he intends to rely on a referendum. Article 11 of the Constitution provides that a proposed measure must be a "reform relating to economic, social, or environmental policy." In the case of a shared-initiative referendum, the Constitutional Council rules on this qualification. "Two of its decisions, in 2022 and 2023, determined that an isolated fiscal measure could not be the subject of a referendum," recalls Denys de Béchillon, professor emeritus and columnist for L'Express. But in the case of a presidential referendum, "there is no barrier to passing a measure that does not satisfy this requirement, as the Constitutional Council does not exercise prior review," explains Anne-Charlène Bezzina.

The irony of the situation: by dismissing the "legal pseudo-arguments" that might be leveled against him, Thomas Piketty is employing the very method he condemns when used by the National Rally and its referendum on immigration. "The positioning of the radical left is fascinating because it resorts to the same kind of legal sleights of hand as the far right: fueling the fantasy that a referendum under Article 11 allows one to overcome the worst constitutional monstrosities in a bill," summarizes Denys de Béchillon.

The proposal by Thomas Piketty forms part of a wider economic escalation on the left, where traditional taboos appear to have collapsed—ranging from calls to "burn" the public debt to a fluid definition of private property. Are Articles 2 and 17 of the Declaration of the Rights of Man and of the Citizen also merely "pseudo-arguments"?