The Impôt de Solidarité sur la Fortune (ISF, or wealth solidarity tax), is easily the most controversial part of French tax policy, and its removal by Emmanuel Macron was probably the most controversial decision of his term so far, and a major cause of the Gilets Jaunes protests which, at the time this question is written, show no sign of stopping.

There have been many contradictory statements made about the ISF:

  • That removing the tax was a gift to the super-rich.
  • That the tax only affected the moderately rich, and that the super-rich used fiscal trickery to evade it.
  • That the tax disincentivized investment, and created perverse incentives for company owners.
  • That the tax was a long-term loss for France, because it encouraged capital holders (including startup creators) to leave the country and thus created a loss in revenue / value-added tax
  • That the exile of capital holders wasn't that great, and reversing it wouldn't be worth the losses in tax profit.

With all this contradictory information circulating (on a very emotionally charged subject), it's really hard to get an accurate picture of the situation.

To the best of your knowledge, what were the benefits and costs of the ISF for the French economy, and how much evidence is there that these benefits and costs were real?

  • Note that this is different from this question: politics.stackexchange.com/questions/21830/… where the question and answer discuss a potential Romanian policy. Commented Dec 4, 2018 at 14:31
  • 1
    As far as I know the Gilets Jaunes protest were sparked by a fuel tax increase not anything related to ISF. Commented Dec 4, 2018 at 22:35
  • 3
    Kind of. Everyone pretty much agrees the oil tax was a "straw that broke the camel's back" thing, and people were protesting against fiscal injustice in general. Basically, every time Macron announces a tax change, people think "he lowered taxes for the rich, why the hell is he taxing us more?" Commented Dec 4, 2018 at 22:57
  • "...the most controversial part of French tax policy..." And I thought that was the increase in the gasoline tax (at least judging by the number of protesters). Commented Jan 22, 2019 at 12:23
  • See my comment above. Commented Jan 22, 2019 at 12:30

1 Answer 1


Some other pro/cons, not often cited (they are a bit more technical / philosophical):

  • (pro) Taxing wealth promote risk taking in the investment choices (if you tax at 1%, you need to invest in a way that it will gain at least 1% + inflation if you do not want to loose money), which is supposed to be good, at least to a certain extend, for the economy (you promote investments in companies, startups...).
  • (con) Taxing wealth is double-taxing (supposedly wealth originates from some income that was already taxed), which is not very fair.
  • (con) The inflation-adjusted tax rate is highly dependent on the rate of inflation, and is somehow arbitrary.
  • Thank you for your answer. Nonetheless, the question was about the positive and negative effects of the tax, not about whether or not it's fair, so points 2 and 3 are somewhat off-topic. Commented Jan 22, 2019 at 11:48
  • An unfair taxation system has some psychological effects on the society. That's the reason why for example ISF is view unfavorably by many economists. As for the influence on inflation on the real tax rate, the effect is lack of long-term visibility on the real effect of the tax system, which is bad from the point of view of investors. Commented Jan 22, 2019 at 13:32

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