Increase the tax on death, mission impossible? Not so sure. A study shows that the French are open to a reform of inheritance tax, and even to it being higher for some.
It is an explosive subject. The idea of a reform of inheritance tax, a priori hated by the French because it is synonymous with death tax, is making a comeback in the public debate thanks to the presidential campaign where the candidates are competing with each other for proposals According to a recent survey published in The echoes, 81% of respondents believe that inheritance tax should be reduced. Alone 16% of respondents want it to be increased because inheritance is a source of inequality.
The return of the legacy
However, before Christmas, a note from the Economic Analysis Council (CAE), a body responsible for advising the government, once again observed that the current tax system reinforces inequalities in wealth and opportunity. Today, it is becoming essential to have inherited in order to have access to the highest standard of living, indicates the economist Camille Landais, one of the authors of the note. According to the CAE, the share of inherited wealth in total wealth now represents 60% compared to 35% at the start of the 1970s. reinforcement of property inequalities based on birth and whose magnitude is much higher than the inequalities observed for labor income.
The subject is sensitive: this tax is one of the most hated by the French, recalls the CAE, often through ignorance of its operation. The Economic Analysis Council points out that almost 90% successions in direct line therefore with at least one child heir are not taxed. Currently in France, inheritance is taxed on the death of a person, his heirs being taxed with a progressive rate according to the amount of inheritance transmitted.
Inheritance: who pays these controversial inheritance taxes, and how much?
The maquis of tax loopholes
But many allowances and exemptions allow, especially for the wealthiest, to reduce the amounts paid: transmission of professional assets, transmission of life insurance contracts or even dismemberment of ownership with donations in bare ownership with reserve of usufruct. Thus, the 0.1% of the population who will have received around 13 million euros in gross transmissions during their lifetime, only pay barely 10% inheritance tax on all of this inherited heritage, explains the CAE. So far from the marginal rate of 45% displayed by the scale beyond 1.8 million euros transmitted directly. In total, 40% of the assets transmitted escape the inheritance flow apprhend by the tax administration, underline the authors of the note.
|Taxable portion after abatement||Tax rate|
|Up to 8072||5%|
|From 8073 12109||10%|
|From 12110 15932||15%|
|From 15933 552324||20%|
|From 552325 902838||30%|
|From 902839 1805677||40%|
According to the results of a survey (1) unveiled on Monday by the Cercle des pargnants, 66% of respondents are in favor of the idea of make inheritance tax more progressive, so that the highest inheritances are the most taxable. In summary, yes a tax increase but for others!
Despite everything, if 58% say they are opposed to a reform that would aim to strengthen inheritance rights, this is much less than the 81% as in the survey distributed in The echoes. In the end, 42% of people questioned for the Cercle des pargants survey say they are in favor of an increase in inheritance tax. This is even the case of 50% of under 35s compared to 37% of those aged 60 and over.
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(1) Survey conducted by Ipsos online from January 12 to 16, 2022 among a representative sample of 1,000 French adults.