In a new wealth reportthe Observatory of Inequalities continues its advocacy begun in 2020 in favor of the adoption of a “wealth threshold”. Arguing that it is ineffective to focus solely on the “ultra-rich”, the association produces original statistics on the wealthy population in France, defined as those whose disposable income is more than twice the median standard of living – the one who divides the population in two, half earning less and the other more. This choice to establish a threshold equal to twice the median income is inspired by Germany where, the report notes, the government began to refer to a wealth threshold twenty years ago.
In 2019, according to the most recent data, this median standard of living was 1,837 euros for a single person, after taxes and social benefits. The wealth threshold set by the organization is therefore equivalent to 3,673 euros per person, still after taxes and benefits, 5,500 euros for a couple without children and 7,700 euros for a couple with two children.
A “wealth threshold” of 3,700 euros in income per person
Once this threshold has been retained, it is possible to calculate the number of people in the upper brackets based on the tax and social income surveys produced by the National Institute of Statistics and Economic Studies (Insee) – on the information base from 50,000 households, from which tax data was retrieved, and from social organisations. In 2019, 4.5 million French people (7.1% of the population) thus had incomes equal to or greater than these amounts, i.e. a drop of 745,000 people between 2010 and 2019. “This decade follows a prosperous period for the wealthiest”, warns the report.
INSEE is thus interested in the high and very high earnerscategorized as the top 10% or top 1% – the bottom decile and bottom income percentile. Sticking to the richest 1% or 10% has a limit: we only observe, by definition, 1% or 10% of the population, where wealth thresholds make it possible to follow the evolution of the number of people above certain incomes”underlines the economist Pierre Madec, of the French Observatory of economic conditions, who was asked by the Observatory of inequalities as part of his report.
The limits of the “wealth threshold”
The limits of the “wealth threshold” are numerous: with similar incomes, the situation of a tenant family in a large city with high rents is, for example, incomparable to that of a landlord without debt in a small town.
The organization recognizes these limits and assumes that it wants first to contribute to the debate on the apprehension of wealth. This would mean, on the one hand, empowering the richest 7% to 10%, and not just the “1%”; on the other hand, to have a tool for monitoring public policies. Pierre Madec explains:
“The poverty line is the result of important international discussions: public policy bodies agreed at European level to set it at 60% of the median income. This does not preclude sometimes resorting to a threshold of 40% or 50% of the median income. A threshold is always arbitrary. But we have ultimately of a tool. We can, for example, observe how the poverty rate reacts when we touch on social benefits. The difficulty remains that we cannot “limit” wealth, unlike poverty, which is between zero and around 1,000 euros of disposable income. The heterogeneity is very large between a person with 3,700 euros in income and someone like Bernard Arnault. »
To remedy this, the Observatory pleads, in its report, for the establishment of several wealth thresholds distinguishing the rich from the “super-rich” and the “ultra-rich”. The authors insist on the need to monitor and cross-reference a plurality of indicators, in the same way that poverty is apprehended not only with a threshold, but also by measuring its “intensity” or by the ” living conditions “ (e.g. what consumer goods does a household give up in the face of financial hardship).
Understanding the lifestyle
The Inequalities Observatory thus calls on economists and statistical organizations to monitor and produce more data on ” living conditions “sometimes called ” lifestyle “ rich people. “To measure the true standard of living, we could add to the income of households that own their homes, the equivalent of the value of the rents that they do not pay, unlike others. For tenants, one could imagine taking into account the place of residence because of the differences in rents. » The organization still believes that certain criteria such as age, income stability or even having a civil service status should be added to the wealth threshold.
In the meantime, he compiles various studies, often incomplete, allowing us to understand “the very comfortable life of the wealthiest people, from the wealth threshold of 3,700 euros monthly after taxes”. It is about housing, travel, access to personal services, sports or diplomas. On transport, for example, the report cites the Ministry of Transport, according to which “the most advantaged 10% made nine trips of more than 80 kilometers in the year for personal reasons and traveled almost 15,000 kilometers, compared to three trips and 3,200 kilometers at the bottom of the scale”.
Finally, the organization insists on heritage: “We should also be able to produce an indicator relating to income and wealth combined. » Both are, for the moment, studied separately and the data are missing:
“In the absence of a wealth threshold accepted by INSEE, we do not know the evolution of the number of wealthy households, that is to say rich in heritage. The only index, the number of households taxed for their large real estate fortune (at least 1.3 million euros of real estate after abatement) increased again by 8% between 2018 and 2020, after a 23% increase in the number of households. liable for the old wealth tax, between 2011 and 2017.
Insee, which we asked to understand why it did not use a “threshold of wealth”, replied that the “election reserve period” did not allow him to proceed.