It’s hard to imagine a more unpopular subject than the taxation of inheritance. It is difficult, however, to imagine a more consensual subject among economists, as heritage has become a determining factor in the concentration of heritage, since the beginning of the 1970s, in France as elsewhere in the West.
In the wake of the crisis due to Covid-19, some states, drained by months of budget support provided to their economies, have considered increasing the tax on inheritance, such as the United States, before backing down in the face of hostility triggered by such a measure. In France, this hot topic has not really emerged in the campaign, even if it is already dividing the candidates. The right and the far right propose to reduce the tax on inheritance – Marine Le Pen and Valérie Pécresse want to tax donations more regularly, Eric Zemmour wants to exempt family business transfers -, while on the left the candidate of France rebellious, Jean-Luc Mélenchon, proposes to cap the sums inherited at 12 million euros.
A “society of heirs”
However, many studies in recent months have pleaded in favor of a reform of the taxation of inheritance, such as the Blanchard-Tirole report, commissioned by the Elysée in 2020, as well as a study by the Organization for Economic Co-operation and Development, in May, which saw it as a way to reconstitute the revenues of the States after the health crisis. A new note, published Tuesday, December 21 by the Economic Analysis Council (CAE), an organization attached to Matignon, in turn aims to put the subject on the front of the stage in France. Its conclusions are clear: for the authors, France is in the process of once again becoming the “Society of heirs” that it was before the First World War. And the socio-fiscal system, which corrects income inequalities well, is much less effective in terms of wealth inequalities.
The phenomenon of concentration of wealth has particularly accelerated over the past thirty years, the study notes. The share of the richest 1% in total wealth thus increased from 15% to 25%, between 1985 and 2015, and inherited wealth now represents 60%, against 35% at the beginning of the 1970s. The average inheritance of the richest 0.1% represents 180 times the median inheritance in France, which amounts to 70,000 euros, it is said in an appendix to the note. “This gap is not observed when we look at labor income, notes the economist Camille Landais, one of the authors of the CAE note, with Clément Dherbécourt, Gabrielle Fack and Stéfanie Stantcheva. The ratio between median labor income and that of the top 0.1% paid barely exceeds 10. In fact, the top 0.1% is no longer accessible if we have not inherited. “
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