The logo of a notary on a facade, in 2019 (AFP / Archives / Pascal GUYOT)
Factor aggravating inequalities, the inheritance must be “rethought”, pleads Tuesday a note of the Council of Economic Analysis (CAE), which recommends to tax all the inheritance flows perceived by an individual during his life and to reduce the many current exemptions .
“Inheritance is once again becoming a determining factor in the constitution of heritage” in France, carrying with it “the risk of a profound disruption of equal opportunities”, hence the need for “in-depth reform” of its taxation, write the authors of this note published by the CAE, a research body responsible for advising the government.
In fifty years, the share of inherited wealth in total wealth has increased from 35% to 60% in France, they note.
Within a given generation, half of individuals will have inherited less than 70,000 euros in wealth throughout their lifetime, while the top 1% will inherit on average more than 4.2 million euros.
Inequalities in wealth are thus much higher than those in labor income, note the authors. In question: an inheritance tax in principle progressive, but “undermined” by exemptions and exemptions (life insurance, professional property, donations in bare ownership, etc.), which favor the largest transfers.
In total, “40% of the inheritance transmitted escapes the inheritance flow” apprehended by the tax administration.
The note therefore proposes to reduce or even eliminate these exemptions in order to improve the progressivity of the tax.
Like the OECD or the report by economists Olivier Blanchard and Jean Tirole recently submitted to the President of the Republic, the CAE also defends the idea of taxing inheritances no longer at the time of a person’s death, but on all sums or goods received by an individual throughout his life, such as donations for example.
An heir would pay the same amount of tax if he receives 700,000 euros from one of his parents on his death, or if he receives during his lifetime three donations of 100,000 euros (which can currently benefit from allowances) and 200,000 euros. of each of its parents upon their death.
This reform, which should be implemented “through a long transition period (from 10 to 18 years)”, should also include a “capital guarantee” for all, paid to the majority “to limit the inequalities more extreme “in access to training or housing in particular.
It would make it possible to collect between 9 billion and 19 billion euros of additional taxes, according to various simulations of implementation, conclude the authors.
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