Tribune. The French taxation on the successions is ineffective and regressive because there are many exemptions that benefit mainly with major transmissions. Our country has, however, has long been the ambition to correct its system to make it more progressive: the higher marginal rate on the inheritance has doubled since the 1960s, from 20 to 45%. But behind this display, the fiscal niches have accumulated, and today, the richest in France pay only about 10% of inheritance rights on the whole heritage that is transmitted to them along their life. Conversely, succession duties weigh on the upper middle classes. It must probably be remembered that 10% of the French do not herit, that half of them inherits less than 70 000 euros and that the inheritance is very concentrated on the top of the ladder. This concentration is not unrelated to the regression observed since fifty years: the inherited fortune represented one-third of the French heritage in the 1970s, while today it represents 60%.
This is the return of the Society of heirs, documented by a note noted by the Economic Analysis Council (CAE), “ Rethinking the inheritance “, published in December 2021. With the authors made several concrete proposals for a “new policy inheritance “. In summary, by removing the four main French fiscal niches, the state could lift more tax revenue and reduce the rights of inheritance for a majority of French. In other words, if the rates displayed were applied, we could not only improve the yield of this tax (its effectiveness), but also make it really progressive.
The French situation on the successions covers several characteristics of the current economic regime: a hyper-concentration of heritage on a portion congruous of individuals and companies, and a great capacity of these happy few to escape the tax by Legal tax strategies, based on exemptions or artificial transfer to complacent jurisdictions (what is called “tax avoidance”). Many public economy work accurately document the concentration of wealth at the top of the scale, tax avoidance and associated tax revenue losses.
Tax recipes
The economic debate should move gradually on the macroeconomic consequences of this concentration of wealth and the loss of associated tax revenue. The crisis due to COVID-19 has reactivated public expenditure around the world, without the thought of revenues to finance them. In France, for example, the government has relentlessly posted a willingness to “do not increase taxes”. However, the 10 billion euros of tax revenue that “the new legacy policy” proposed by the CAE would, for example, to respect the commitment, for the non-credible time, taken by the Government in the Finance Act 2022 to amortize the debt due to the CVID-19-year crisis (“ Economic expertise and public policy: critical examination of the proposals on the debt related to the pandemic “, political economy n o 93, February 2022). Public spending will naturally increase over the next three decades, which should be marked by extreme events, according to the latest report of the Intergovernmental Panel on Climate Change. In addition to the insurer state (partial unemployment) and protective (vaccine, tests), the anticipatory state must also finance public expenditure on education and research to ensure the necessary bifurcation of the growth plan to a neutral scheme in carbon emissions .
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