“I would like to eliminate, for the vast majority of our compatriots, these unfair taxes which are inheritance taxes. » Two lies told in 121 signs, great performance for this tweet from Marine Le Pen, published on the social network X, February 5, 2022.
Regardless, the RN persists and signs in its (meager) program for the legislative elections, unveiled on June 24, 2024. Jordan Bardella announces that he wants “remove taxes on direct inheritance for low-income families and the middle classes” et “exempt donations from parents and grandparents to their children and grandchildren up to 100,000 euros per descendant every 10 ans ». Without further details.
Are inheritance taxes unfair? We think we’re dreaming! It’s quite the opposite… Let’s recall some obvious facts: wealth inequalities are much higher than salary inequalities.
As the Observatory of Inequalities recalled in its recent “Report on the rich in France”, the 10 % of the wealthiest hold almost half of the total wealth. For their part, the 10 % of the least fortunate own…nothing, or almost nothing (0.1 % you total).
According to the European Central Bank, the average wealth of 10 % of the wealthiest households in France was 2.5 million euros in the second quarter of 2023, up 53 % compared to 2009. It is 32 times more than the least well-endowed half of the population.
Increasingly concentrated in the hands of a few, this heritage is not liquidated at the end of its life, but transmitted to following generations. Result, as economist Guillaume Allègre notes, “the share of inherited heritage in the total heritage of the French has also increased”.
Nothing confiscatory
Faced with this situation which, as it turns out, is indeed unfair, inheritance taxes and gift taxes are powerless to reduce inheritance inequalities. They bring in around 15 billion euros per year (i.e. 0.6 point of GDP), which only represents 5 % of the economic value of assets transferred annually (300 billions). Nothing confiscatory, quite the contrary.
If this return is so low, it is because inheritance taxes and donations are far, very far from affecting “the vast majority of our compatriots”as Marine Le Pen claims.
To be able to pay tax on your inheritance, you still have to receive one
To be able to pay tax on your inheritance, you must still receive one. However, according to INSEE, in 2018, only 37 % of households had already inherited, and 18 % had received a donation.
These lucky people are not part of the modest and middle-class families that the RN targets in its program: the net wealth of households where a member has received an inheritance during their life is 355,000 euros on average (compared to 239,900 euros on average in the entire population).
355 000 euros, it is just above the wealth threshold in assets, set by the Observatory of Inequalities, at 354,000 euros, or double the median wealth. Households having received a donation have even higher assets: 472,300 euros. And 24 % of recipient households are part of the 10 % of the wealthiest.
Among this minority of heirs, those who received significant amounts are even fewer. Only 19 % of donations and 12.9 % of inheritances exceed 100,000 euros.
We find no trace of a worker among these lucky people (again according to INSEE), but this concerns 17.2 % of executives and 27.3 % of liberal professions.
The taxation of transfers is undermined by exemptions and exonerations, which allow the rich to avoid sharing this money that they have not earned by the sweat of their brow.
In short, not everyone receives an inheritance, even less if it is a large amount. And among this lucky few, few pay taxes.
Because French taxation on transmissions is undermined by exemptions and waivers, which allow the rich not to share this money that they have not earned through the sweat of their brow. Thus, the Observatory of Inequalities has shown that a couple with two children can pass on up to one million euros to their offspring without paying tax!
Each parent can in fact deduct 100,000 euros per child from the inheritance subject to tax. Or 400,000 euros for a couple with two children.
That’s not all: by thinking ahead a little, each parent can give 100,000 euros to each child every fifteen years without paying tax. An already very generous provision (with the richest).
But this is not enough for Jordan Bardella who wants to make these donations possible more frequently (every 10 years instead of every 15 years) and offer the same advantage to grandparents who want to give money to their grandchildren . A real jackpot !
Rooting of social positions
Such a policy would further enlarge the size of the multiple holes already existing in the inheritance tax system: each parent can thus give, in addition to the provisions that we have just mentioned, 32,000 euros to each child at title of “family donations of sums of money”.
In total, if you do it right, 928,000 euros of assets can be passed on from one generation to the next without any tax. “Let’s measure carefully what that means: less than 3 or 4 % of French households own such an amount”insists the Observatory of Inequalities.
The low effectiveness of inheritance taxation is confirmed by a report from the Economic Analysis Council:
« At the top of the distribution, the top 0.1% of each cohort, who will have received around 13 million euros in gross transfers over their lifetime, pay barely 10% inheritance tax on the all of this inherited heritage, far from the marginal rate of 45%. »
A note from the General Directorate of the Treasury, at the Ministry of the Economy, gives a comparable order of magnitude: in a direct line, that is to say between parents and children, the average tax rate reaches 15 % for inheritances of more than one million euros. Here again, it is well below the gross scale.
By opportunistically riding opinion polls, the far-right party is actually proposing to make the rich even richer
In reality, where inheritance taxes can be high, it is indirectly, that is to say when it does not directly concern children (uncles or aunts, friends, etc.).
If the RN proposes to go even further in reductions and other exemptions on inheritance taxes, it is because the inheritance tax remains very unpopular. But by conveniently riding opinion polls, the far-right party is actually proposing to make the rich even richer.
Ironically, the chapter of the RN program which contains these proposals on inheritance rights is entitled “rooting French families”. The message sent is clear: it is about entrenching inequalities and freezing social positions from one generation to the next.
Find our series “The 10 main untruths of the National Rally »
