Vwhere the “death tax” resurfaces! The reform of inheritance rights is one of the subjects that politicians in power are careful not to propose, for fear of an almost unanimous rejection of public opinion. Never mind, the commission chaired by Olivier Blanchard, former chief economist of the International Monetary Fund, and Jean Tirole, Nobel laureate in economics, proposed it in the report on “major economic challenges” submitted on Wednesday June 23 to Emmanuel Macron. And she did it in the name of a just cause: the reduction of inequalities at birth, very strong in a country where destinies are drawn from an early age.
A “tax on death”? Precisely no. Dani Rodrik and Stefanie Stantcheva, the two Harvard professors co-signers of the chapter on inequalities, plead for an overhaul that taxes the living. “The logic of equal opportunities implies taking an interest not in those who give but in those who receive, taking as the tax base the total amount received by the beneficiary”, they write. This progressive tax with a very broad base would have few exemptions, today very generous for life insurance and the transfer of important companies.
In this sensitive matter, the consent of citizens is needed more than with any other tax reform. For the “Make more popular” to French people overwhelmingly (87%) hostile to any increase, it must be avoided that it is perceived as an attack on the family and a plunder of those who have “worked hard”. Taxpayers would benefit from a much larger allowance than the current 100,000 euros per descendant in order not to penalize children from the middle classes. In a bill tabled at the end of 2020, the Socialist deputies suggested a threshold of 300,000 euros and a marginal rate of 60% beyond 1.9 million euros of inheritance transmitted, or a tiny minority of inheritances.
It is equally imperative, according to Mr Rodrik and Ms Stantcheva, to highlight the redistributive virtues of the reform. So they recommend doing “A breach of the principles of public finances” and to explicitly pre-allocate the proceeds to early childhood, where part of the future is at stake, or to a “Individual account” in favor of young people from the working classes. The report recalls that while a majority of French people regret that “The inequality of opportunity at birth due to different endowments constitutes an injustice”, nearly nine in ten reject any increase in the inheritance tax.
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