Source: French to English Tester Published on: 2026-05-12
Source: The Conversation – in French– By Julien Pillot, Teacher-Researcher in Economics, INSEEC Grande École
A majority of French people want a reduction in inheritance taxes. Two opposing views exist: reduce inequalities from birth by taxing more, or decrease the inheritance tax to reward those who work all their lives for their descendants. But what exactly are we talking about? What amounts? Who is concerned? What are the trends?
“Heritages are passed down from generation to generation, you know, that thing that falls from the sky. There comes a time when that’s enough!” It is with thesewords spokenIt was on October 15th that the President of the National Assembly, Yaël Braun-Pivet, revived the long-standing issue of inheritance taxation.
A societal debate that leaves no one indifferent. If the French mostly support a reduction in inheritance taxes –84% in an April 2024 survey–, in fact, only a minority is actually concerned by the payment of these. For example, in a direct line (parents-children),only 13% of householdswhose inheritance amount exceeds €100,000 are subject to the payment of inheritance taxes.
Today, the scale of the amounts at stake is unprecedented. The “great transfer” of wealth held by the baby-boom generations is estimated at9,000 billion euros by 2040.
This article aims to set out the terms of a debate that goes far beyond the scope of economic analysis to embrace moral, philosophical, and political dimensions.
What are we talking about?
Created inFrance in 1791, inheritance taxes the portion of the inheritance received by each heir, depending on their relationship to the deceased.
Specifically, the inheritance tax scale provides:
A rate of 5% below €8,072 up to 45% beyond 1.805 million euros for children and grandchildren, according to the value of the inherited property;
30 to 45% for siblings depending on the value of the inherited assets;
55% for nephews, nieces, and other relatives up to the 4theAt inclusive degree;
60% for parents beyond 4eDegree or people without kinship;
And an exemption for the spouse.
Somepersonal allowancesare possible, provided that the heirs have not already benefited from it in the 15 years preceding the death as part of a“living donation”. They are €100,000 for a child, a father or a mother, €15,932 for a brother or a sister, €7,967 for a nephew or a niece, and €1,594 in the absence of any other applicable allowance.
In recent years, the increase in inheritance tax revenue has been spectacular, rising from 7 billion euros in 2011 to 16.6 billion euros in 2023. The main reasons for this increase are naturally to be found in the mortality of an aging population, but also in the rise in the value of assets, with real estate leading the way.
France taxes more than its neighbors
France has one of the highest rates of taxation, both theoretical and effective, in the world. With a score of 0.74% in 2021, the share of inheritance and gift taxes, expressed as a percentage of GDP, is the highest among all OECD countries.
Moreover, while the trend toward taxing inheritances is declining in developed countries, France shows a significant increase along with South Korea. Many countries have chosen to abolish inheritance taxes, including Canada before 1980, India in 1985, Austria in 2008, Hungary in 2010, and Norway in 2014. The reasons cited by these states: to present an attractive tax system and to encourage saving and investment.
Liberal vs social vision
The argument that it would be unfair to tax the savings made after a life of contributing to the welfare state is very often raised in the debate when citizens are given the floor, as highlighted by theresearcher Stefanie Stantcheva. Economists, for their part, frame the terms of the debate differently. To simplify, we could speak of a confrontation between two schools of thought.
Liberal: counterproductive taxation
The inheritance tax would discourage individuals from being as productive as possible during their lifetime. This underutilization of the individual’s full potential, in both production and investment, would eventually exhaust the production of national wealth, to the detriment of all, starting with the working classes most dependent on redistribution mechanisms.
This vision is supported by economists such as Milton Friedman, Gary Becker, Robert Barro, Thomas Sowell, or James Buchanan.
Social: reducing inequalities at birth
This view holds that the taxation of inheritances, especially in a context where capital income is predominant, would allow more individuals to realize their full potential through a better redistribution of wealth.
It is supported by economists such as Thomas Piketty, Anthony Atkinson, Joseph Stiglitz, Emmanuel Saez, or Gabriel Zucman.
Studies break down prejudices
In an open world where states do not hesitate to engage in tax competition to attract capital, high net worth individuals could relocate to regions deemed more welcoming, in order to escape inheritance tax. In theirstudy, economists Enrico Moretti and Daniel J. Wilsonhighlight a barely significant effect of tax differences on the location choices of high-net-worth individuals.
Also to read:
Inheritance taxes: a necessary reform?
Economists Jonathan Goupille-Lebret and Jose Infante, for their part,interestedOn the impact of the increase in the inheritance tax rate on the value of the transferred estate. They observe a real, but moderate substitution effect. A 10% increase in inheritance duties would result inall other things being equalby a 2.5% decrease in the value of the inherited estate. These results can be explained by the lack of preparation of certain inheritances, particularly in the event of premature death, or by the fact that the taxes in question will have to be paid by the heirs without affecting the individual’s standard of living.
If the effects of an increase in inheritance taxes on individual behaviors are not well documented, their effect on the ability of populations benefiting from redistribution to significantly improve their standard of living, and to enjoy real social mobility, is also not really demonstrated. Even economists such as Gregory Mankiw or James Mirrlees,a prioriin favor of inheritance taxation, acknowledge that this cannot be done without seriously studying the potential counterproductive effects they could cause.
60% of French people overestimate the inheritance tax
Many exemption mechanisms – from property dismemberment, to taxation on life insurance, including various categorical tax expenditures (including the“Dutreil pact”) – reduce the inheritance tax base, but also contribute to distorting its perception among the French.
One2018 France Stratégie surveyrevealed, in this regard, that only 15% of French people were able to correctly identify the average effective direct taxation rate (between 5% and 10%), while 60% overestimated it; 74% of respondents proved unable to state the tax threshold or the proportion of French households affected by this tax.
They would no doubt be surprised to learn that 87.1% of inheritances in France are less than 100,000 euros, and that the median transfer (by inheritance and donation) is around 41,100 euros.
Children inherit increasingly later
This situation should be understood within a macroeconomic context of wealth that grows faster than income, and whose distribution among the population is highly unequal. In 2025, theMandatory Levies Council (CPO) indicatesthat wealth increased from 4.5 times the disposable income of households in 2000 to 6 times in 2021. Transfers can contribute to freezing situations based on principles linked more to the luck of birth than to merits.
France Stratégie
This debate, as we have seen, goes far beyond the scope of economic analysis to encompass philosophical dimensions. And as the clock ticks, French society is experiencing an unprecedented demographic transition which, due to increasing life expectancy, also inexorably pushes back the age at which children inherit. An advanced age that is less conducive to investment, which fuels the economy, than to savings, which deprives it of its fuel.
Julien Pillot does not work for, advise, hold shares in, or receive funds from any organization that could benefit from this article, and has declared no other affiliation than his research institution.
–ref. The majority of French people are not affected by inheritance tax, but still think they are –https://theconversation.com/the-majority-of-french-people-are-not-concerned-by-inheritance-tax-but-still-think-they-are-280506