When time shortens, the tyranny of simplism lurks. At a time of the “tiktokisation” of society, we need shock phrases, catchy slogans. Short ideas. In politics as in tax matters. While the challenge to the pension reform does not weaken, in the ocean of alternative proposals to the postponement of the legal age, an idea floats on the left: the taxation of the super-rich.
Published a few weeks ago at the time of the Davos Forum, the report on global inequalities by the NGO Oxfam suggests that a tax of 2% on the fortune of around forty French billionaires would be enough to fill the pension deficit. Problem, not so long ago, this same tax was to be used to finance the climate transition, to fill the abyss of debt inherited from the Covid and to save our welfare state. Too many targets for one weapon.
At the same time, a form of hatred of the rich is spreading in public opinion. Its roots are deep. “Everyone has noticed that, in our time, and especially in France, this passion for equality takes on a greater place in the human heart every day”, wrote Tocqueville in the second volume of Democracy in America. One hundred and thirty years later, in 1971, François Mitterrand denounced in his Epinay speech “the money that corrupts, the money that buys, the money that crushes”. And in 2012, in the middle of the presidential campaign, François Hollande launched his famous “my enemy is finance”.
Recently, Marine Tondelier, the new national secretary of EELV went a step further, declaring during a meeting of the Nupes: “We claim that we no longer want billionaires in France […]. Those who have more than 1 billion, they are not talents, they are vampires.” And too bad if this “eradication” of the super-rich renders hopes of tax revenue linked to a tax on their famous fortune obsolete…
Behind these bubbling declarations, it is the portrait of a France plagued by inequalities that is drawn. What is it really? “There is no specifically French pathology in this area,” argues the economist and professor at HEC Augustin Landier. To be convinced of this, just dive into the Wealth Inequality Report, a thick report published each year by researchers from the Paris School of Economics. First observation: even if it is more and more holed, the tricolor net of social protection and redistribution works somehow. In France, unlike most large countries, the share of income captured by the richest 1% of households has remained broadly stable over the past few decades. In 2021, they received only 9.8% of all income distributed, compared to 12.8% across the Rhine, 16.6% in Israel or 18.8% in the United States.
Second observation: in terms of the distribution of heritage, photography has on the other hand become darker over the past thirty years. If we always look at the class of “the wealthiest 1%”, it now concentrates 27% of the heritage. This is practically 10 points more than the low point of the mid-1980s. only in 1970. The fact remains that we are very far from espousing Balzacian France at the end of the 19th century, where the wealthiest alone possessed half of the total wealth of the country. Above all, France is in the European average, and, in this area, our German neighbor is doing rather less well. Everywhere, soaring stock prices and soaring real estate prices, largely caused by the heaps of liquidity poured into the system by central banks, have boosted, sometimes artificially, the price of financial assets. A virtual fortune necessarily fragile, or at least erratic. Ultimately, if the “runoff” promised by some has not taken place, the grabbing denounced by others is partly a fantasy.
So what’s the problem, doctor? The equation is complex, and actually has three dimensions. The first is cultural. “The real French pathology is that of mistrust,” adds Augustin Landier. If artistic success or sporting merit are applauded, entrepreneurial success is necessarily suspect. While the craftsman or the manager of an SME are magnified into everyday heroes, the startuper is tolerated, provided that he grows up too quickly. But the manager of a CAC 40 box is suspicious. The romantic glorification of the “small”: a very French specificity. In Germany, the great family fortunes of Mittelstand are jealously preserved while they hold the local social fabric. And in the United States the Musks, Bezos and others are praised, even if their political proximity raises questions, if only by the billions of dollars poured by the large American multinationals into the financing of electoral campaigns.
Low social mobility
“The problem in France is that inequalities and the perception of inequalities are all the less bearable as the social elevator is blocked”, observes Vincent Pons, professor at Harvard Business School. A host of OECD studies reveal that we are one of the countries where academic success is most correlated with the social status of parents (and therefore with their wealth). Similarly, the probability of moving from one social class to another is much lower than in most large developed countries. Still, the restoration of the ISF or the creation of a supertax on the income of the ultra-rich will hardly solve this problem of social immobility. As if we were confusing the symptom and the cause. “One of the solutions lies in a total overhaul of the education system, with, at the heart, better paid, better trained teachers and above all more autonomy of the establishments”, supports the economist Philippe Aghion, professor at the College de France.
Last pitfall of the French model: the use made of new wealth. “Inequalities in wealth do not pose a problem in themselves for growth, unless the money created is not used optimally”, underlines the economist and adviser to the Natixis bank Patrick Artus. However, this is where the shoe pinches. The investment rate of French companies has stagnated at the level of the daisies for years, and the abolition of the ISF, marker of Macron’s first five-year term, has not caused the expected jump. The conclusions of the report of the capital tax reform evaluation committee, published last autumn, are unambiguous: “It is not possible to estimate by this means alone whether the abolition of the ISF has allowed a reorientation of the savings of the taxpayers concerned towards the financing of companies”, writes this group of experts and independent economists. “In France, we have too many pensioners and not enough innovators”, concludes Patrick Artus. By an almost Pavlovian reflex, the temptation would be great to punish the former in the hope that they change their behavior. “We could also detax investments made in new productive capital,” suggests Patrick Artus. The incentive rather than the tax. The ultimate taboo.