Rome: Italy’s light-handed inheritance tax regime is drawing sharp criticism from economists, who argue that the country’s extremely low levy on inherited wealth is deepening inequality, entrenching privilege across generations, and leaving vital public resources untapped. According to recent estimates, Italy taxes inherited wealth at an average rate below 0.5%, a figure that is dramatically lower than the global norm, and significantly undercuts tax receipts compared to peer nations.
In 2024, Italy saw around €243 billion in wealth passed down to heirs equivalent to astonishing 14% of its GDP. Despite this massive transfer of wealth, inheritance tax contributed only €1 billion to state coffers last year. In contrast, countries like France and Germany raised approximately €21 billion and €9 billion, respectively, from inheritance levies.
Economists say the implications of such leniency go beyond lost revenue. They warn that lightly taxed legacies perpetuate a system where economic mobility is limited and wealth remains concentrated in a handful of families. Salvatore Morelli, a professor at Roma Tre University, argues the policy “stunts social mobility and preserves privilege from one generation to the next.” Indeed, studies show that many of Italy’s richest individuals inherited their fortunes rather than building them, reinforcing a deeply rooted inequality.
Historical data underscores how persistent wealth can be in Italy. Bank of Italy research suggests that some families who were among the wealthiest in Renaissance-era Florence remain disproportionately well-off today highlighting how wealth endures, even through centuries of upheaval.
Raising inheritance tax rates could unlock billions more for the state, economists calculate. If brought closer to European averages, the tax could yield an additional €6 billion annually, money that could be channeled into public education, childcare support, or lowering labor taxes. But political obstacles remain steep. Prime Minister Giorgia Meloni’s government has firmly resisted raising the levy, pointing to ideological views and low public trust in governmental efficiency.
Critics argue that this tax stance is part of a broader fiscal tilt toward the wealthy. Italy’s tax system, they say, disproportionately benefits the richest: generous exemptions, favorable flat-tax rules, and light asset taxation combine to create a structure where the rich actually carry a lower relative burden than middle-income Italians.
Still, some experts believe reform wouldn’t necessarily destabilize the economy. Giacomo Gabbuti, an economic historian at Sant’Anna University in Pisa, points out that other European economies like France and Germany successfully impose higher inheritance taxes without triggering capital flight or hurting growth.
For now, the issue sits at a tense crossroads: Italy’s inheritance tax policy offers a sanctuary for dynastic wealth, but its long-term consequences may be undermining social fairness and limiting the state’s ability to invest in its future.