Savings & Pensions

#289 - Wealth, Inheritance and the Estate Tax

It is commonly assumed that inheritances are a major source of wealth inequality and that the offspring of wealthy families tend to be as rich as their parents due to bequests.  This perception is one reason why many people support taxing estates at death.  But an individual's skills and personal choices are far more important in determining household wealth than inheritances.  In fact, the contribution of inheritance is surprisingly small.