Only 14% of the wealth the top 1% has is inherited their money
https://www.washingtonpost.com/blogs/wonkblog/post/research-desk-did-the-top-1-percent-inherit-its-wealth/2011/11/04/gIQA4T8kmM_blog.html?noredirect=on&utm_term=.47217db48407
“wealth transfers (mainly inheritances, but also including gifts) made up, on average, 14.7 percent of the total wealth of the 1 percent (more specifically, the top 1 percent in terms of wealth). Interestingly, inheritance’s share has declined over time. In 1992, 27 percent of the wealth of the top 1 percent came from wealth transfers.”
“Wolff and Gittleman also find that because wealth transfers generally make up a bigger portion of the wealth of poor and middle-class people, they actually reduce wealth inequality, in aggregate. “Our simulations show that eliminating inheritances either in full or in part actually
The Debunkers are having a money fight, throwing wads of cash at eachother like snowballs.
Bob: Bunch of rich fat cats. Worst part is, they probably inherited all their money!
Seamus: Actually, they probably didn’t. According to a BLS Working Paper by Edward N. Wolff and Maury Gittleman, of all of the wealth the 1% has, only around 14% was inherited or gifted. Considering that figure was as high as 27% back in 1992, I would say we’ve made massive progress here!
Bob: Oh.. well.. THAT’S 14% TOO MUCH! We should implement a 100% inheritance tax!
Seamus: Well, not only is that unfair to those who work and save to pass their wealth on to their children, but according to the aforementioned BLS Working Paper, an inheritance tax can actually make income inequality worse!
Bob: How is that even possible?!
Seamus: Because, the poor and middle class inherit a greater portion of their overall wealth than the rich do! So if you force people to give up everything they own to the government upon death, you would be hurting the lower class more than anyone else!
Bob: Well what about some kind of inheritance tax that only applies to the ultra wealthy?
A mail man walks on screen with a telegram.
Mail man: Telegram!
Bob: Huh? My great Uncle Sylvester died? I’m in the will?! You know what? I’ve learned something. Ultimately, it’s up to individuals to decide what to do with their own money! And it’s foolish to take for granted that a wealth tax wouldn’t affect the productivity of the upper class, who strive to give a better life to their children. And ultimately, aren’t we taxed enough already? Just to have what meager amount is left over plundered when we die? I for one, am glad there’s no inheritance tax!
Seamus: Actually, in this state, there is!
An agent grabs half of Bob’s check.
Bob: AH! I knew death and taxes were inevitable, but why do they have to come together?
Common Sense Soapbox
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About this show
Short videos with a punchy, comedic tone and entertaining Socratic characters taking on trending issues and important concepts from a classical liberal perspective, written & animated by Seamus Coughlin.
Are Death Taxes Actually Helping Anyone?
May 14, 2019
Contrary to popular belief, only 14% of the money that belongs to the nation's top 1% comes from inheritance. For the vast majority, wealth has been self-generated. Seamus helps Bob come to the realization that a larger inheritance tax does more harm than it does good.
CREDITS:
Written by Seamus Coughlin & Jennifer Maffessanti Animated by Seamus Coughlin Produced by Sean W. Malone
Popular YouTube host Kevin Lieber (VSauce2) hosts this informative and entertaining video series designed to introduce key concepts of economics to younger audiences through credible arguments, comedy... And puppets!
