their lives and saved up a substantial nest egg not be able to give their money and possessions to their children

and grandchildren? In particular, it would seem un-American if children were unable to inherit a family

business or a family home. Alternatively, many Americans are far more comfortable with inequality resulting

from high-income people who earned their money by starting innovative new companies than they are with

inequality resulting from high-income people who have inherited money from rich parents.

The United States does have an estate tax—that is, a tax imposed on the value of an inheritance—which

suggests a willingness to limit how much wealth one can pass on as an inheritance. However, in 2022 the estate

tax applied only to those leaving inheritances of more than $12.06 million and thus applies to only a tiny

percentage of those with high levels of wealth.

The Tradeoff between Incentives and Income Equality
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