The rising share of inherited wealth
What should be done about the growing share of wealth coming from inheritance rather than work?
Arguments For
Defending meritocracy
When wealth comes mainly from inheritance, individual effort counts for less in success. Acting to rebalance the weight of inherited capital against work answers an ideal of equal opportunity. It is a matter of coherence between professed values and economic reality.
Limiting the reproduction of inequality
A growing concentration of transmitted wealth tends to freeze social positions from one generation to the next. Acting, through taxation or capital endowments, can reopen social mobility. This strengthens economic dynamism by avoiding the ossification of fortunes.
Broadening access to capital
Rather than only taxing inheritance, one can seek to spread wealth more widely. Schemes that ease saving or endow young adults with capital could soften the weight of birth. The aim is to give everyone a starting point less determined by family origin.
Arguments Against
The legitimate right to pass on
Wishing to pass on the fruit of a lifetime of work to one's children answers a deep and respectable aspiration. Overly heavy inheritance taxation can feel like double taxation of already-taxed wealth. The desire to provide for one's family is an economic and social driver that cannot be ignored.
Risk of flight and optimisation
Wealth is mobile and affluent taxpayers have many means of optimisation. Tightening taxation can drive tax exile or complex arrangements. Expected revenue may then fail to materialise, defeating the original goal.
The risk of acting on the wrong lever
The rise of inheritance also reflects deeper trends, such as soaring property values or population ageing. Targeting transmission without addressing these causes could prove ineffective. A poorly calibrated response risks penalising the middle classes more than the very largest fortunes.
Defending meritocracy
When wealth comes mainly from inheritance, individual effort counts for less in success. Acting to rebalance the weight of inherited capital against work answers an ideal of equal opportunity. It is a matter of coherence between professed values and economic reality.
Limiting the reproduction of inequality
A growing concentration of transmitted wealth tends to freeze social positions from one generation to the next. Acting, through taxation or capital endowments, can reopen social mobility. This strengthens economic dynamism by avoiding the ossification of fortunes.
Broadening access to capital
Rather than only taxing inheritance, one can seek to spread wealth more widely. Schemes that ease saving or endow young adults with capital could soften the weight of birth. The aim is to give everyone a starting point less determined by family origin.
Nuance & Verdict
The rising share of inheritance in wealth poses a real challenge to the ideal that work should prevail over birth. Acknowledging this, however, does not dictate a single response: taxing transmissions more and spreading capital more widely are not necessarily opposed. A balanced approach would target the most concentrated estates without penalising the ordinary transmission of the middle classes, while respecting the legitimate aspiration to pass on. Investing in everyone's access to capital and saving could usefully complement the tax dimension. The essential thing is to address the deep causes of the phenomenon rather than its symptoms alone.