The tax code structurally favors generational wealth transmission via assets and gifts

Evidence

The tax code rewards and encourages generational wealth building in two major ways. The first is the preferential tax treatment that comes with asset ownership. The second is the provision for tax-free financial transfers to family members, both while the giver is alive and after they die, as part of their estate. In both cases, reduced or eliminated taxes result in increased savings and investment opportunities for the next generation. Each one dates back to the beginnings of our “progressive” tax system, and like many of the other shifts we’ve seen, each one has been influenced by the interests of the wealthy, white, and powerful. — Dorothy A. Brown, The Whiteness of Wealth, 434

Categorization

• DEFINE: Names the two structural pillars of generational wealth: preferential asset taxation and tax-free family transfers, alive and via estate.