NCPA Study: Inheritance Has Little To Do With Wealth
June 27, 2000
As Congress is debating whether to abolish the estate tax, a new study from the National Center for Policy Analysis (NCPA) finds that inheritance is not a significant source of wealth. According to the study by former Treasury official and NCPA Senior Fellow Bruce Bartlett, a significant percentage of the largest American fortunes were accumulated in a single generation.
- Some 80 percent of millionaires acquire their wealth in a single generation without the benefit of inheritance.
- Among the top 5 percent of households ranked by wealth, only 8 percent of their wealth came from inheritances.
Furthermore, the U.S. has a very high level of wealth mobility, with poor people becoming rich and rich becoming poor in a short period of time. Wealth is far more mobile in the U.S. than in Europe, and it is distributed more equally than in the rest of the world.
- Over a ten year period, 60 percent of families in the bottom ten percent of wealth distribution had moved up to a higher tenth -- and some all the way up to the top 10 percent.
- Conversely, almost half of those in the top ten percent of wealth had dropped out of that tier after 10 years.
Source: Bruce Bartlett (NCPA senior fellow), " Wealth, Mobility, Inheritance and the Estate Tax," NCPA Policy Study No. 235, June 26, 2000, National Center for Policy Analysis.
Browse more articles on Tax and Spending Issues