Join us for the kick-off of our spring 2025 Henry Cohen Lecture Series, Inequality By Design: The Role of the U.S. Tax Code in Amplifying the Wealth Gap, on Tuesday, March 18 at 7:00 pm ET at The New School’s Starr Foundation Hall.

Featuring panelists Chuck Collins, Morris Pearl, Gabriela Sandoval, and the Honorable Nina Turner, along with excerpts from the documentary film “Death and Taxes” and fireside chat with filmmaker Justin Schein, this discussion will explore the false narratives that shape tax policy in the U.S., how the tax code creates and supports inequality, and provide a vision for how taxes can build an inclusive economy that supports a thriving democracy.

Speakers:

• Chuck Collins, Program Director, Institute for Policy Studies, Co-Editor, Inequality.org
• Morris Pearl, Chair, Patriotic Millionaires; Former Managing Director, BlackRock
• Gabriela Sandoval, Executive Director, Excessive Wealth Disorder Institute
• Justin Schein, Filmmaker, “Death and Taxes”
• Nina Turner, Senior Fellow, Institute on Race, Power and Political Economy (host)

This event is part of the 2025 Henry Cohen Lecture Series, which will bring leading thinkers, changemakers, policymakers, journalists, and activists to The New School to present their perspectives and explore the intersections of race, social stratification, and political economy that inspire economic and racial justice. 

Register Now

Presented in partnership with the Institute on Race, Power and Political Economy and the Milano School of Policy, Management, and Environment at The New School.

EVENT RECAP

Inherited Inequality: Unmasking the $100 Trillion Transfer and the Erosion of Democracy

By Madeline Neighly, Senior Strategist and Researcher

Over the next few decades, older Americans are expected to transfer $100 trillion in wealth to their heirs. Much of this money has accrued without being subject to taxation and will pass untaxed, further cementing wealth inequality in this country and eroding our democracy. On Tuesday, March 18, the Institute on Race, Power and Political Economy hosted a discussion around death, taxes, and the public policies that have spread Inequality by Design.

The inaugural Henry Cohen Lecture of the season, Inequality by Design used clips of the documentary DEATH & TAXES to explore the narratives and deeply-held beliefs that undergird an unjust tax system that perpetuates wealth disparities. The documentary, centered on filmmaker Justin Schein’s exploration of his father’s relationship with wealth, taxes, and inheritance, provided a poignant personal lens through which to examine broader societal trends. Paired with insightful commentary from host and Institute Senior Fellow Senator Nina Turner and panelists Gabriela Sandoval, Chuck Collins, and Morris Pearl, the event delved into the complex interplay of tax policy, societal narratives, and the erosion of democratic ideals.

A central theme that emerged was the deconstruction of the “self-made millionaire” myth. As the panel discussed, the accumulation of vast fortunes is rarely, if ever, solely the result of individual effort. Instead, it is inextricably linked to historical injustices, systemic advantages, and the compounding effects of inherited privilege. From the Homestead Act to redlining, the GI Bill to the initial exclusion of domestic workers and laborers from Social Security, governmental policies have helped to build wealth for White families while intentionally excluding Black and other families of color.

Increasing the value of these policies that provided wealth-building opportunity for White families is the tax system. While taxes are taken from our wages in each paycheck, the value accrued to assets is taxed only at the moment of sale – and at a lower rate than that of labor. Combined with significant increases in the estate tax exemption, now allowing individuals to pass nearly $14 million tax-free, the tax system works for the benefit of the wealthy at the expense of working people and benefits a tiny fraction of the population, effectively shielding vast fortunes from taxation. The lack of taxation on such massive wealth is exacerbated by the “step-up in basis” provision which essentially “resets” the value of assets to the fair market value upon the death of the asset holder, allowing it to be transferred to their heirs with no accrued tax liability. Thus, the heir likely pays no tax on receipt of the asset and when they sell that inherited asset they pay taxes only on the value increase from the moment of the prior owner’s date of death to the moment of the sale, reducing capital gains tax burdens for inheritors.

Both the probability of inheritance and the amount received are stratified both by income, which is itself racially stratified, and by race. White households are twice as likely as Black households to receive an inheritance, and inheritances to White families are associated with a $104,000 increase in wealth while inheritances to Black households are only associated with a $4,000 increase in wealth (Batchelder, 2020).

Compounded by time, interest, and the profound impact of inheritance, these policies have resulted in a seemingly intractable wealth gap. As detailed in the Institute’s recent Color of Wealth in Chicago study, the median White household had $210,000 in wealth while the median Black household had $0 in wealth.

Beyond the capture of wealth, it is the capture of government and our public resources that is concerning. The small number of extremely wealthy individuals in this country wield outsized political power that is anti-democratic, creating the ability to bend policies in their favor, and is antithetical to a just and inclusive political economy.

Supporting these unjust policies are racially-coded phrases like “taxpayers’ money” and “makers and takers” serve to divide and stigmatize, often carrying racialized undertones. As the panelists explained, tax credits and deductions, which primarily benefit the wealthy, are often portrayed as virtuous and economically productive, while public benefits for the poor are stigmatized as wasteful and corrupting. This narrative obscures the reality that all members of society are subsidized, whether through direct payments or indirect tax breaks.

The event concluded with a call for a more progressive tax system, one that prioritizes equitable distribution of resources and invests in public goods and services that benefit everyone. Beyond increasing progressivity in the tax code and closing loopholes, the Institute promotes policies to make the tax system work for everyone by ensuring no one lives in poverty in the U.S. and providing seed capital to youth to start life with wealth-building opportunity. 

Building an inclusive economy requires that we shift the narrative from individual achievement to collective responsibility. A thriving democracy requires that everyone have the resources necessary to live a productive and thriving life. 

The impending $100 trillion wealth transfer presents a critical juncture for American society. By dismantling the myths that perpetuate inequality and advocating for a more just and equitable tax system, we can ensure that the legacy we leave for future generations is one of opportunity and prosperity for all, not just a privileged few. As Schien noted, “Inequality is damaging our democracy. It is important that we leave our children a democracy more than wealth.”