The good news
Baby boomers in America are expected to pass on between $70 trillion and $90 trillion in assets to their offspring, according to Cerulli Associates.
“The average age of the world’s billionaires is almost 69 right now. So this whole transition or wealth handover will start to accelerate,” said John Mathews, head of UBS’ Private Wealth Management division, in an interview with CNBC.
However, this massive wealth transfer isn’t distributed evenly across younger generations. A 2023 study published in the American Journal of Sociology found that the average 35-year-old millennial holds less wealth than the average boomer at the same age, but the top 10% of wealthiest millennials have 20% more wealth than the top 10% of boomers.
In other words, a growing intergenerational wealth divide emerging, and it’s likely to accelerate in the coming years.
However, Galloway says his time teaching at an Ivy League university has given him reason to be hopeful: “I know a lot of rich kids and I know a lot of kids who are not rich — and the levels of happiness are not greater among the rich kids.”
To him, that’s “good news” for young people trying to build wealth independently and find fulfilling careers. It’s also a wake-up call for policymakers looking to tackle the growing wealth gap.
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Galloway’s proposed fix for the widening wealth gap is what he calls “an exceptional inheritance tax.”
“Inheriting more than say $10 million bucks doesn’t increase the happiness of your kids,” he says, suggesting that lawmakers implement a significant inheritance tax above that threshold.
His recommendation isn’t far off from the current tax structure. For the 2025 tax year, estates worth more than $13.99 million are subject to a federal estate tax, according to the Internal Revenue Service (IRS).
The tax rate ranges from 18% to 40%, depending on the estate’s size, according to SmartAsset. Beneficiaries may also face additional estate and inheritance taxes on the state level, depending on where they live.
Still, there may be room to raise those rates. Japan currently has the highest inheritance tax in the developed world at 55%, followed by South Korea at 50%, according to PwC.
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