Increase the Inheritance Tax
For some young workers, the aging of the American population means growing care burdens, while others anticipate a life-changing windfall. Higher taxes on the ever-growing number of inheritances could meaningfully reduce inequality.
As the population ages, more money is inherited each year. This is a growing opportunity — both to reduce inequality and to raise revenue to provide crucial social services that improve people’s lives. (Nathan Posner / Anadolu via Getty Images)
Our first figure visualizes population aging. It shows the share of the US population in different age bins over time. In 1950, young people made up a higher share of the population; a relatively smaller share of retirees sat atop a larger share of adults and young people. Over time, this age pyramid has flattened out, as people have begun living longer and having fewer children. Today the pyramid is much flatter: for the first time in US history, there are more adults aged 60 to 64 than there are children aged 10 to 14.
The postwar baby boom is visible within this general trend. Figure 2 shows the same age pyramids, now colored by generation. Boomers show up as a spike in the share of young people at the bottom of the pyramid from 1950 to 1965. This bulge travels up the pyramid as boomers age and reach retirement by 2025.
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