Household wealth in the United States rose from about 270% of GDP in 1997 to roughly 465% by 2021. Some 96% of that increase accrued to households where the respondents were 55 or older. And within that group, nearly three quarters of the wealth increase went to the wealthiest 10% of households. As this wealth passes to heirs, much of it will likely never be taxed. John Sabelhaus joins EconoFact Chats to discuss how the erosion of the estate tax and provisions like the "step-up in basis" have created what he and co-author Bill Gale call "never-taxed income," and how reforming the taxation of wealth transfers could address both widening inequality and rising government debt.

John is a Senior Fellow in the Economic Studies program at the Brookings Institution. He previously served at the Federal Reserve Board and the Congressional Budget Office.