Why is it so Hard to Counteract Wealth Inequality? Evidence from the United Kingdom

abstract: Despite high and rising levels of wealth inequality, many advanced democracies have cut taxes on inherited wealth in recent decades. To explain this puzzle, the authors argue that taxing inherited wealth is politically difficult because, paradoxically, the people who have the strongest material interest in higher taxes—low-wealth renters—are those least likely to express a clear opinion about inheritance taxation. Instead, the political terrain is shaped by the preferences of homeowners and their children, who have a strong material interest in lower inheritance taxes. Empirically, the authors first evaluate this argument using original survey data from the United Kingdom. In two survey experiments, they next examine how exposure to information influences views on inheritance taxation. While the authors find no effect of providing statistical information about the distribution of housing wealth, preferences are influenced by explanatory information that explicitly outlines the potential effects of inheritance taxation.