Why is it so hard to counteract wealth inequality? Evidence from England and Wales

Taxing inheritance is an effective way of abating wealth inequality. Yet despite persistently high levels of wealth inequality, inheritance tax rates have declined significantly in recent decades. We argue that it is difficult to tax inherited wealth because, paradoxically, the people who have the strongest material interest in such taxation are those least likely to express an opinion. Instead, the political terrain is shaped by the preferences of homeowners, and their children, who have a strong material interest in low inheritance taxes. Empirically, we first evaluate this argument using original survey data from England and Wales. We then examine whether providing information about the unequal distribution of housing wealth locally and/or nationally can shape preferences over inheritance taxation, but find no effect of our information treatment. The paper helps explain why addressing wealth inequality is politically difficult, and it thereby contributes to an increasingly salient public and academic debate