Just curious what you think the correct solution is? You're rich, you have a kid, you die when the kid is 2yrs old. So they get nothing? 12? 22? 32?. Is there some "correct" number? If you're raising them in some $100m home do they get booted out and put in a tenement?
On the other hand, most people die closer to 75-80 and their kids are 50+. Leaving inheritance to them isn't really spoiling them as they are alread adults with established lives.
In the US, the inheritance taxes don't kick in until $15M ($30M for married couples). Even at 2 years old, a child can inherit more money than most people will make in their lifetime before a dime is paid to the IRS.
Estate taxes kick in at much lower threshold in most States. Washington had to repeal their recently created 35% estate tax (for a combined 75% rate) due to overt capital flight to places like Idaho. The exemption in Washington is $3M.
I don't care about estate and inheritance taxes much but many people do and it empirically drives behavior.
Federal inheritance taxes. There are also state inheritance taxes in many states. NY, for example, kicks in at ~$7M. MA kicks in at $2M.
poor little multimillionaire :( my heart breaks for their 90th percentile wealth.
> NY, for example, kicks in at ~$7M.
Won't someone think of the children? The very wealthy children paying a 3% marginal tax rate on some of their multi-million dollar inheritance?
Honestly my experience with most of these kids is they are so innumerate they won't even notice the tax