The fundamental question is not whether there is inequality, but whether it is possible for the poorest of Americans to become prosperous through hard-work and discipline. The answer – provided by scholarly economic research – is a resounding yes. A recent Treasury Department study demonstrates the extent of income mobility in America.

This study found that over the last 10 years, income mobility has not been static, but instead incredibly dynamic. In fact, more than half of the lowest income earners have moved into a higher income bracket in the 10-year span and nearly a quarter of the lowest income earners have moved into middle or upper-middle income brackets. The only income bracket to see a drop in real income over the last ten years was the top 1%.

Not only is wealth dynamic, but it is particularly so among those in the lowest wealth brackets. A study in 2003 found that within five years, one-third of households in the bottom wealth quintile move up to a higher quintile.

Moreover, the notion that wealth between generations in a family is static stands in stark comparison to the evidence. A paper published in the Journal of Political Economy found that two thirds of children of parents in the poorest wealth quintile ended up in higher quintile than their parents. And the children of parents in the wealthiest quintile? They had a 64% chance of being in a different (lower) wealth quintile than their parents.

Real humanitarians are interested in improving the lot of all Americans, and have no problem with a “wealth divide” so long as there is nothing preventing anyone from moving up. And leading economists have found that inheritances have little impact on such inequality.

Alan Blinder, a former member of President Bill Clinton’s Council of Economic Advisers, stated that only 2 percent of inequality is due to the unequal distribution of inherited wealth. Joseph Stiglitz, chairman of President Clinton’s CEA, stated inheritances might actually reduce income inequality.

Supporters of death tax repeal know that inheritances do not hold anyone back. In fact, they allow everyone to move forward faster than they would otherwise. Beyond helping the heirs move into higher income brackets, inheritances enable economic growth which brings better jobs for everyone, particularly in the case of family businesses. A death tax hampers this growth and slows the economy, holding everyone back.

17. “Income Mobility in the U.S. from 1996 to 2005,” Department of the Treasury, November 13, 2007, http://www.treas.gov/offices/tax-policy/library/incomemobilitystudy03-08revise.pdf.

18. Ana Castaneda, Javier Diaz-Gimenez and Jose-Victorrios-Rull, “Accounting for the U.S. Earnings and Wealth Inequality” Journal of Political Economy 111, no. 4 (August 2003): 848.

19. Kerwin Kofi Charles and Erik Hurst, “The Correlation of Wealth across Generations,” Journal of Political Economy 111, no 6 (December 2003): 1155-1182.

20. Alan S. Blinder, Toward an Economic Theory of Income Distribution (Cambridge, MA: MIT Press, 1974).

21. Joseph E. Stiglitz, “Equality, Taxation and Inheritance,” in Personal Income Distribution: Proceedings of a Conference Held by the International Economic Association, Noordwijk aan Zee, Netherlands, April 18-23, 1977, eds. Wilhelm Krelle and Anthony F. Shorrocks, 283 (New York, NY): North-Holland Publishing Company, 1978).

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