Family wealth dictates our life choices. So is the Bank of Mum and Dad now behind so many of society’s growing inequalities?

Summary

The “Bank of Mum and Dad” drives modern inequality, fostering an “inheritocracy” where family wealth shapes opportunities over individual merit. This safety net often undermines social mobility, tying success to inheritance rather than personal effort.

Rising housing costs, wage stagnation, and unequal inheritance have entrenched this dynamic, with parental support shaping life milestones like homeownership, career paths, and education.

While early inheritances advantage some, the burden of social care costs threatens others’ expectations.

This growing reliance on family wealth exacerbates inequality within and across generations, highlighting the need for a broader societal conversation about privilege and fairness.

  • xmunk
    14·
    1 month ago

    The estate tax should be absolished in favor of treating inheritance as income and gifts to children should also be taxed as income.

    • Maggoty@lemmy.world
      7·
      1 month ago

      That’s not the problem. The problem is while the parents and grandparents are still alive. They act as the younger generations’ bank. Giving them financial freedom to get set up properly. Even if you completely delete that inheritance when the “bank” dies, the younger generations already have a house, a good 401k, and possibly other investments going. So they’re now setup to do the save thing for their kids.

      This sounds like great family financial planning but the fact that we have to rely on this means anyone whose parents fall out for whatever reason, (addiction, medical debt, market flub, etc) is fucked through no fault of their own. And of course, anyone whose parents didn’t receive the message to build wealth through never selling a house is also fucked.

      • xmunk
        1·
        1 month ago

        It’s really fucking complicated and we don’t really assign purchases in a way that’d fully solve the problem - but if taken to a logical extreme I think simply taxing gifts as income sort of fixes all the loopholes.

        If we’re talking about the US the minimum income threshold for taxation is 13,850 - most personal expenses children incur wouldn’t sum up to exceed that threshold (outside of medical bills which it’s insane you have privatized in the US). So if gifts were treated as an income source then the first time kids would probably be hit with any owed taxes would be being gifted a car or being gifted college tuition.

        I think the standard exemption should probably be higher than it is but it’s still high enough to cover what we generally consider common expenses when raising a child. Using a rule like this would really even out the playing field for kids.

        • Maggoty@lemmy.world
          2·
          1 month ago

          Then Mom and Dad just include taxes. I want to destroy this, not just make more revenue for the government. Either that or we admit we don’t live in a country of individual merit and we change our culture. But letting this submarine of privilege sit here while we blame all of the poor people and pull up ladders isn’t going to work in the long run. It’s just going to cause massive political unrest like that during the French Revolution.

              • xmunk
                1·
                30 days ago

                How so? Living expenses for children often fall below exempt income levels. Taxation would only kick in for large wealth transfers.

                • chonglibloodsport@lemmy.world
                  1·
                  30 days ago

                  Having to file income taxes for their children is a burden the poor do not need.

                  Income taxes in general are regressive, even with all the exemptions and credits. If you want progressive taxation you should be looking at land value taxes and other forms of wealth taxation that rich people can’t avoid.