For anyone whose net worth is up to $26M, there’s no tax when they pass it to their children. This lets the wealthy borrow instead of using their profits during their lifetime, which lets them keep 100% of their profits without paying any taxes.
For those whose net worth is hundreds of millions or billions, sophisticated tax avoidance techniques such as “buy, borrow and die” can shield amounts far larger from taxes indefinitely.
Unshared Prosperity
The middle class spends a large part of their income and profits on investments, paying taxes on most of their income and gains.
However, the wealthy only spend a small percentage of their profits on their net worth, which comprise the vast majority of their wealth. By using techniques like borrowing against assets, they can often avoid taxation entirely for most of their assets.
This results in the middle class being subjected to a larger percentage of taxes than the wealthy, because the middle class cannot use the same techniques to avoid taxes.
In principle, the US has a progressive tax system to help level the playing field. Due to loopholes, US taxation is somewhat regressive, putting more of the burden on the middle class.