Yes the problem lies in how the wealth is accumulated, its extracted from someone. If they all worked super hard for it nobody would have a problem. But the reality is, all workers get a paycut so the equity owner can chill and see his money rise.

Originally it was just a really high tax rate at the highest bracket. This accounted for a monetary system that is essentially gamed. In the US the government reversed this under the theory of trickle down economics. This allowed a large group of people to greatly grow their investments and their wealth accordingly.

Inheritance tax is used to recoup some of these lost taxes but it is a poor way to do it. The correction should be at the beginning not the end. I agree with you.

Why does the system work such that they get all that wealth to begin with?

Because capitalism is the best way to distribute resources (to the top).