A taxing friendship

C Powell

I understand that La Toynbee has a house in Italy, where they abolished inheritance tax some time ago. Perhaps in your next friendly chat with her you might ask her whether she intends giving 40% of its value to the UK Treasury on her death and, if not, why not. It's always interesting to see whether those in favour of higher taxes are willing to put their money where their mouth is when they have a choice in the matter.

wonderfulforhisage

I rate myself as a strong supporter of low taxes, the free market, minuscule government and have ceased to support the Conservative Party because of their unprincipled spivery since the bicycling Heir to Blair took over. But......... It seems to me that were there not inheritance tax pretty well all capital would accumulate in the hands of a relatively few rich families (the aristocracy?) and the rest would spend their lives effectively in their service. Death Duties help smooth the tendency for capital to accumulate in too few hands across the generations. I'm all for a system allowing anybody to prosper to whatever extent they can in their own lifetime, and am against penalising their industry and skill with punitive taxation. On the other hand let's not forget that the French Revolution is only a couple of centuries in the past and the Russian one only ninety years away. I'd rather we didn't set up the up a climate that would forment a Guardianista Revolution in this green, windmill infested, pleasant(ish)land. Nice Polly T. maybe a potential Lenin of a future Guardianista Revolution but there are plenty of would be Stalins waiting in the wings. Let's make sure that a reasonable distribution of capital precludes Polly and her mates and matesses putting the kybosh on things. If you don't agree think Zac Goldsmith - that'll bring you down to earth.

Paul Williams

The issue with Inheritance Tax is that it is against moral law. I work all my life, accumulate wealth and property (for which I am fully taxed during my lifetime), but then purely through the act of dying 40% of my property is defaulted to the State! Why? Does this mean the stuff I own during my life does not actually 'belong' to me but I am merely 'caretaking' it on behalf of the government?

tired and emotional

The problem with wonderfulforhisage’s argument is that it implicitly falls for the fallacy that there is a limit to the amount of wealth that can be created and that we must therefore ensure that the cake is shared out according to some arbitrary definition of fairness. This is nonsense. The fact that Couple A worked and saved all their lives to pay for assets out of taxed income and decide to leave the fruits of their labours to their children has zero impact on Couple B choice whether or not to do the same. If the children of Couple A inherit the money to allow their children to escape the state school system and, if their kids put the effort in, get a better education and potentially better jobs because of their inheritance, why does this disadvantage the kids of Couple B? The fortunes of Couple B, C, D and E and so on down the alphabet, and their children, are dependent on their personal qualities, their choices and their circumstances. Not on what happens to Couple A and their kids. Pretending IHT is – or can be - used to redress the fundamental facts of life is either well-meaning stupidity or a smokescreen for the vindictive insistence that anything that allows individuals the freedom to escape the state’s death-grip must be stamped on. Someone who calls themselves a tax-cutter should not be so naïve.

Tiberius

WFHA: George Osborne has promised to do what you suggest - tax the relatively few rich families with £1m estates. It is the iniquitous stealth tax of Brown (failing to raise the IHT threshold in line with prices) that he is addressing.

Max Kaye

Interesting selection of photo. Is that a halo above St Darling's head? I think it's the device whereby he receives detailed instructions from Brown - as I can't believe that after a decade of meddling micro-management, the yellow one would allow his minions independent thought in any area, let alone the economy.

Tim Worstall

She's also grossly wrong in her calculations of taxation. Property taxed less than anywhere else? When we tax property at twice the OECD or EU average? The calculations are here if anyone's interested: http://timworstall.com/2007/10/09/polly-on-gordo/