« The real election choice | Main | The economics of Wayne Rooney »

April 09, 2006

Comments

jck

"Is it possible to tax completely all inheritances?"
of course,you just won't get any income,people will gift it to their children early

Douglas

Good post, ain't never going to happen tho' ,is it?

I was interested in your two tribes theory , this observation could stand further analysis and may even point the way forward to those of us desperate for someone to vote for.

dearieme

There're only two rates of Inheritance Tax that will yield no income, and you've picked one of them.

Alex

You forgot to abolish the Home Office.

chris

Dearieme - inheritance tax isn't like income tax. You can avoid working, but you can't avoid dying. Current rules, I believe, treat during-life transfers as inheritances, if you die within a few years of the transfer. The question is: is it possible to design an inheritance tax that doesn't have as many loopholes as the current system?

Kem

I think that you are forgetting something. Inheritance isn't something to which the beneficiary has right as such, but his right to it based on the right of the original owner of the wealth, who left the inheritance, to decide on his own property. He has been taxed already once, when he earned the wealth, and after that he ought to have the right to do with his property what ever he wishes, including donate it away, or leave it as inheritance.

If you are setting an inheritance tax of 100%, you are depriving the original owner of the wealth of his right to decide on his own property, and thus also removing part of his motivation to create property in the first place. If you are allowing donations but forbidding inheritances, the prohibition will be eluded by donating most of the property to the beneficiaries before the original owner is dead.

dearieme

Chris, "inheritance tax isn't like income tax". True. People would bury their money in the garden and burn the house down before they'd hand over 100% to the government.

Matthew

God knows why you take that absurd book seriously. Take take just one one point, spending on public-sector workers' pensions is hardly 'waste', and much of the time it was a major reason in the employee taking the job. Without it salaries would have neeed to be higher, which would have negated the savings.

dave heasman

"£45.9bn – impose 100% tax on all inheritances (pdf). "

That'd be wonderful if possible. Sadly it isn't.
I'm also with Matthew on public sector pensions. Not everyone's a Lord Butler, scooping a six-figure pension and a seat on the board of death-merchants.
Far more are like my pa-in-law - a postman who didn't reach the top of the pay scale until he was 35, spent 46 years in the job, with a bit of time off for being a Royal Marine, and gets about £700 per month as the thanks of a grateful nation, or deferred wages however you prefer to view it. Or my brother-in-law coming up to his 38th year at the chalk-face of further ed, pulling down slightly more than a primary-school teacher with the added risk of assault and the promise of a pension of 45% of salary. I only started contributing to a series of personal pensions when I was 41, I've never earned more than £60k p.a. and unless it's 1929 or 2001/3 all over again I'll be better off than either of them.

It's a very cheap politics of envy.

Mark T

most of the inheritance tax issues could be solved through proper application of a phased capital gains tax system. On inheritance you are liable to meet the capital gains tax due on assets, if they have been held for over 10 years (say) then no tax is due. CGT is then reset for the inheritor and is due at their marginal rate if they subsequently sell those assets within 10 years. Income generated from those assets is taxed at the marginal rate.

The comments to this entry are closed.

blogs I like

Why S&M?

Blog powered by Typepad