By For me, the most shameful day in this Labour government’s life came on 7th November 2007. This was the day that Alistair Darling more than doubled the threshold on inheritance tax, for nothing more than shallow political manoeuvring.
Those, of course, were sunnier days; Brown was actually ahead in the polls (yes, I know it was a long time ago, but try and imagine), Cameron was on the ropes; talk of an early general election was on everyone’s lips. The leviathan that was Brown rode high, and with him, the prospect of a fourth Labour term was a tangible one.
And so a desperate Cameron and Osborne deployed their last chance saloon inheritance tax gambit. The words ‘The next Conservative government will increase the inheritance tax threshold to £1 million’ ushered the dawn of the Conservative revival from which they have never looked back.
Superficially, (and particularly to the wealthy media) such a package seemed attractive. Lifting those precious (and much talked of) hard working families’ property out of the ‘death tax’, who could argue with that? Certainly not Brown, who not a week later gleefully thought he had outmanoeuvred the Tories in a game of ‘raise the threshold’, increasing the limit to £600,000 (to be increased to £700,000 in 2010). What japes!
What a pathetically wasted opportunity. Brown could have come out fighting for what he must know is right. But instead of pointing out that Cameron’s measure would be a tax boon for the top six per cent of the richest people in the land, instead of arguing that if meritocracy is anything more than a meaningless sound bite then a redistribution on wealth is an absolute must, instead of fighting for that fifty per cent of people who literally own nothing in wealth or assets in our country, Brown folded and decided to shove wealth upwards. It was a callow and pathetic act.
And yet even now, if reports are to be believed it seems that even faced with appalling fiscal deficits, it isn’t the Labour party that has the guts to ditch the inheritance tax breaks. Brown and Darling are still too timid, too scared of the uber-wealthy and even the (now government owned) City to do what’s right and abandon the increase in the threshold.
The saddest thing of all is that the argument in favour of an increase was based on the idea that it would take the wind out of the Tories’ sails; instead the flip-flopping Brown looked weak and devoid of his own ideas. It was the beginning of the end of his hold on the political scene. We sacrificed fairness in the name of political game playing and Labour (predictably) came off worst.
Once again, the government should follow the Tories’ lead, but this time for the right reasons. Do it in the name of fiscal probity, but also do it for the millions who own nothing, for the society where the top one per cent of earners own twenty-one percent of the wealth, do it in the name of every child yet to be born whose life chances ought to be determined not on the wealth they inherit but on the quality of their character and do it for a Labour party who desperately needs something to fight for. If the government can’t, then we deserve to lose.
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Most people do but the problem is that most people would (understandably) put their family before "the welfare of the many".
I'm not really grizzling about death taxes and in a spirit of openness, I pick up litter for minimum wage before you think I'm a tory.
It could be argued that since people on low incomes, desperate for material improvement in their lives, spend disproportionate amounts on the National Lottery and that the lottery is essentially a tax on the poor with the proceeds going to fund things that afford most benefit to those who are already the moneyed, but that is by the by.
In my view inheritance tax is a tax on the dead rather than upon the living. The dead no longer need the money and so it is much better distributed among those who are still living and who can benefit most from it. As a tax that principally affects the estates of the wealthy it is a much more progressive and fairer tax, redistributing money to those more in need of it rather than merely passing it on automatically to the deceased's loved ones and children, who in all likelihood already enjoy a good level of existence compared to the median as per people in that society. Any tax that would need to be raised to account for reductions in Inheritance Tax would in all probability be felt wholly by the poor whichever way you cut it, which explains George Osborne's "non dom" tax wheeze: the Conservatives desperately don't want to look unenlightened and peculiarly unjust during the course of their first term in office but, given time, they will revert to type and get around to it if permitted to.
If I'm stuck in 1982 you must be domiciled in one of the final four years of the eighteenth century! I do believe that the welfare of the many is more important than the welfare of the few, or the one, but my conviction has nothing to do with spite or class but justice and humanity. In fact I was born into a relatively comfortably off upper middle-class family, was privately educated and did my first degree at Cambridge. Whatever I am and whatever you are I bet you'd be grizzling about "death taxes" in the selfsame fashion wherever and whenever you found yourself in the spacetime continuum, whether or not the country was waging war against Napoleon Bonaparte's armies!
Give my best to Piggy Malone!
You say that as if betting or lotteries are taxed. They're not. IHT is a side-show and just makes you look like a spiteful class-warrior who still thinks its 1982.
The case for inheritance tax is a good one. Why should the children of a wealthy man or woman automatically gain wealth from their estate, without working for it or contributing any effort toward its creation? Income from inheritance is essentially no different from any other unearned income, e.g., winning a sweepstake or lottery and therefore should be taxed in some fashion.
We want the UK to be a meritocracy where whoever you are and wherever you are born, you can still make something of yourself and succeed based on talent and effort. What we don't want is for a huge amount of the nation's wealth to be locked away, dynastically, passed down from one generation to the next whether the heirs are deserving or not.
Do we really want to go back to an aristocratic era where an accident of birth determines the life you will lead until death finally intervenes?
Not me!
did you forget to mention the legions of people in state non-jobs? That'll add a couple of million to your list.
How about claiming for lightbulbs and sky sports?
Voting for 42 days?
Invading foreign countries and killing thousands of innocents?
Gay adoptions?
Throwing open the borders?
The list is endless,but the man has no shame so I won't waste my time
You have said you have accumulated enough savings to pay Inheritance Tax. You have a expressed a view about responsibilities to the next generation that I think is rather narrow, but you've paid taxes for the Schooling of verying younger than yourself.
Workers, self-employed people, long term unenloyed people and those who have inherited great wealth might all have your opinions, mine or lots of others!
That's why the Lead piece is ill-judged and the Government was right to raise the threshold. The reform also included protection for resident wives, husbands and civil partners (but not co-habitees) neatly abolishing lots of work for tax-dodge lawyers.
A good reform, which precisely prepared the ground to attack the move that the Tories have pledged to give a big tax cut to very few.
My wife's mother experienced social mobility by getting out of Domestic Service into factory work. Her orphanage didn't keep girls in School, however well they did. My wife's father had to leave School even younger, to keep his younger brother's and sisters. They put both children through University. But then both chidlren lived in a time when the effect of the first majority Labour Government had created opportunities unknown to previous generations.
Man, are we spoiled for choice as per abject, ignoble, dishonest and shameful acts as far as Gordon is concerned. I think it would be better if we all picked our favourites and listed them in reverse order like one of Channel 4's infamous "Top one Hundreds".
I will have been taxed quite excessively over the course of my life and rather than spending all my wealth I will have accumulated and saved (i.e acted finacially responsibly) unlike many others in society.
Then upon my death my estate and family get penalised because I was fanancially careful to redistribute wealth to those who have not worked hard and to cover for those who did not save over the years.
I am interested in supporting my family and my kids after death. I'm not interested in supporting your kids or anyone elses, that's your job. I will arrange to pay no IHT and rest very easily knowing I have made those arrangements.
By the way your comment of "I'm just amazed the threshold is at £600,000. If you are being taxed at this level, you are in the top 6% of income earners in the country..." shows a lack of understanding that many many in the middle classes will be hit by IHT due to increased house prices. Just about everyone I know in a similar position i.e professional home owner will be looking at an estate in excess of £600,000 if they live to 70s, 80s etc. None want to have the state take loads of IHT from their kids.
Also I intend to hang around a bit yet, if only to see your Labour party suffer electoral wipeout in a few short months. I wouldn't miss that for anything.
Funny though that the thing that nnoys you is that I don't think my estate should be double taxed and that I can and will take action to ensure I pay no IHT. Could you explain why it is that I should not give my estate to my family, or is it just class envy on your part?
I suspect the uk taxes I pay over my working life will far far outstrip the ones you pay.
Once I have paid income tax, NI, captials gains, vat etc. etc. etc. I happen to believe that my estate upon death should pass fully onto whomever I leave it without taxation. If that means living abroad so be it.
As I said, I'm working to set my kids up, not yours as that's your job. Care to explain why you have a problem with that? Could you explain why when I have the choice to minimise or remove IHT I should do what you want and contribute through double taxation to everyone else?
I take it you will be harranging all the ex-pats living in France and Spain etc. for having retired to the sun? Or are working class couples in the costa's free from your class envy?
As for the health care issue, I'll be paying for private healthcare, much as I am currently.
All in another pitiful post from you along the lines off "if you don't give us as much money as we want then you are a selfish nasty Tory and deserve bad things haeppening to you". The usual left wing rubbish.
If anything it hurts entrepeneurship because it goes against the spirit of meritocracy and social mobility.
When Tories talk about the entrepreneurial spirit, and certain people talk about how they've pulled themselves out of poverty, I have an admiration for it. But nearly all of them (unless they are three hundred years old) are the beneficiaries of estate taxes, and the use they were put to building schools and other forms of social infrastructure. Without this basic principle, most of us would still be serfs on some landed estate.
Riches=centralised wealth=unfairness on the unmoneyed=destruction of the meritocratic ideal
See my comment on meritocracy above. I totally agree with you about the need for fiscal soundness and good budgeting. The idea of inheritance tax and good budgeting are not mutually exclusive. And if we're going to talk economics, I would very much be in favour of ramping inheritance tax right up to finance a cut in income tax. After all; surely more economic growth will be generated from people having more money to spend when they're actually, you know, alive? I write about inheritance tax not as a means to raise revenue, but as a check on an immorally wealth-inbalanced society. It's about fairness, not tax receipts.
The old argument about the politics of envy is an absurd sham. I could say to you that you in fact preach the politics of greed. What it actually is is the politics of fairness.
I would hope you would subscribe to the idea of meritocracy, rising and falling off the back of your own endeavours, no-one being held back as a result of their family's background.
If you do then you by necessity must subscribe to a mechanism to redistribute wealth; by far the easiest and most effective way of doing this is inheritance tax. For simplicity's sake let's assume that we start at a point where a population has roughly equal resources and roughly equal life chances; the perfect meritocracy. Therefore this generation (generation A) has a perfect meritocracy. Some will be productive and successful and some won't. Those that are will naturally amass income and wealth, as is right and proper, for people who are industrious and enterprising ought to be rewarded for their labour. However, the natural consequence of this is that as soon as generation A dies out our perfect meritocracy is automatically lost. For the successful people will pass their wealth on to their children. Thus the children of generation B whose parents were not as industrious as their compatriots, are put at an automatic disadvantage for they won't have access to as much of the wealth and resources. This might not matter very much for the first few generations, but think of that over hundreds, if not thousands of years. Wealth is amassed more and more by a smaller and smaller group who inherit and invest, pay for their education privately and have a stranglehold over the wealth and the establishment. We see the endgame of this in our own society, where 1% of the population own well over 20% of the wealth and the bottom 50% earn 1. Of course some of the less well-moneyed break through but it's very difficult. As a result, some people who would make it and do well had they just been given more resources and a better education fail, despite their best efforts.
Thus there has to be some mechanism to equalise wealth inheritance from one generation to the next in order to create a level playing field where people can rise and fall according to their own achievements and hard work, not on whether their parents (or indeed, their parents' parents) gave them wealth.
Given all of these arguments, I'm just amazed the threshold is at £600,000. If you are being taxed at this level, you are in the top 6% of income earners in the country and you should consider yourself very fortunate indeed. Meritocracy demands that a proportion is taken away from you so that your children can be judged with (something only vaguely resembling) parity of opportunity.
anyone want to contribute to an early-retirement fund so Guy M. can piss off abroad early ... instead of pissing about on here and pissing us all off?
I also agree with you about the 10p tax, but it's not either/or, I think both were appalling.
What I have found is that instead of wealthy people complaining about IHT its middle income families whose house has ballooned in value without them seeing much of the money - only to find a whacking great IHT bill on death. I agree with IHT in principle but the threshold is far too low, its not being paid by the super rich exclusively but also those who don't have the money to afford it.
But good luck to you when you finally desert this land. Be careful not to develop melanoma under those tropical skies you will be living under since free health care won't be available to you here back here in Blighty once you have disowned a country that gave you so much over the years.
Bon voyage!
http://www.gatesfoundation.org/Pages/home.aspx
Effectively microsoft have had a voluntary computer tax in place for years, and used the money raised for some pretty selfless stuff.
I wonder what Brown would have done with that much money? Probably have carelessly given it away or lost it backing another loser.
If being a country/citizen means anything it should mean an equal share in the ownership of the land that makes up the country (assigned on birth, reverts on death). But no call on the wealth created in modern times by another - that is theft.
You may be interested in these thoughts :
"Dynastic wealth, the enemy of a meritocracy, is on the rise. Equality of opportunity has been on the decline .... A progressive and meaningful estate tax is needed to curb the movement of a democracy toward plutocracy."
"Further shifting of this burden away from the super-rich is not the way to go."
"In a country that prides itself on equality of opportunity, it's becoming anything but that as the gap between the super-rich and the middle class is widening."
Spoken by the world's No 1 capitalist, Warren Buffet, on George W Bush's proposals to phase out estate tax in the US.
Thanks for your excellent contributions.
http://news.bbc.co.uk/1/hi/business/8151017.stm
In order to avoid any UK tax you ahve to show you do not have any links to the UK i.e. no car and no property, so my UK property will go to the kids to ensure I pay no UK tax in my retirement.
That ensures IHT on my UK property is avoided and my residence elsewhere will also ensure IHT is minimised or avoided for the rest of my estate. My desire is to set my kids up, not yours thanks, that's your job.
I prefer that the wealth I generate stays with my family. I would like my wealth to set MY kids up after I die. If Joe Bloogs down the road wants to set his kids up then let him earn the money in his life time to do that.
The point that John D makes is that for those people who want to keep their wealth with their family, IHT at low thresholds incentivises them to avoid the tax through trusts and moving abroad etc.
Contributors on here a free to focus on any issue they deem important, if you don't think it's important then don't read it; it is the Conservative Party who have raised the issue by proposing to raise the IHT threshold.
I too assumed from the title that this was going to be the subject of this piece, but was pleased to see someone prepared to attack this apeing of the Tory agenda. Surely when someone is dead it is the fairest time of all for them to be taxed? I don't think receiving large lump sums on your parents death is necessarily a good thing for the recipient either.
If there are to be any tax cuts I'd prefer it to be on Employers National insurance - literally a tax on jobs. No way should cutting IHT be a priority for any political party in the current climate.
In fact why not cap all salaries at £40k... or why not bring in communism.
This jealousy from the Labour party needs to stop, they need to recognise that entrepreneurs bring in jobs which in turn brings in tax. Sending the upcoming Richard Branson's and Alan Sugar's overseas is a huge mistake.
They always bankrupt the country http://news.bbc.co.uk/1/hi/uk_politics/8150972.stm
... and then tell us how they will protect public services. The sheer scale of waste is prolific. Had a good story yesterday evening about a GP, who's salary tripled and then he was able to back date a claim for all the committe worlk he was doing previously unpaid for £750k. Thats Labour. The trouble is that EVERYTHING they have touched has turned to shit. Now that's where the shame is.
Nice propaganda site.
I think that they all represent a loss of nerve by PM with poor leadership skills. Brown maybe able to run a big department but clearly he is useless at doing the top job. A fine example of the Peter Principle at work.
I wasn't actually talking about inheritance tax in particular but trying to point out that some countries that have relatively high levels of taxation levied against their citizens also have exemplary, advanced and civilised societies. I thought your quantum leap from an argument about inheritance tax to a faux comparison of our situation with those of what used to be the USSR, Communist China, Cuba and Zimbabwe was stretching credulity more than a little!
Inheritance tax, or to put it another way, taking away what the person who has died has left in good faith to their family is the least of the worries. People are taxed throughout their lives for everything they do, to take a chunk of it when they die is immoral.
Abolishing the 10p tax, much more important in my opinion.
In 2006 Sweden abolished inheritance tax. Their Finance Minister described the tax as grossly unfair.
That's odd Monkey. On the BoJo thread you were piling in with the rest of the Proles that he didn't deserve his wealth of £250,000 a year he earned through his DT column. Or do you mean you can only earn your wealth if you're doing a job that Northern Monkey approves of?
Your failure to discuss the monumental mistakes made by GB esq. and focus in on one thing that allows you to score some notional political point is sad.
If you're so clever why don't you put down 1,000 words on the Economic model of the last 12 years? Perhaps the Social and Economic impact / cost of the war on terror? This is somewhat higher on the list of priorities.
All your piece is a silly tribal tirade of stupidity.
My parents (Asian) work 70-80 hours per week and employ 5. They pay tax of their earnings – they bank a lot of it and one day the grand kids are going to get it. What is there incentive for providing employment making a success? Why should they pay twice? The one’s moaning are those who consume rather than those who create wealth. I keep 2-3 families in housing food and more. You Labour numpties can’t ever accept that millions work the system, you’re too busy having a go at those who earn rather than those who won’t. Perhaps if you dealt with those who leach off of the state then you’d get taken seriously when you’re wanting to tax us further to spray more money up the wall.
Have you ever been to Sweden or Norway, Vick?
But if you were to move or retire abroad, well, the nation will doubtless soldier on without you, somehow, although it won't be easy, plus you'll still be able to contribute to the exchequer of the "old country" from your suntrap via George Osborne's natty little "non-dom" tax scheme.
He stood up to present his budget and told me that he was going to increase my taxes, but I wouldn't be worse off. He clearly thinks that I'm not rich enough to understand basic mathematics.
As for doing it "for the millions who own nothing", my mum was a teacher and my dad was a salesman. They were not high earners, but their estate would have exceeded the £300k threshold. My brother, sister and I would have had to sell the house we grew up in and my parents spent their life paying for just to cover the share of it that the government wanted to take.
Before my grandfather died recently, he was forced to sell everything he had worked for during his life to pay for his care - despite having worked since age 14, fought in a war and paid national insurance since it's inception.
The problem isn't that we're not doing anything for the millions who own nothing, it's that we are forcing millions of people to own nothing before we'll do anything for them.
riches=capital=investment=employment=taxes
Follow the path of wealth confiscation and you end up like the USSR, Communist China, Cuba or Zimbabwe. Two of those have seen the light, the other two are posters for basket case states.
A good government should not seek to tax every target that it can sight on but rather to govern well by conducting continuous processes to avoid waste, to avoid bad budgetting, to force tenderers to stick by their contracts, to avoid borrowing to pay current expenditure. A bad government cloaks all of those failures by extorting more and more from the rich, middle-income and poor alike.
His supporters believe we will loose because the Tory expense excesses will be blamed on us, the ruling party, and because of the economy, not because of Brown. But they forget that the Tories were unelectable when GB came to power and that they admit that had Brown not bottled the election they (the Tories) would have lost. That's what the IHT thing was for - Cameron told Osborne to stop the election and it was so easy.
Of all the ridiculous and rebarbative things that Brown has done or been party to, the 10p tax debacle surely wins the prize. Removing money from the poorest of the working poor is both crass and counter-productive (it reduces the incentive for people to come off benefits).
A lot of the poorest are frequently described as "scum". It's no wonder that when we are treated as such, some of us behave like it.
Drop my estate into inheritance tax land and I'll retire abroad, remove all assets from the UK and then pass 100% of my estate onto my kids.
All you've done is remove my captial and spending from the UK for the period of my retirement.
Great plan monkey, great plan.
I worked to set my kids up in life, I didn't work to set you or your kids up, that's your job (if you're up to it).
One of the reasons why the inheritance tax threshold was raised was that increasining large numbers of people were opting to live abroad i.e. Cyprus where the inheritance tax problem is reduced or removed.
Simply put Lewis if you tell me that my kids will have a large chunk of their inheritacne stolen by the state then I'll retire aborad, remove my capital and spending from the UK for my retirement and pass the entire lot on to my kids. There will be nothing you can do about it and it will hit the UK financially due to my spending money elsewhere etc.
This is more of that good old politics of envy. Once I pay my tax, if I want to give my money to my kids that should be my business and not yours. Thankfully it now is and the threshold won't be coming down.
Why should we have any inheritance tax at all? The current system offers the government plenty of opportunity to get its hands on someone's money while they are alive, it shouldn't also afford them a chance to take a slice now they have died. Take the case of Jade Goody. Had she not married, her children would have been liable for over £1m of inheritance tax. Is that right? A 27 year old mother of two dies of cancer and the government would gleefully take its £1m without a second though.
Fortunately, most people believe the principle of inheritance tax is wrong whether it affects them or not. SO yes, lower the IHT threshold. See how popular that makes Obama Beach and his government of the walking dead.
1. Selling of UK gold at knock down prices
2. Removal of 10p tax rate
3. His Imperialistic attitude to Scotland driving Scots into the hands of the SNP
4. The genius of Brown's PFI scam (Every £5 billion of public building actually costs over £30 billion)
5. Rescuing the banks from a crash triggered by his and Darlings' political manoeuvring over HBOS
Next!
1. Starving the armed forces of sufficient funding
2. Raping the pension funds
3. Not having the guts to face the electorate
4. The McBride School of Governance
5. Being a compulsive liar
Please feel free to contribute
Hardened journalists are still shaking their heads in disbelief.
I make it two million unemployed and nearly four million on the sick (the smart dole). Wow. Six million doing nothing apart from spending my money as fast as they can. A million illegal immigrants makes it a nice round figure of seven million. Out of around 40 million adults. 1 in 5 adults is on benefits. And over 50% in the UK get some form of State benefit whether it be tax credits or mobility allowance. All paid for by the other 50% who actually work and pay tax.
No wonder the queues are so enormous at Calais. Cuckoos have never had it so good.
As for you claiming the OH is not rich, ho do you know? If you followed his blog, you might understand what he has done to protect his wealth.
What a dismal man Brown really is.
As a Labour voter I despise him.
The trouble is we are pretty spoilt for choice. Far too many shameful acts, whether it is allowing tyro (ex) Welfare minister Purnell to implement Tory David Freud's "reforms" - a multimillionaire banker causing misery and worry to the many sick and disabled people of this country. Or the abolition of the 10p tax band. or bringing Mandelson back into government.
Who wrote "The leviathan that was Brown"? or "a desperate Cameron and Osborne deployed their last chance saloon inheritance tax gambit." or " ... it would take the wind out of the Tories’ sails".
Remember: glasshouses; throwing stones; shouldn't ;-)
Given that this Labour government has legislated far stricter welfare reform than any Tory government managed, and also noting that there are far fewer people on benefits under Labour than under the Thaggie or Major governments, your point makes little sense. But then again, when did they ever?
That would explain why we have so many unemployable dribbling oafs in baseball caps happy to live on benefits under Labour then.
Offshore trusts get around this anyway, and I should know *wink*
I don't give a flying fig what the Daily Express tries to con its readers into believing with regards to Inheritance Tax, we know it's the fairest tax we have in this country and Brown and Darling should never have capitulated to Osborne by massively raising the threshold.
Brown didn't 'outmanoeuvre' Osborne at all, he simply looked weak and let the Tories dictate the agenda (and more importantly, turned his back on the principle of redistribution of wealth and ended up instilling privilege even further in our society).
People should earn their wealth through merit, not by being fortunate to have wealthy parents. Personally, I'd raise the IHT rate to 50%, and use the revenue to increase the threshold at which income tax is paid. That would be the Labour thing to do.
"do it for the millions who own nothing" - The Buddhists? They don't want it anyway. Or did you mean the millions of feckless Stella swigging unemployable oafs labour has bred?
Where were you last week when the 10p tax rate compensation scheme was axed?
That makes a bigger difference to the low paid.