Tories' big plan
Drum roll...yes it's to scrap inheritance tax. The way they portray it is fabulous:"In London and the south particularly, but also in areas of the north, because of rising house prices there are hundreds of thousands of couples who are going to suddenly be hit with this inheritance tax when their parents die," he said.
"It's not paid by the wealthy. It's paid by those of course who inherit."
Those poor couples - can you imagine waiting desperately for your parents to die, and then suddenly finding that you don't get £500,000, but instead you get £420,000. How does one cope? I suppose the point is those couples who just creep into the threshold, and so would have got £350,000, but instead get, £330,000. The inequity!
The second statement from the Tories is a complete non sequitur. But the main reason its a bad idea is this: the Tories claim the problem, so to speak, is because of rising house prices. That is, indeed, the reason why the numbers paying inheritance tax will rise from their current miniscule base. Yet if anything can be described as unearned wealth, it is that. Furthermore if any increase in wealth is government-caused, it is that. So the Tories are planning on cutting the already-low taxes on inheritances of couples of unearned government-caused wealth, rather than (all things have an opportunity cost) cutting taxes on productive behaviour. It makes no sense.
I wouldn't disagree that the system could be refomed, in fact I would make it explicitly a tax on the recipients, and thus make it essentially avoidable if it was spread around enough people.
Labels: conservatives, inheritance tax
posted by Matthew @ 8/17/2007 06:39:00 AM
Comments: 3
