As regular readers will know, I’m no economist and don’t pretend to be – which is why I sometimes get all confused.
While I think John Redwood is a bit of a fool for raising the whole scrapping inheritance tax idea again when it still appears to be hugely unpopular, can anyone tell me why allowing people to pass their savings on to their family when they die without the state taking yet another chunk of their hard-earned cash is such an horrific idea?
You’ve slaved away your entire working life, usually having to give somewhere between 20 and 40% of what you make to the government all the way through. Perhaps you’re lucky enough to have been born long enough ago that buying a house was a viable option, and so have a building and a bit of land. Why the hell shouldn’t you be able to just give them to your kids, considering that you’ve already been taxed on the things?
And, for that matter, why is inheritance tax still so unpopular? I could understand it a bit more 20-30 years ago, when class/wealth envy and inequality played so much part in British politics, but considering the combination of the huge boom in house prices in the last fifteen years and Thatcher’s “right to buy” letting a bunch of people pick up their council homes dirt cheap, surely it’s now in the interest of a decent chunk of the population to lobby for inheritance tax to be abolished?
Take my token working class Cockney mate, whose parents bought their council house back in 1983 for Â£30k. In Islington. It’s now worth 25 times that. Were my mate’s parents to die tomorrow, that means he’d have to find Â£300,000 to keep the home he grew up in. Thanks to average salaries not having risen anywhere near in line with house prices, it would take him 30 years to save up that amount even if he put half his (gross) salary towards it every month. In other words, less well-off people – especially in this time of extortionate house prices – are more likely to be walloped.
Even if you are one of those outdated lefty types (*waves*) who can ignore the blatant unfairness of the government taxing our children for things that we ourselves have bought because you like to see rich people taxed simply because they’re rich and it serves them right (property is theft, Comrade, and suchlike), the scheme fails. Because all the Duke of Ponsonby has to do is chuck a spare old master at a local art gallery, and the kids are off the hook for another generation.
You see, I simply don’t understand tax.