| |
| Join Our Newsletter |
 Please Select sub-criteria |  |
|
|
|
|
| |
|
|
| |
| |
| |
| |
| |
| |
| |
01 Inheriting trouble
According to the famous aphorism, there are only two things certain in life: death and taxes. However for more households today, the two have merged uncomfortably in the form of inheritance tax. Initially levied on the estates of the fabulously wealthy, today inheritance tax starts at £263,000, less than the average value of a three-bedroom semi detached in the South East. The issue has thus become a major topic again, following the release of the increasing number of postcodes in the inheritance tax band by the Conservatives and a report calling for more tax bands from the Institute of Public Policy Research.
Renewed opposition to the tax, or at least to the huge rise in people above the threshold, has been the predictable response of the right. Whereas support for the tax, or minimal reform of the existing regime is the favoured solution of the left. Both sides however have missed the crucial point that taxation should not be debated devoid of the expenditure it is meant to be financing. The right point to the fact that, inheritance tax is double taxation (i.e. it taxes income that has normally had income tax and national insurance deducted already), and secondly that it acts as a disincentive to save by penalising wealth generation. These arguments, though strong, could apply to most taxes such as excise duties, VAT or capital gains tax on shares, all of which tax people on income which presumably has been taxed already. As for abolishing taxes that destroy incentives to save, then a case for eliminating income tax on savings could be made on the same basis.
It is true however that the tax burden has now become onerous for the vast majority of people. The key point is that, taxation collected should be viewed as a means and not as an end in itself. Taking this approach should lead to a zero based approach to expenditure rather than the annual incremental inflationary model favoured by most western politicians. The largest area in the UK government expenditure is neither health nor education, but social security. Having millions of people on the state’s payroll is by any objective metric an indictment of the economic system. What is required is a more rigorous debate on how best to tackle the problem of welfare, a largely taboo subject in contemporary politics.
| |
| |
| |
| |
1 2 3 > Last »
Page 1 of 4 pages
| |
|
|
