Hugo Rifkind - a columnist and leader writer for the Times - wrote this morning about how a proportionate income tax could simplify the tax system and help stop the tax dodging which increasingly means we can't trust everyone is paying their fair share. That doesn't mean though, that he entirely agrees with the plan we outlined in our Single Income Tax report with the Institute of Directors. In a discussion on Twitter, he argued that we should keep Inheritance Tax, whereas we argued the tax should be scrapped in Section 5.2.2.2 of the report.
To explain why I think Inheritance Tax is not just dysfunctional but outright wrong, I think it helps to borrow a quote from one of the best films of the last decade, Memento:
Leonard Shelby, the film's hero, takes pretty much no utility from his vengeance. He is almost immediately dead to the consequences of his actions, thanks to a brain injury that has removed his ability to form new memories. However, he still wishes to do right by those he loves. Whatever we think about his seeking vengeance, who would quibble with the idea that when we close our eyes the world is still there?
I don't think it is too much of a leap from what happens to Leonard when he forgets whatever he has done to ourselves when we die. Our eyes have been closed but the world is still there. The interests of the dead continue to exist after they have died and should be respected. Inheritance Tax is not a tax on the unearned wealth of the person inheriting any more than income tax is a tax on unearned wealth if the income is to be spent on providing for children. It is a tax on the dead who earned that wealth while living.
Inheritance Tax is a particularly egregious attack on the interests of those who die because it strikes not only at the financial security they wish to provide for those left behind but also at the home that they all shared. The family home is a crucial part of the stability that many people, when considering their own deaths, would want their family to be able to maintain for as long as they felt it necessary. A tax bill of tens of thousands of pounds that forces them into a hasty sale of their home and the fresh trauma of relocation is an alarming prospect to anyone considering the fate of those they care about.
The idea of a tax on the interests of the dead isn't some abstract, academic ethical argument. I think it underlies massive popular hostility to the Inheritance Tax. It is why the arguments of many left-wing intellectuals continually fail to move the public on this issue. The same utilitarian minds that conceived of happiness economics cannot reconcile themselves to the idea that people care so much about something that will bring them no personal happiness. This is an issue where conservative principles are much more in touch with the intuitive understanding of ordinary people. They don't think that around half of one percent of government revenue is worth the price of their family facing additional hardship when they are first unable to look after them directly. Pretty understandable really.
In the end, even if you don't share the outlook of those who consider the world after they have died so important, isn't the instinct still noble? Isn't caring so much about something you'll never see humanity at its best? For so little revenue, so little benefit to those public spending is supposed to help, is it worth taking a swipe at this supreme expression of the familial bond?
Inheritance Tax means taxing people more if they use the money they earned leaving it to children, rather than spending it while they're alive. I think that decision should be nothing to do with the tax system.Hugo Rifkind - a columnist and leader writer for the Times - wrote this morning about how a proportionate income tax could simplify the tax system and help stop the tax dodging which increasingly means we can't trust everyone is paying their fair share. That doesn't mean though, that he entirely agrees with the plan we outlined in our Single Income Tax report with the Institute of Directors. In a discussion on Twitter, he argued that we should keep Inheritance Tax, whereas we argued the tax should be scrapped in Section 5.2.2.2 of the report.
To explain why I think Inheritance Tax is not just dysfunctional but outright wrong, I think it helps to borrow a quote from one of the best films of the last decade, Memento:
Leonard Shelby, the film's hero, takes pretty much no utility from his vengeance. He is almost immediately dead to the consequences of his actions, thanks to a brain injury that has removed his ability to form new memories. However, he still wishes to do right by those he loves. Whatever we think about his seeking vengeance, who would quibble with the idea that when we close our eyes the world is still there?
I don't think it is too much of a leap from what happens to Leonard when he forgets whatever he has done to ourselves when we die. Our eyes have been closed but the world is still there. The interests of the dead continue to exist after they have died and should be respected. Inheritance Tax is not a tax on the unearned wealth of the person inheriting any more than income tax is a tax on unearned wealth if the income is to be spent on providing for children. It is a tax on the dead who earned that wealth while living.
Inheritance Tax is a particularly egregious attack on the interests of those who die because it strikes not only at the financial security they wish to provide for those left behind but also at the home that they all shared. The family home is a crucial part of the stability that many people, when considering their own deaths, would want their family to be able to maintain for as long as they felt it necessary. A tax bill of tens of thousands of pounds that forces them into a hasty sale of their home and the fresh trauma of relocation is an alarming prospect to anyone considering the fate of those they care about.
The idea of a tax on the interests of the dead isn't some abstract, academic ethical argument. I think it underlies massive popular hostility to the Inheritance Tax. It is why the arguments of many left-wing intellectuals continually fail to move the public on this issue. The same utilitarian minds that conceived of happiness economics cannot reconcile themselves to the idea that people care so much about something that will bring them no personal happiness. This is an issue where conservative principles are much more in touch with the intuitive understanding of ordinary people. They don't think that around half of one percent of government revenue is worth the price of their family facing additional hardship when they are first unable to look after them directly. Pretty understandable really.
In the end, even if you don't share the outlook of those who consider the world after they have died so important, isn't the instinct still noble? Isn't caring so much about something you'll never see humanity at its best? For so little revenue, so little benefit to those public spending is supposed to help, is it worth taking a swipe at this supreme expression of the familial bond?
Inheritance Tax means taxing people more if they use the money they earned leaving it to children, rather than spending it while they're alive. I think that decision should be nothing to do with the tax system.
To explain why I think Inheritance Tax is not just dysfunctional but outright wrong, I think it helps to borrow a quote from one of the best films of the last decade, Memento:
I have to believe in a world outside my own mind. I have to believe that my actions still have meaning, even if I can't remember them. I have to believe that when my eyes are closed, the world's still there. Do I believe the world's still there? Is it still out there?... Yeah. We all need mirrors to remind ourselves who we are. I'm no different.
Leonard Shelby, the film's hero, takes pretty much no utility from his vengeance. He is almost immediately dead to the consequences of his actions, thanks to a brain injury that has removed his ability to form new memories. However, he still wishes to do right by those he loves. Whatever we think about his seeking vengeance, who would quibble with the idea that when we close our eyes the world is still there?
I don't think it is too much of a leap from what happens to Leonard when he forgets whatever he has done to ourselves when we die. Our eyes have been closed but the world is still there. The interests of the dead continue to exist after they have died and should be respected. Inheritance Tax is not a tax on the unearned wealth of the person inheriting any more than income tax is a tax on unearned wealth if the income is to be spent on providing for children. It is a tax on the dead who earned that wealth while living.
Inheritance Tax is a particularly egregious attack on the interests of those who die because it strikes not only at the financial security they wish to provide for those left behind but also at the home that they all shared. The family home is a crucial part of the stability that many people, when considering their own deaths, would want their family to be able to maintain for as long as they felt it necessary. A tax bill of tens of thousands of pounds that forces them into a hasty sale of their home and the fresh trauma of relocation is an alarming prospect to anyone considering the fate of those they care about.
The idea of a tax on the interests of the dead isn't some abstract, academic ethical argument. I think it underlies massive popular hostility to the Inheritance Tax. It is why the arguments of many left-wing intellectuals continually fail to move the public on this issue. The same utilitarian minds that conceived of happiness economics cannot reconcile themselves to the idea that people care so much about something that will bring them no personal happiness. This is an issue where conservative principles are much more in touch with the intuitive understanding of ordinary people. They don't think that around half of one percent of government revenue is worth the price of their family facing additional hardship when they are first unable to look after them directly. Pretty understandable really.
In the end, even if you don't share the outlook of those who consider the world after they have died so important, isn't the instinct still noble? Isn't caring so much about something you'll never see humanity at its best? For so little revenue, so little benefit to those public spending is supposed to help, is it worth taking a swipe at this supreme expression of the familial bond?
Inheritance Tax means taxing people more if they use the money they earned leaving it to children, rather than spending it while they're alive. I think that decision should be nothing to do with the tax system.Hugo Rifkind - a columnist and leader writer for the Times - wrote this morning about how a proportionate income tax could simplify the tax system and help stop the tax dodging which increasingly means we can't trust everyone is paying their fair share. That doesn't mean though, that he entirely agrees with the plan we outlined in our Single Income Tax report with the Institute of Directors. In a discussion on Twitter, he argued that we should keep Inheritance Tax, whereas we argued the tax should be scrapped in Section 5.2.2.2 of the report.
To explain why I think Inheritance Tax is not just dysfunctional but outright wrong, I think it helps to borrow a quote from one of the best films of the last decade, Memento:
I have to believe in a world outside my own mind. I have to believe that my actions still have meaning, even if I can't remember them. I have to believe that when my eyes are closed, the world's still there. Do I believe the world's still there? Is it still out there?... Yeah. We all need mirrors to remind ourselves who we are. I'm no different.
Leonard Shelby, the film's hero, takes pretty much no utility from his vengeance. He is almost immediately dead to the consequences of his actions, thanks to a brain injury that has removed his ability to form new memories. However, he still wishes to do right by those he loves. Whatever we think about his seeking vengeance, who would quibble with the idea that when we close our eyes the world is still there?
I don't think it is too much of a leap from what happens to Leonard when he forgets whatever he has done to ourselves when we die. Our eyes have been closed but the world is still there. The interests of the dead continue to exist after they have died and should be respected. Inheritance Tax is not a tax on the unearned wealth of the person inheriting any more than income tax is a tax on unearned wealth if the income is to be spent on providing for children. It is a tax on the dead who earned that wealth while living.
Inheritance Tax is a particularly egregious attack on the interests of those who die because it strikes not only at the financial security they wish to provide for those left behind but also at the home that they all shared. The family home is a crucial part of the stability that many people, when considering their own deaths, would want their family to be able to maintain for as long as they felt it necessary. A tax bill of tens of thousands of pounds that forces them into a hasty sale of their home and the fresh trauma of relocation is an alarming prospect to anyone considering the fate of those they care about.
The idea of a tax on the interests of the dead isn't some abstract, academic ethical argument. I think it underlies massive popular hostility to the Inheritance Tax. It is why the arguments of many left-wing intellectuals continually fail to move the public on this issue. The same utilitarian minds that conceived of happiness economics cannot reconcile themselves to the idea that people care so much about something that will bring them no personal happiness. This is an issue where conservative principles are much more in touch with the intuitive understanding of ordinary people. They don't think that around half of one percent of government revenue is worth the price of their family facing additional hardship when they are first unable to look after them directly. Pretty understandable really.
In the end, even if you don't share the outlook of those who consider the world after they have died so important, isn't the instinct still noble? Isn't caring so much about something you'll never see humanity at its best? For so little revenue, so little benefit to those public spending is supposed to help, is it worth taking a swipe at this supreme expression of the familial bond?
Inheritance Tax means taxing people more if they use the money they earned leaving it to children, rather than spending it while they're alive. I think that decision should be nothing to do with the tax system.