By Duncan Simpson, Research Director and originally published in the Express
With a Christmas election only weeks away, political parties will be furiously furnishing their manifestos and laying out a vision for the UK after we leave the EU. But amongst the Brexit hullabaloo, it’s vital that the cost of living remains front and centre in the campaign to come. Ensuring that only millionaires pay inheritance tax would do just that.
Politicians have long known how dreadful the hated death tax is: George Osborne toyed with increasing the threshold up to £1 million in 2007, rightly insisting that “lower taxes aren’t just for Christmas: they are for life.” In spite of the current government heeding our campaign to scrap the probate fee rise, the tax burden is now at a 50-year high. The cost of death remains overbearing, so Osborne’s warm words now seem especially hollow.
Let’s be clear why inheritance tax is so dreadful. It discourages saving and encourages people to rearrange their assets in a less productive way, and is rightly viewed by the public as a ‘double tax’. It is also fiendishly complicated: the Tolley’s guide for this one tax is 1,100 pages. Unsurprisingly, the TaxPayers’ Alliance firmly believes it should eventually be abolished.
Our research shows that if the threshold was increased from £325,000 to £1 million, almost 25,000 fewer families would have to pay the hated death tax across this year and next. The government would still be raking in £7 billion in 2019-20 and 2020-21, but only the very wealthiest in the country would pay.
Campaigning groups and think tanks, all too often even those on the political centre right, shamelessly insist that more spending to support the ‘common good’ (whatever that might be) is the way forward. Actually, it’s much more simple: lower and simpler taxes free people to do more with their hard-earned cash, and coughing up for a huge inheritance tax bill is a horrible thing for a grieving family to deal with. Freedom and security is enhanced when government takes less of our money.
Brexit will likely be the focus of the election. But ditching the death tax should be the top priority of all parties to help hard-working families.