Inheritance Tax

vimothy

yurp
This might be a really stupid question but what's to stop Gramps and Grandma from legally transferring ownership of their house/fortune/collection of Ming vases to their offspring (or even grandchildren) while they're alive? I mean, is it against the law to make very valuable gifts down the generations like that, at least without paying some kind of tax on it?

Of course, which is exactly what they do ...

Well - I think that gifts are included under inheritance tax as well, but there are other ways and means.
 

gek-opel

entered apprentice
Not like you to care so much about sentiment Gek.

True enough but I like to understand why people hold the beliefs they do. I don't agree that this ought to motivate policy, indeed I would opt for 100% death duty. But it clearly underlines why this is such a hot issue, as it extends beyond merely financial selfishness into a whole more complex area of sentiment, emotion and memory, which is all especially raw at the time of a death.

I think that there may be 2 layers of support for this policy- among the middle aged for the reasons that I describe, and amongst the young because the young are amazingly selfish and are all Thatcher's children and with any sense of the collective and the public eroded away seek to maximise what is their own in purely self-serving terms.
 

IdleRich

IdleRich
"Surely you're overstating the importance of this, IdleRich. I have never, ever heard any of my friends discussing inheritance tax."
Well, that was my question. I've never thought of inheritance tax except distantly and hypothetically but the Tories announce a change and the ratings go crazy, why? The point is that obviously I'd always underestimated the importance if IT. Clearly someone cares about it - it was Crackerjack who said it was particularly the young who were happy about it, I just said that was interesting.
 

gek-opel

entered apprentice
Also lets not forget that the polls are more volatile than they have ever been, which serves to over-emphasise what amounts to minor issues like this.
 

vimothy

yurp
I think that there may be 2 layers of support for this policy- among the middle aged for the reasons that I describe, and amongst the young because the young are amazingly selfish and are all Thatcher's children and with any sense of the collective and the public eroded away seek to maximise what is their own in purely self-serving terms.

That being the case, has government spending increased or decreased over the last thirty years?
 

gek-opel

entered apprentice
Its not as simple as that Vim. Its clear in a lot of the current Tory and New Lab rhetoric on social policy, the broken society, interventionism, anti-social behaviour etc that all sense of public good and public space has collapsed. It has collapsed not because public spending has declined (as you rightly point out it has of course increased) but for a number of subtler reasons. Take for example the idea of "public service". This has been aggressively attacked ever since Thatcher came to power in the late 70s, the result being an erosion of such a concept and the creation of an excessively managerial statistical method of extracting value from public service workers. Or another example the rise of the shopping centre environment, privately owned and controlled away from previous civic spaces, spaces which entailed a collective pride and responsibility.
 

vimothy

yurp
Its not as simple as that Vim. Its clear in a lot of the current Tory and New Lab rhetoric on social policy, the broken society, interventionism, anti-social behaviour etc that all sense of public good and public space has collapsed. It has collapsed not because public spending has declined (as you rightly point out it has of course increased) but for a number of subtler reasons. Take for example the idea of "public service". This has been aggressively attacked ever since Thatcher came to power in the late 70s, the result being an erosion of such a concept and the creation of an excessively managerial statistical method of extracting value from public service workers. Or another example the rise of the shopping centre environment, privately owned and controlled away from previous civic spaces, spaces which entailed a collective pride and responsibility.

Hmm - the whole notion of quant analysis to measure the effectiveness of public services has been in a large part one of the drivers of increased government spending (Nu Labour have stated this explicitly). And given the nature of public sector monopolies, necessary to judge and to try to increase efficiency. It's the market or the technocrats I'm afraid. But that shouldn 't some as any suprise. And I'm sure that if anyone can come up with a non-statistical method of the same, which still keeps the public sector public, everybody, from government to practitioners to researchers, would be very happy.
 

gek-opel

entered apprentice
Its indicative Vim of the invasion of market ideology at every level of governmental imagination. Quantitative assessment is a necessary part of maintaining pseudo-marketised systems of public service. Such an invasion of thought is precisely what has led to the collapse of the public sphere more generally. And all attempts to address "the broken society" will fail unless they address this, the root cause which is never mentioned. Why are people so repulsively anti-social, why does no one seem to want to maintain public spaces etc... has there been some kind of rupture elsewhere? Of course not, the reasons are remarkably simple to ascertain really. The problem being that the only form of radicalism which govt is able to consider is further marketisation of public services, further psycho-marketisation and deterritorialization of the public and private domain, until all that remains is the individuated consumer-citizen, and the norm of "choice".

Which is why Thatcher was the most radical PM we have ever had, because whilst she imagined that she would restore a kind of neo-1950s society, she really undid everything that made such a society function, forever.
 

vimothy

yurp
Or perhaps it's just that now everyone feels that they are entitled to everything. To a good life. To not having to work. To having enough money to satisfy all their needs. I want, I deserve. Perhaps it's not Thatcher that caused this, but a technocratic nanny state that tries to solve everbody's problems for them, which has ultimatley bread independence out of our society. Spend life on the dole & think it's your right not a privilege. (I have a friend who used to constantly go on about immigrants taking all the state owned housing that should be his by virtue of his skin colous / nationality. Used to make me laugh because in the eight years I knew him, he never once had a job. Lazy greedy people are full of shit)!
 

matt b

Indexing all opinion
there's a guy from sheffield university who has done some work for the joseph rowntree foundation on inheritance tax who was on the moral maze last week, who has made some interesting points:

only 5% of the population pays the tax

people who are in the group who would pay the tax at retirement end up not paying it as they take equity out of their property/ spend investments on covering the next 20 years of no income/ill health.

countries with the lowest differential between rich and poor (e.g. sweden)- often enforced through inheritance tax- also have the best quality of life (life expectancy, lower ill health etc) for the most wealthy (eg: those who would be due to pay the tax)
 

crackerjack

Well-known member
Reports on the reaction to the Tories pledge said it was particularly popular among the young.

knew I could find it eventually...

This is reinforced by a new Populus poll for The Times showing that the Tories’ tax-cutting pledges have not only been welcomed widely, especially by younger people, but are the main reason for the party’s big bounce in the polls this week.

http://www.timesonline.co.uk/tol/news/politics/article2599580.ece
 

crackerjack

Well-known member
there's a guy from sheffield university who has done some work for the joseph rowntree foundation on inheritance tax who was on the moral maze last week, who has made some interesting points:

only 5% of the population pays the tax

people who are in the group who would pay the tax at retirement end up not paying it as they take equity out of their property/ spend investments on covering the next 20 years of no income/ill health.

countries with the lowest differential between rich and poor (e.g. sweden)- often enforced through inheritance tax- also have the best quality of life (life expectancy, lower ill health etc) for the most wealthy (eg: those who would be due to pay the tax)

Oh for a Labour Party that would scream this stuff from the rooftops.
 

gek-opel

entered apprentice
Or perhaps it's just that now everyone feels that they are entitled to everything. To a good life. To not having to work. To having enough money to satisfy all their needs. I want, I deserve. Perhaps it's not Thatcher that caused this, but a technocratic nanny state that tries to solve everbody's problems for them, which has ultimatley bread independence out of our society. Spend life on the dole & think it's your right not a privilege. (I have a friend who used to constantly go on about immigrants taking all the state owned housing that should be his by virtue of his skin colous / nationality. Used to make me laugh because in the eight years I knew him, he never once had a job. Lazy greedy people are full of shit)!

This doesn't even stand up as a coherent view (in connection to the point we are discussing here Vim). I am seeking to analyse how and why all sense of BELONGING has been eroded. It seems perverse to posit a LACK of INDIVIDUALITY and independence as the key issue. A society run on consumerism has many benefits, as you are wont to inform us, but it also has unavoidable costs. One of these is that in shifting the perspective of the human being from a communal, collective one to a hyper-individualised one you end up with what the Tories term, melodramatically and yet strangely acutely "the broken society"-- who broke it guys? Oh that's right. "The greatest Prime Minister we have ever had".

Under this argument then Vim it is the combination of welfare state and lack of collective identity which leads to a failure to appreciate the terms under which society gives such payments, and the responsibilities that they entail. However, I also want to emphasise at this juncture that I think the issue of state-spongers has been overestimated, and is in some senses partly to be blamed on Nu Lab and their policy of shuffling people onto incapacity benefits specifically for the purpose of improving their statistics.
 

gek-opel

entered apprentice
there's a guy from sheffield university who has done some work for the joseph rowntree foundation on inheritance tax who was on the moral maze last week, who has made some interesting points:

only 5% of the population pays the tax

people who are in the group who would pay the tax at retirement end up not paying it as they take equity out of their property/ spend investments on covering the next 20 years of no income/ill health.

countries with the lowest differential between rich and poor (e.g. sweden)- often enforced through inheritance tax- also have the best quality of life (life expectancy, lower ill health etc) for the most wealthy (eg: those who would be due to pay the tax)

YES YES YES YES YES.
 
This doesn't even stand up as a coherent view (in connection to the point we are discussing here Vim). I am seeking to analyse how and why all sense of BELONGING has been eroded. It seems perverse to posit a LACK of INDIVIDUALITY and independence as the key issue. A society run on consumerism has many benefits, as you are wont to inform us, but it also has unavoidable costs. One of these is that in shifting the perspective of the human being from a communal, collective one to a hyper-individualised one you end up with what the Tories term, melodramatically and yet strangely acutely "the broken society"-- who broke it guys? Oh that's right. "The greatest Prime Minister we have ever had".


And isn't this perception of the 'broken society', this disappearance of the collective-public-civic as such, partly at least accountable for the increasing retreat into the 'sacred' regressive space of the Oedipal-patriarchal family structure, inheritance taxes now again seen as a further [ominous state] incursion and undermining of the incestuous-precious nuclear family unit, the last bastion of homey/uncanny territorialism?

But on the issue of inheritance tax, the wealthy have largely avoided such taxes since their invention, creating tax-avoidance corporate structures that are as old as patriarchal corporate capitalism itself (and not forgetting that the entire 'profession' of accountancy and auditing originated in response to the introduction of corporate taxation - 'Depreciation' for instance, a concept developed purely in order to reduce taxation on corporate profits by means of imaginary asset write-offs): most wealthy families establish Discretionary Trusts by means of which title in various assets are passed on to children or other relations, while managerial control is retained by the directors of the Trust (usually the parents, either until they die or the children reach a certain age), a model not far removed from the traditional joint-stock company with its separation of ownership (passive investor shareholders) and control (the senior management hierarchy). You think the likes of Richard Branson (or Bill Gates or Bono) are going to let 20-40 percent of their wealth to pass to the Government of the day? [after taxes on wealthy artists in Ireland were introduced a few years ago (prior to that artists paid no tax whatsoever, which is why people like John Boorman moved there) Bono abandoned his Irish citizenship and became a tax exile 'resident' in a noted tax haven but without having to ever actually emigrate, a trick every wealthy person in Ireland has accomplished to reduce their tax bills to zero]. Taxes are what everyone else pays, especially the poor in the form of indirect (VAT, Excise etc) taxes.


Under this argument then Vim it is the combination of welfare state and lack of collective identity which leads to a failure to appreciate the terms under which society gives such payments, and the responsibilities that they entail. However, I also want to emphasise at this juncture that I think the issue of state-spongers has been overestimated, and is in some senses partly to be blamed on Nu Lab and their policy of shuffling people onto incapacity benefits specifically for the purpose of improving their statistics.

The state now largely exists to promote privatized corporate welfare, while high-tech criminalizing (or mentally incapacitating) citizen welfare.

but4_large.jpg


Southwark Council have a little series of posters and billboards proclaiming their campaign on anti-social behaviour. A typical one runs:

'ENOUGH IS ENOUGH.

We will catch you.
We will prosecute you.
No excuses.
No exceptions.'

Then, as a final flourish,

'No place to hide'.

No liberal rhetoric here: I've spent enough time on estates to be quite familiar with the unpleasantness of constant petty violence and brutality. But this is horrible. Who is this 'we'? Council tenants? Doubtful, seeing as the number of people that vote in council elections in Southwark is roughly the same as the election in Blackadder the Third. The 'we', then, is the fundamentally unelected council itself - one that is no longer a provider of services, with housing, health, leisure all busily sold off to the highest bidder - which is left as a security state rump, making staccato declarations at the youth unlucky enough to be living in the remnants of their former, welfare state incarnation. Like the Benefit Fraud 'Dole Spotlight' ads (eg the one above), which are truly ethically vile in a state that has turned itself into an offshore tax haven, these posters are about surveillance, singling out, terror - the vigilante's simulacrum of popular action.​

And the future:

UK 2017: under surveillance

By Neil Mackay, The Sunday Herald

" IT is a chilling, dystopian account of what Britain will look like 10 years from now: a world in which Fortress Britain uses fleets of tiny spy-planes to watch its citizens, of Minority Report-style pre-emptive justice, of an underclass trapped in sink-estate ghettos under constant state surveillance, of worker drones forced to take on the lifestyle and values of the mega-corporation they work for, and of the super-rich hiding out in gated communities constantly monitored by cameras and private security guards.

This Orwellian vision of the future was compiled on the orders of the UK's information commissioner - the independent watchdog meant to guard against government and private companies invading the privacy of British citizens and exploiting the masses of information currently held on each and every one of us - by the Surveillance Studies Network, a group of academics
." More ...
 

Townley

Member
I was really disappointed in the Labour government for announcing this.

Why is everyone getting so worked up about it? Is it really this that has brought the Tories so many gains in the polls? They're planning to raise the threshold from £300k to £1 million, are there so many people who stand to inherit more than £300k and think that getting it all is the most important thing on which to base their vote?

Here's a link to an article on the mechanics behind the repeal of a similar tax in the US: http://www.lrb.co.uk/v27/n11/runc01_.html

"how did the repeal of a tax that applies only to the richest 2 per cent of American families become a cause so popular and so powerful that it steamrollered all the opposition placed in its way? The estate tax was the most progressive part of the American tax system, because it rested on the principle that the wealthy few, if they were not willing to bequeath their money to charity, should not be permitted to pass it all directly to their heirs. It had been on the statute book for nearly a hundred years, and throughout that time it had been generally assumed that there was widespread support for the idea that unearned wealth passed between the generations, creating pockets of aristocratic privilege, was not part of the American dream. Because it was a tax that so obviously took from the relatively few to relieve the burden on the very many, there seemed no possibility that a sufficiently large or durable coalition of interests could ever be formed to get rid of it. Yet during the 1990s just such a coalition came into being, and not only did it hold together, it grew to the point where the clamour for estate tax repeal seemed irresistible [...}

The repeal lobby built its campaign around two forms of politics, one all too familiar, the other daringly new. The familiar tactic was to play on the sense many people have that the rich are not after all so different from the rest, if only because they hope one day to become rich themselves. A poll conducted by Time/CNN on the estate tax issue in 2000 revealed that 39 per cent of Americans believe that they are either in the wealthiest 1 per cent or will be there ‘soon’. Armed with this sort of polling evidence, the pro-repeal activists spread their net as wide as possible in looking for individuals who felt that the estate tax was going to be picking on them before too long. But as well as preying on people’s naive hopes and fears, the case for ending the taxation of inherited wealth also rested on a more surprising claim: that the estate tax was, however you looked at it, simply ‘unfair’. Whether or not the tax was likely to apply to you, the argument went, it should be obvious on basic grounds of equity that it shouldn’t apply to anyone."

It was written a couple of years ago but it ends with a bit that was, sadly, prescient:

"this is a tale about the power of narrative in politics, and the increasing ease with which individual stories can be made the be-all and end-all of political debate. [...] In the face of an endless readiness on all sides to heed the unmediated voice of personal experience, it has become harder to sustain the bigger picture needed for any plausible defence of progressive politics. This shifts politics, inexorably, to the right. In Britain, during the recent election campaign, the battleground for this newly personalised form of politics was not tax, but defence, immigration, terrorism, security and crime, where all the arguments were played out on Tory territory. In due course, when the Tories recover their nerve and the state of the economy starts to place Gordon Brown’s reputation under pressure, the argument will move on to tax."
 

Slothrop

Tight but Polite
countries with the lowest differential between rich and poor (e.g. sweden)- often enforced through inheritance tax- also have the best quality of life (life expectancy, lower ill health etc) for the most wealthy (eg: those who would be due to pay the tax)
Vim would tell us that increasing inheritance tax decreases people's incentive to die.
 
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