Friday, 4 September 2009

A tax on inheritance for a better start in life?

Stuart White on LabourList- as part of the the 'everyone with a stake and a say' series- has argued that a greater proportion of the the total value of inheritance should be taxed. The proceeds should then be reinvested to create a greater platform of wealth for each individual in the form of savings so that they have the freedom to make their own way in life. Think of it as turning all into trust fund babies.

He takes inspiration from Thomas Paine who argued:
"When a young couple begin the world, the difference is exceedingly great whether they begin the world with nothing or with fifteen pounds apiece. With this aid they could buy a cow, and implements to cultivate a few acres of land; and instead of becoming burdens upon society...would be put in the way of becoming useful and profitable citizens."
Stuart concludes by arguing:
"Of course, it is an understatement to say that inheritance tax is unpopular. But it is important for social democrats to understand what their own principles imply. Our principles imply much heavier taxation of inherited wealth – which we can then link to initiatives to widen asset ownership.

In view of this, we should not simply capitulate to public opinion, but make the case for what we think is right. One thing is for sure: until we start doing so, wealth inequality is going to go on rising and our warm words about ‘opportunity’ and ‘fairness’ will become even more divorced from the reality of British society than they are now."
Personally, I believe that the left has neglected the issue of wealth at the expense of an obsession with income. Of course, the two are not unconnected- far from it- but they need to be considered alongside each other.

2 comments:

  1. I wonder why the Right, also, should not be more disturbed about wealth inequalities - particularly the pro-enterprise, libertarian Right.

    The article by Irwin "not exactly a Leftie" Stelzer on why Inhertitance tax is good (in the Spectator just as Osborne was saving his political skin in 2007 with his rank appeal to self-interest amongst the Tory conference goers), is one of the classics. It should not only be a left-wing preserve, I reckon: massive wealth inequalities are rotten, no matter what system you come from. They indicate rent-seeking and a diminution of opportunity.

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  2. It's a worthwhile restatement and confirmation of centre left principles, and worth considering if the party readjusts its position some time in the future.

    As said though, if we can be wrong footed by the Tories giving a thousands of pounds of tax break to millionaire children, the electorate aren't on side, and "making the case" is exactly what we should do more of.

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