Tim Worstall

Abolish Inheritance Tax

John B has been known to liken my campaign to abolish inheritance tax to increase social mobility as "Screwing for Virginity". But the basis is this. If there were no inheritance tax, people would not put the money into trust funds, the trustees of which prevent the inheritors from pissing it away. Thus more such inheritors would indeed piss it away, increasing social mobility, both downwards and upwards for those bright enough to do the debauching. As in this:

One university friend came into his money far too early. He worked his
way through a large inheritance in only a few years. “Where did it all
go?”, I asked afterwards. “Heroin and taxis,” was his laconic reply.

In

14 responses

  1. dsquared Avatar
    dsquared

    [ If there were no inheritance tax, people would not put the money into trust funds, the trustees of which prevent the inheritors from pissing it away]
    Yes they would; why do you think that so many trusts vested at 25 rather than 18?

    Reply
  2. Matthew Avatar
    Matthew

    Increase social mobility, render not needed the welfare state, would abolishing inheritance tax magically mend Wayne Rooney’s metatursal as well?
    http://timworstall.typepad.com/timworstall/2005/12/abolish_inherit.html

    Reply
  3. Andrew Ian Dodge Avatar
    Andrew Ian Dodge

    Inheritance does not bring that much to the treasury. It is merely an anti-inherited wealth tax that is a holdover from Marxist ideas of the last century.
    It evil, pernicious and spiteful thus should be abolished forthwith. The fact the Tories have not promised to do away with it right away is idiotic.

    Reply
  4. dsquared Avatar
    dsquared

    [It is merely an anti-inherited wealth tax that is a holdover from Marxist ideas of the last century.]
    No it’s not. It was the main subject of Jeremy Bentham’s “Supply Without Burthern”, in which he coined the phrase “nonsense on stilts” to describe most of the objections to an inheritance tax.

    Reply
  5. AntiCitizenOne Avatar
    AntiCitizenOne

    Just tax property ownership instead of taxing transfers.
    Does it REALLY matter that the name changes on the owner?

    Reply
  6. Jarndyce Avatar
    Jarndyce

    I thought you were a meritocrat, Tim, a proper liberal-libertarian, like? You’ve just come out as a Tory class warrior instead.

    Reply
  7. The Remittance Man Avatar
    The Remittance Man

    jarndyce,
    Surely the liberal-libertarian ideal is that what is ours is ours to deal with as we sees fit.
    Let us assume that you are dying. You have a bunch of dosh and are wondering what to do with it. In a libertaruian world one would have a myriad choices. You could piss it against the wall in one last orgy of fun. Or you could tell your lawyer to give it to Battersea Dogs Home so the woofies can piss it against lampposts. Alternatively you could give it to your kids so they can piss it against the wall.
    Hell, if you were completely bonkers, you could put it in a brown envelope and give it to the Government . The only problem with this being that a liberal-libertarian government would be doing so little anyway they probably wouldn’t know what to do with your largesse.
    But the big thing about the liberal-libertarian world is that you, the owner of the estate, would choose where the money went. The socialist inheritance tax deprives you of that choice. Big Brother makes the decision for you, implying that you are too selfish or too stupid to make those decisions.
    Personally I prefer being able to make my own decisions.
    RM

    Reply
  8. Matthew Avatar
    Matthew

    If you’re really obsessed with making your own decisions, particularly being able to do with your money what you want I suspect on your deathbed the rate of inheritance tax will be a rather minor concern.
    Tim adds: Ooooh, I dunno. Jimmy Goldsmith was famously smuggled into Spain to avoid dying in France so that his estate was not taxed.

    Reply
  9. dave heasman Avatar
    dave heasman

    “Inheritance does not bring that much to the treasury.”
    Oh yes. It doesn’t collect much money but we’re all up in arms about it. That’s because over the next few years it will start collecting quite a bit. Could someone please explain how the rise in house prices is a result of personal virtue, assiduity or perspicacity? It’s a windfall, it’s a function of a number of government-assisted circumstances, and it’s perfectly valid for the Government to grab some of it at the point in time where the owner has no further use fr it.

    Reply
  10. AntiCitizenOne Avatar
    AntiCitizenOne

    “nd it’s perfectly valid for the Government to grab some of it at the point in time where the owner has no further use fr it.”
    The fall in house price affordability has been caused by the states inflationary policies, and now you are saying that they deserve a bit of it!
    Now THAT’s cheeky.

    Reply
  11. Jarndyce Avatar
    Jarndyce

    RemittanceMan:
    I’m afraid liberalism-libertarianism is inseparable from Toryism if the sum total of its ambition is to preserve the wealth and power arrangements that we have at the moment. That’s not liberal or libertarian, in any more than the meaningless sense of “what we have, we keep”, which is nothing to do with liberty. That’s what abolishing inheritance tax is for: the clients.

    Reply
  12. The Remittance Man Avatar
    The Remittance Man

    Jarndyce,
    As Tim points out; giving US the choice doesn’t necessarily mean maintaining the status quo. Pa Remittance is determined that me and my brother will inherit nothing. He desperately tries to blow our inheritance every chance he gets (when the Mater Familias isn’t looking, anyway). And I don’t know about little Brother, but I have every intention of blowing what little he does pass on to me on the poor and deserving.
    There are some girls working for Madame Claude who haven’t had a manicure in days, the poor things. And as for the condition of distillery workers in Sotland; it’s absolutely scandalous. rest assured I shall be making sure they all get a decent bonus the first Christmas after Pater pops his clogs.
    I confidently predict that within a year of his passing I shall be as poor as I was before, but at least I would have chosen the benficiaries.
    RM

    Reply
  13. Mark T Avatar
    Mark T

    If you apply capital gains tax properly – with a 10 year taper for example, then you no longer need IHT (or for that matter tax relief for pensions)Death would trigger a capital “event” an any tax due on gains would be paid. The inheritor would then be liable for any subsequent CGT at their marginal rate. Oh and what we are is what we keep is everything to do with liberty.

    Reply
  14. Bernard Keeffe Avatar
    Bernard Keeffe

    Inheritance tax at the present level has a bad economic effect. It prevents accumulation of national capital through saving. A national economy depends on the saving ratio -it is far too low in the UK. The emphasis here is on consumption; massive borrowing by the public and government for consumption. The tax money goes from the savers to consumers who spend it on imports or foreign holidays and so harm the trade balance. The elderly are told – spend it rather than give to Brown.
    AUstralia and I believe Canada has abolished it.
    Sweden too – though they have a wealth tax. The social effect is to keep down the very group who are sensible enough to save while favouring feckless spendthrifts who having no savings demand to be kept by the state.

    Reply

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