Tim Worstall

A Reaction to Byers on Inheritance Tax

Quite breathtaking:

But it was immediately stamped on by the chancellor’s friends, led by
the trade and industry secretary Alistair Darling, who accused Mr Byers
of headline chasing.

Headline chasing? Isn’t that what the whole project has been based upon?

The response from Mr Darling and the Treasury was emphatic. "It may
make for a headline, but I don’t think it makes for a prudent tax and
spend policy," Mr Darling said. "Inheritance tax brings in about £3bn a
year and if you get rid of it it follows that some other tax has got to
go up or you’ve got to cut public spending, on health and education for
example."

Or mindless nonsense perhaps. No one can possibly argue that out of the 450 billion of current public expenditure we couldn’t cut less than 1% of it. Getting rid of ID Cards would be a grand start. Place your favourite spending cuts in the comments: abolishing the Department of Trade and Industry would save 10 billion a year and it’s something we ought to do anyway, waste of time, money and effort as it is. Leaving the EU would save a comparable amount perhaps?

One supporter of Mr Brown said: "I don’t think Stephen Byers actually
believes a word of this nonsense. He’s probably just trying to get a
bit of attention or stir up some division in the party, but even the
most hardcore Blairite MPs think he’s lost the plot this time."

I too think that Byers has lost the plot but not specifically this time. Rather, like the stopped clock, still right occasionally.

In

6 responses

  1. The Remittance Man Avatar
    The Remittance Man

    Targets for some effciency boosting slashing?
    How about the unelected regional assemblies, the Health and Safety Executive, every joband department with the word “diversity” in its name.
    Add to that a savage slashing of MP’s allowances and I would suggest that you would have sufficient “slack” not only to abolish Inheritance Tax but a few others as well. How about transfer duties?
    RM

    Reply
  2. Matthew Avatar
    Matthew

    It’s perfectly true you could cut £3bn of public spending, but then that could be used to cut income tax, or raise the personal allowance, all of which (as Chris Dillow has been saying) far more sensible that cutting inheritance tax, and I would suspect more popular.

    Reply
  3. Pete D. Avatar
    Pete D.

    Crumbs, you guys have still got an inheritance tax! We got rid of that idiocy here in Oz back in the late ’70’s.
    You don’t need an inheritance tax if you have an appropriately designed capital gains tax.
    Inheritance tax is just a leftover of the old class warfare. Blimey, its only 3bil out of 450bil, get rid of it.

    Reply
  4. Bob B Avatar
    Bob B

    The inheritance tax is all part of the fiscal system devised for screwing Londoners in order to redistribute income and wealth from London to other parts of the country. London house prices are higher on average than in other parts of the country so the estates of London residents are more likely to fall victim to inheritance tax because houses are the highest valued assets most folks ever own.
    In terms of the balance between all tax revenues collected from resident taxpayers and identifiable public expenditures, the London region makes a positive net contribution to the national exchequer:
    “The net contribution which development in Greater London makes to the national exchequer—currently estimated at between £10 and £20 billion per annum.”
    http://www.publications.parliament.uk/pa/cm200203/cmselect/cmodpm/492/492m20.htm#n43
    All that has been carefully – and predictably – fudged out of this debate over abolishing inheritance tax. We can be pretty sure that the great majority of folks living outside London in Britain will not be supporting the abolition of the tax.
    Anyone for joining the London Independence Party, better known as LIP?
    “Twenty million people live within an hour and a half of central London. Its economy is bigger than those of Austria, Sweden or Russia.”
    Tony Travers of the LSE
    http://www.newstatesman.com/200004100061

    Reply
  5. Chris Avatar
    Chris

    £3 billion is not ‘cuttable’ as it is within the normal margin of error on Government expenditure. You would need a figure of circa £15bn to actually say that you’d ‘cut’ Government expenditure. Perhaps Oliver Lettwin has an opinion on this?

    Reply
  6. David Gillies Avatar
    David Gillies

    Abolish, erase, efface over night (and burn the paperwork as Sean Gabb advises)
    DCA
    DCMS
    DCLG
    DEFRA
    DfES
    DFID
    DTI
    HSE
    OeE
    FSA
    To be scaled back to at most 25% of their current size:
    DH
    DfT
    DWP
    FCO
    HMRC
    HMT
    HO
    Defund, with immediate effect, all QUANGOs.
    Shut down the BBC and remove all taxpayer support.
    Leave the EU.
    Prohibit receipt of state benefits for immigrants for the first seven years of residence.
    Scrap all industry and agricultural subsidies. Unilaterally abolish all tariffs and duties.
    That’s just for starters, but I reckon I’ve saved about £100 billion right there. With a bit more belt-tightening we should be able to halve public sector spending, fire about 80% of Tony’s Turkey Army, and see the economy go like gangbusters.

    Reply

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