Behold the power of the blog! Two weeks after I propose that inheritance tax should be abolished in order to increase social mobility (the so called "bonking for virginity" argument) the Tories come out with a proposal to do exactly that!
Slightly more seriously, there’s going to be a huge outbreak of indignation on the left. How dare anyone let the plutocrats pass on their unfair privileges down the generations? Well, quite. Only, there’s one major problem with this argument. The rich don’t actually pay inheritance tax. There’s so many things exempt from it (farmland, AIM stocks, family businesses, a huge array of trusts) that anyone with a serious sum of money doesn’t actually pay it, or at least not in any great amount. It’s those in the 1x to 3 x the tax free limit that do in fact pay it: a tax supposedly designed to hit the very rich actually gets at the petit bourgouis (and yes, given house prices in the South, I think it fair to call someone with £1 million in assets petit bourgeois).
Even better is somethng I haven’t seen in the papers (as yet) but is on the ASI site. Lifetime Savings Accounts. However it’s dressed up this is a move to something highly desireable: consumption, not income, taxation. What you stick into your savings gets tax relief: this is the same as saying that you only pay tax on your consumption, not your income. As long as the tax is then collected when you take money out of that savings account (on the same basis as any other income in that year) then we’ve got there. Consumption taxation.
While this isn’t currently being proposed, perhaps someone should: add to this system BOGOF. For the low paid, buy one get one free. Those below some level of income (or assets) for each pound they put into such an account they get another one deposited there by the Govt.
The aim, of course, is to make everyone a property owner, everyone petit bourgeois. If you like, the abolition of the working class, those who rely solely upon the product of their labour for their income.
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