Question for the wealthiest 10%... how?

bigadaj

atypical wrote: »

Interesting point of view here:
https://www.youtube.com/watch?v=GoV7qzwzoh0

He defends inheritance tax on the basis that:
1) As a %, after the allowance, the rate is very low.
2) It cancels capital gains tax which might otherwise be due at a higher rate.
3) As the money is a tax on money moving between generations, inheritance tax acts to reduce the wealth gap in society leading to a more harmonious society from which everyone benefits.

Controversial. Never considered the societal aspect before.

Point 3 is the big one for me,the most content and successful societies are those generally that are most equitable. Social mobility in the uk radically improved in the uk from the sixties but is now a lot worse than it was twenty years ago. Inheritance tax is obviously something that has the ability to increase social mobility theoretically, though you'd have to exclude the loop holes for the genuinely wealthy to have any great effect. The obsession with hitting savers currently would also seem to make the reduction of inheritance favourable to current governments as the only growth can seemingly be achieved by spending all that we earn, or ideally more!

atush

As the money is a tax on money moving between generations, inheritance tax acts to reduce the wealth gap in society leading to a more harmonious society from which everyone benefits.

Actually, inheritance these days (from the generation first/second able to buy their own homes) enables wealth to pass effectively from one generation to another. Taxing it, at these lower levels (ie over the threshold) does not help the masses all that much compared with the boost to the economy the average inheritance over the threshold splt between multiple beneficiaries.

It was instituted to penalise the very wealthy who left all their estate to one beneficiary who did not spend the proceeds.

Now it affects multiple beneficiaries who inherit much smaller sums individually who may mostly spend this money into the economy (such as buying houses, cars, holidays, white goods etc).

It could be argued the tax gained is does not benefit the economy so much as it would from the disbursement of these funds into the wider economy.

MarcoM

gadgetmind wrote: »

If you impose draconian inheritance taxes, then it's taxed as you earn it, then again when passed onto your dependents, and yet again when they spend it to (probably) buy essentials.

Quite how much of our hard-earned money does HMG want to pocket?

I would also add that even giving one penny to anyone who does not wish to contribute to the system makes iht unfair imho.

clairemosa

I totally agree with Glen clark. We pay taxes for essential services and for essential developments.

grey_gym_sock

atush wrote: »

Now it affects multiple beneficiaries who inherit much smaller sums individually who may mostly spend this money into the economy (such as buying houses, cars, holidays, white goods etc).

buying houses isn't really spending, it's just buying assets. (though if you then redecorate, that's spending.)

not a very high proportion of inherited money will be spent, because the larger estates tend to go to with ppl with more money already, because your parents' wealth is a good predictor of your own wealth. and when somebody receives some more money, then the richer they are to start with, the smaller is the proportion of the new money that they typically spend.

most ppl divide among their children, so most of a large estate only goes to an average of about 2 ppl. unless richer ppl tend to have more children?

whether the money would be used more productively if it's collected as tax is a bit hard to answer, as public spending is so varied. but if you're happy so long as it's spent, you should be happy for it to go in tax. because it's all spent!

gadgetmind

bigadaj wrote: »

Social mobility in the uk radically improved in the uk from the sixties but is now a lot worse than it was twenty years ago.

Really?

I have met a few people who blamed their background for their situation, but also huge numbers of other people who started from similar/worse positions and didn't let it hold them back.

Linton

gadgetmind wrote: »

Really?

I have met a few people who blamed their background for their situation, but also huge numbers of other people who started from similar/worse positions and didn't let it hold them back.

Though perhaps in your line of work and life style you would never meet a far larger group of people whose potential was never realised but dont blame anyone as they could not conceive of anything different.

Inheritance tax (previously death duties) largely removed the rich land-owning class which dominated public life until the 2nd world war and were still highly influential until the 1960s.
It has been less effective since then in reducing inequality. Possible causes:

1) Threshold is too high
2) Smaller family sizes mean that individual children get a higher percentage.
3) Large estates were difficult to hide, wealth is now in less tangible forms. IHT is too easy to avoid.
4) Longer lives mean that wealth can be passed on before death
5) Cultural and educational "inheritance" is more important than inheritance of physical wealth.

Glen_Clark

atypical wrote: »

Interesting point of view here:
www.youtube.com/watch?v=GoV7qzwzoh0

Thats a good video - 8 minutes long but its 8 minutes well spent.:T
Equally telling perhaps, is the top comment, which simply says 'you're a c*nt'
Objectors to IHT can only answer with Ad Hominen, just like here.

(I didn't intend to get political, but cannot sensibly discuss where the rich get their money from without mentioning inheritance.)

Glen_Clark

atush wrote: »

Actually, inheritance these days (from the generation first/second able to buy their own homes) enables wealth to pass effectively from one generation to another. Taxing it, at these lower levels (ie over the threshold) does not help the masses all that much compared with the boost to the economy the average inheritance over the threshold splt between multiple beneficiaries.

It was instituted to penalise the very wealthy who left all their estate to one beneficiary who did not spend the proceeds.

Now it affects multiple beneficiaries who inherit much smaller sums individually who may mostly spend this money into the economy (such as buying houses, cars, holidays, white goods etc).

It could be argued the tax gained is does not benefit the economy so much as it would from the disbursement of these funds into the wider economy.

Now you are really struggling aren't you.
Are you seriously trying to tell us the rich are more likely to spend the money into the local economy than the poor :rotfl:

We have people working for £9k a year, with no prospect of owning their own home, but paying taxes towards the care home fees of elderly people so that their relatives can inherit a second property they have not earned.

gadgetmind

Linton wrote: »

Though perhaps in your line of work and life style you would never meet a far larger group of people whose potential was never realised but dont blame anyone as they could not conceive of anything different.

My work does mean that I tend to only work closely with bright people, but I take part in a lot of very inclusive social activities and eat/drink in a lot of places that many people wouldn't step inside.

I think a lot of people, from all kinds of backgrounds, fail to recognise their full potential. I've seen kids grow up with everything they could want, but who waste every advantage, and I've seen many others who work on their knowledge and skills, seize every advantage, and fly high.

Of the area where I grew up, Wikipedia says, "xxxx is considered to be amongst the most deprived areas in the country. Examples of disadvantage found in the district include low educational attainment, low skill levels, and concerns about crime, anti-social behaviour and lack of facilities."