OK, we are going to get political – after all. its our site, we set the rules!
Letter in yesterdays (Thursdays) Times:
Sir, Critics of inheritance tax say that it is a second tax on those who have already paid income tax. This is based on the erroneous idea that the deceased person, not the windfall inheritor, pays the tax.
It is remarkable that so few free-market conservatives, who wish to reward effort and discourage dependency, subscribe to Andrew Carnegie’s Gospel of Wealth (1889), which called for heavy estate duties, partly on the grounds that children of the rich should not inherit private welfare states.
Adjusting the tax rate to allow for house prices should not obscure the basic and indeed conservative justice of inheritance tax.
Professor Rupert Wilkinson
Have you ever read so much claptrap? The problem comes from social liberals – and, alas, that does the good and noble tradition of liberalism no favours -using tax as an instrument of social policy.
Tax is there to run the state – to pay for hospitals, schools, prisons, roads and democracy. Its not there to run social policy, and its certainly not a purpose of taxation to be used as a tool for controlling whether or not its virtuous for the next generation to inherit the wealth of the last (surely, the best people to decide that are the last generation – either spend it or leave it for the kids, whats difficult in that decision?).
A lot of pseudo intellectual clap trap gets loaded on taxation and fiscal policy – I think it does us all good to take a step back and realise that tax is about funding Great Britain PLC – no more, no less.
By contrast, two other correspondents in the Times get it right:
Sir, I am deeply disappointed at Alistair Darling’s determination to do away with taper relief for those who start their own companies.
He has perhaps never started or run a company of his own, so he may know little of the knife-edge situations, the nail-biting, the taking of minimum pay or no pay at all, the putting-up of your house as security, the dips of fortune (like a postal strike) that appear from the blue and threaten your business.
That is why it is so wrong of him to lump us together with the average investor on the stock exchange. Small entrepreneurial businesses are the backbone of this country — and he has seen fit to punish us.
Sir, The 80 per cent increase in tax imposed upon entrepreneurs building up their own businesses is even more severe than it might appear. In the era preceding the introduction of taper relief there was quite properly an indexation allowance in respect of inflation to ensure that tax was imposed on real and not inflationary gains.
Taper relief was substituted as a simpler way of achieving this result. Unless indexation is reintroduced in conjunction with the 18 per cent flat rate levy, the impact on entrepreneurs may be twice as great as the already very severe blow to those who have put many years into building a successful business.