Inheritance Tax: the fairest tax of all

Having been initially put off by too much cheese and too much cynicism, I’m a very late (six years behind) convert to the West Wing. It’s an enjoyable popcorn drama about an incredibly weak, apparently liberal, Democrat US administration that fudges every issue it has to deal with, whether it needs to or not. So the series is a lesson on how easily the politics of compromise combine with a desire to be popular and corrupt.

But this week it did get me thinking about the idea that African-Americans should receive financial reparations for slavery. There’s ongoing battle stateside that has seen law suits filed against businesses whose corporate predecessors profited from the slave trade. Instinctively it strikes me as a nonsense as no former slaves survive and several generations have passed, but the idea is far from silly.

The problem is inheritance; the birthright lottery whereby some gain wealth by luck alone and others do not. It is not unreasonable to suggest that Americans of European descent are more likely to be wealthy than Americans of African descent because the wealth of their forebears has cascaded through the generations.

And all this provides another reason why inheritance tax is the fairest of all taxes. Not only is it a tax on wealth that has not been earned, it is redistributive in a way that helps make society fairer.

Yet inheritance tax has an incredible ability to leave Conservatives spitting feathers. Which is why leading Tory blogger Iain Dale is so excited at the BBC using Eastenders characters to illustrate how the property boom has taken many above the inheritance tax threshold.

Perhaps they’re taken in by a romantic notion of creating some legacy that lives after them; a form of immortality. In truth few of us are remembered beyond a couple of generations and our grandchildren are unlikely to think of us when the time comes to absorb our children’s fortunes. And the exceptions the BBC uses like Michael More-Molyneux who continues to dine out on the glories of his forebears and the Butlers who hope to continue ‘a family tradition of physical toil’ seem rather pathetic.

From the moment they feed and clothe us we share in our parents’ wealth, but it cannot be healthy to remain dependent upon them into adulthood and after they’ve gone. Defenders of inheritance tax need to grow up and encourage the descendents of the Butlers and Michael More-Molyneux to make their own way in the world.

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  1. Pingback: Inheritance Tax: Tory plans don’t add up… but so what?

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