Tax On Tax

[schmunk]

But what if hes a student, got no money to his name or has debts? He inherits a house worth 300k, BUT, has to pay 10k in tax, bit harsh having to sell your inheritance without going into debt to the government

'sell your inheritance'... He'd end up with £290,000 cash!

Poor him.

[oralpain]

I feel if it's yours, it's yours to do what you will with. You can squander it, burn it, wipe your ass with it, give it away, bury it on a desert island, or even let your kids have it when you die. At least that how I think it should work.

[iranu]

Sorry Schmunk I was so incensed about people wanting to give a percentage of my property to the government just because I have died with more than 275 grand that I forgot about the threshold and there for my calculations are wrong.

However, the principle still holds. TBH I couldn't care less whether someone inherits 200 billion quid or 50p. I am not bitter about people being more fortunate than I am and getting large inheritances.

There would be no limit. It is an immoral tax and I would abolish it.

As for your assumption that the government is so efficient at spending that it just couldn't do without the extra and that we'd have to knock down schools ' n' 'ospitals,I say wake up and smell the coffee. Governments are the most inefficient bodies for spending money. The individual is the most effecient at spending money. The answer to how would you do it for less is very simple.

Raise productivity, reduce wage inflation in the public sector.

Currently productivity is falling (government stats say this - I will find out exactly how much by) This means that less is done next year than this year for the same cost.

Ontop of that you are paying people on average an extra 5.8% next year to do less than they were doing the year before.

It's this double wammy that's hoovering up tax, so much so, that Mr Brown has decided that his own statisticians are wrong and he has decided to make them do the work again till the answer agress with him.

Imagine if a private business used this model. They wouldn't be in business very long. Now there will be the "oh, but nurses don't get paid very much and should get more" brigade, whinging and I agree whole heartedly with them, but buy a copy of the Guardian and look at the job pages and you will see all of the unproductive non jobs advertised in teh public sector.

1 in 4 people work for the state (and no they are not all doctors and nurses and policemen and firefighters)

"This creation of a payroll vote of citizens on benefits on a scale never before seen has gone hand in hand with a massive switch of resources away from the productive private sector to the increasingly unproductive state sector. Labour may crow about more doctors and nurses, but the reality is more useless administrators, and "managers" who are not allowed to discriminate between good and bad employees.

You don't need to be an economist to fear that this replacement of wealth generators with wealth redistributors is asking for trouble. The Brown boom has been built on debt, both public, private and somewhere in between, in the shape of the Public Finance Initiative. There's a limit to how long this can go on, and the first signs of borrowing fatigue are now appearing in the high street. Again, this is far from a crisis, but it will not help the Chancellor's Budget arithmetic. He's going to have to borrow more, and tax more too." Neil Collins - city comment - Daily Telegraph

You might also like to bear in mind the fact: Reducing the level of taxation increases the revenue in the government coffers.

[iranu]

Oh, how very humanitarian of you.

So your off to Niger today are you being the good humanitarian that you are. Obviously you'll be spending the next few weeks distributing aid to the poor and starving so won't be posting on hexus today. No, well perhaps you might like to do the next best thing and make a donation instead like I did. I'm sure your capable of googling for the red cross or other charity of your choice.

[Dougal]

1 in 4 people work for the state (and no they are not all doctors and nurses and policemen and firefighters)

I would agree with that, but you have to see why.

I am working as a summer temp for my local council. I am programming VBA to make life easier for the people that work here.

The main one is for timesheets, so that everything is correctly logged and tax is NOT wasted. Basicly, if it ain't on this database, you don't get paid.

ANyway, people wise.

Everything that you use has a council bit attached.

In the Traffic Management and Road safety where I currently am there is over 100 sub departments. Each with 2 or more people attached.

You know those walking buses for schools? 5 people work on those CONSTANTLY setting them up, communicating with the school. Engineers are also involved, to find the safest, healthiest routes for them to take. Then you have the people that check everything on site. Test the paths, and check that everthing runs smoothly.

Twice as many as that work on cycling profficiency courses.

But only 1 person is full time on safety incident logging. She's 4 months behind at the moment due to the sheer amount of data.

Then everyone has a phone at there desk with an individual number, 30% of their time is spent on the phone listening to the general public moaning, debating, arguing.

I'm not saying that the government is massively inefficient, nor am I saying that inheritence tax is justified.

Just want to show you that there is a different view.

[Rave]

Rave does not understand how inheritance tax works. The tax is paid on the value of the estate. For example if I am the sole beneficiary of £500,000 estate I have to pay 40% tax (200k) on that estate before I am allowed to inherit it.

Feeling stupid now?

Edit: I suppose that answer doesn't make me look very clever either, so I might as well answer the points you made. You're very good at putting words into people's mouths iranu- it's a bad habit which you should avoid. Argue with what I have said, not with what you think I believe.

Secondly, why are you always looking at it from the inheritors POV - what about the person who owns the estate?

They're dead, so I don't care about their opinion, and neither do they any more.

Surely it should be upto the individual to CHOOSE how they distribute their estate/wealth on dying.

Why? They can't choose whether to pay tax or not when they're alive.

If I buy a car for my child should the government get it's slice just because my child is benefitting? He didn't earn it so therefore I should not be generous. Sh1t, the starving africans in Niger didn't earn the money I gave them (through oxfam) at the weekend. Perhaps I shouldn't have donated, after all they didn't earn it. Perhaps it would be good if the government took 40% of my donation.

Yes, but the great difference is that those people are literally starving to death, whereas in this country we have a welfare state which ensures (pretty much) that nobody will ever starve. That welfare state is paid for by taxes.

Perhaps Rave would prefer the pensioners son and his family to continue to rely on the State for hand outs

Well, as schmunk has already pointed out your example is a bit rubbish, but in any case, yes it's fine to carry on relying on the state, because those handouts will be in part or in whole be paid for by the inheritance tax.

Raves seems to want an idealised communist state where you are stripped of everything the day you were born, shoved into a government establishment where everyone gets exactly the same quantity of food, exactly the same care and attention, schooling etc etc and is then kicked out at 18 to make it or end up in the gutter. And when you do make it all your wealth is taken by the state when you die in order to start the whole wretched cycle again.

Rave you seem to be jealous of others who have a little money.

PEOPLE ARE NOT BORN EQUAL, GET USED TO IT, IT'S CALLED LIFE.

As I've already said, I'm not at all jealous- I myself am close to the official definition of poverty (I.E. houshold income of less than 60% of the average) but I have wealthy relatives, so unless I fall out with all of them there's little chance I'll die in penury. I also understand full well that communism is a good idea in theory and completely unworkable in practice. I know that capitalism is a far better system. However, just because the capitalist system we have now works, does not mean that completely unrestrained capitalism would work better.

In the post after this you argue that our government is wasteful and guess what? I'd agree with you for the most part. The thing is, that's irrelevant to this argument. The point is that the government needs to raise a certain amount of money through taxes to fund its spending program, and they should raise that money in ways that are fair. The question is whether inheritance tax is a fair tax- and for the reasons I have stated I do believe that it's fairer than most.

You make the point that most people have more than one child, and hence more than one beneficiary to share their inheritance. If you split it three ways, the tax free sum still amounts to more than £91,000, which IMO is still plenty. However, I wouldn't particularly object to the threshold at which inheritance tax becomes payable increasing incrementally where the deceased has four or more surviving children.

[schmunk]

It is an immoral tax and I would abolish it.

What's a moral tax?

As for your assumption that the government is so efficient at spending that it just couldn't do without the extra and that we'd have to knock down schools ' n' 'ospitals,I say wake up and smell the coffee. Governments are the most inefficient bodies for spending money. The individual is the most effecient at spending money. The answer to how would you do it for less is very simple.

Raise productivity, reduce wage inflation in the public sector.

And privatised services are always SOOOO efficient and value-for-money (Railtrack, Jarvis [school PFI], EDS)

How do you plan to 'raise productivity'? Not Carrot ('reduce wage inflation'), so Stick it is, then...

You might also like to bear in mind the fact: Reducing the level of taxation increases the revenue in the government coffers.

Eh? How so?

[schmunk]

So your off to Niger today are you being the good humanitarian that you are. Obviously you'll be spending the next few weeks distributing aid to the poor and starving so won't be posting on hexus today. No, well perhaps you might like to do the next best thing and make a donation instead like I did. I'm sure your capable of googling for the red cross or other charity of your choice.

You are complaining about the relatively wealthy being taxed (and if one has just inherited £275,000+ then one is relatively wealthy...), when that money will be distributed back to the community, particularly to the poorer members of society.

Perhaps humanitarian was the wrong word, I should have said that you were compassionate:

PEOPLE ARE NOT BORN EQUAL, GET USED TO IT, IT'S CALLED LIFE.

p.s. I already give to charity, thanks.

[Dougal]

If you're inheriting £275000+, could you loan me a bit for uni?