I have, for various reasons, been thinking about inheritance tax recently; what it's for, how it affects people, and what a liberal and christian attitude towards it is. This also lead me into thinking a bit about philanthropy and the attitude we have towards it in this country compared to the attitude prevalent in the US.
Personally, I am of the belief that rather than being too high at 40% (as most people, and all readers of the Daily Mail seem to think); inheritance tax is not high enough, and should be 100% with a noticeably lower threshold. Before you all start throwing things at me in rage and disgust, hear me out as to how I come to this thought;
As a christian, and as a political liberal, I fundamentally believe in the idea of fairness (in some nebulus form) and against the idea of subserviance. This leads to a belief, not in equality of assets as the socialists (communists) would aim towards, but in equality of opportunity. I think that most people would agree with some kind of nebulus idea like this ("yes, of course everyone should have an opportunity to go to University, although clearly it is not right for everybody" etc.), although probably not have developed or refined it particularly.
The problem with inheritance is that in effect, it is random. If you inherit a large amount of money, it is not a reward of your endeavour or skill (unlike a high job income would be), nor of your financial need (unlike state benefits in theory), but is essentially random. (ie you happened to be lucky enough to have wealthy parents).
It goes even further - in some cases, the burden of inheritance is unbearably high. I have met and spoken to people who knew from a very early age (due to incredibly successful parents or grand-parents) that they would never have to work a day in their lives. Obviously there are exceptions, but a fair proportion appear to be totally unable to lead happy, contented lives. The reason seems to be that they have a low self-esteem (due to not having acheived anything for themselves) and are permanantly worried about investments crashing and them losing all the money - they know that were this to happen they would have no idea how to cope and constantly worry about it.
Surely what should be encouraged is a culture of philanthropy. If you have a large estate at your death, then great - why not leave as a legacy, not a large amount to your children for them to bicker and fight about, but to a charitable cause close to your heart. What Bill Gates is trying to do in the United States with his charitable foundation is clearly to be applauded and encouraged and shows some of this theory. In the US they seem to have a better attitude towards this - which contrasts strongly to the overriding thoughts here of - 'but I deserve my parents money - it's my right'.
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As for ''but I deserve my parents money - it's my right'.' which is, apparently, the prevailing attitude in Britain, I'd suggest that it's more parents thinking 'It's my money, I should be able to give it to my children if I want - after all, I've already paid taxes on it'. Which, as a liberal, I find hard to argue with. Losing your parents is hard enough without having to sell your home to cover taxes.
In theory, I can sympathise with you, but I doubt inheritance (as paid on the death of a parent) contributes to inequality of opportunity, or at least only at the very high end; the people who, as you say, know that they need not work. And even then, the money isn't sitting under a bed gathering dust, as you know.
The main source of inequality (of opportunity, that is) - in my ignorant opinion - is that richer parents can give their children more opportunities - at school, at home, on holiday, at work, whatever. You could try and legislate for part of that, and make everyone go to state schools, but as we can see today, better schools = higher house prices = richer people can afford better schools even in a state system. (Unless you say that the government should own all property near schools, as well. And then the truly rich can send kids overseas anyway.)
Again, you could try and legislate for it - force everyone to be raised in state orphanages would pretty much force some form of equality - at least with regards to the wealth of your parents. But I don't think that's going to (or should) happen.
Anyway, philanthropy. Great idea. (Depending on how you would 'encourage' it, of course.)
-Stuart
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