Killing off Inheritance Tax
12 Oct 2007
A letter from Tom Miers published in The Herald on 12th October
Those who favour inheritance tax should be careful what they wish for. Like most taxes, it is the parent of many unintended consequences.
Death duties actually increase inequality in society, because they encourage people to spend their wealth before they die. Not only does this prevent a transfer from rich to (usually) poorer heirs, it increases the difference in spending power between rich and poor.
Inheritance encourages families to hold on to assets, creating in essence a substantial pot of long-term savings. Thus they provide finance to society at low, long-term rates. It is an irony that the strongest critics of our spendthrift, consumer-boom economy are often those most eager to tax this important source of savings and wealth.
And it is not as if death duties do the government much good. They are very expensive to collect, costing as much as 50p for every pound raised. Most do their utmost to avoid inheritance tax, undermining society’s respect for government and the rule of law. The main beneficiaries are lawyers.
A happy consensus has arisen against this iniquitous tax. Let us salute the politicians, and look forward to the day when they kill off death tax altogether.