Immoral inheritance tax raid will alienate workers of all ages
IN 2015, George Osborne, then the chancellor, promised to lift all but the very wealthiest home owners out of the reach of inheritance tax. At the time, it became a key fixture of the Tory manifesto, championing the “Conservative dream”.
Today, that dream has all but died, with successive Tory governments’ attacks on drive, ambition and family.
In a last bid to do away with all of Liz Truss’s promises to the party membership, Chancellor Jeremy Hunt allegedly plans an inheritance tax reform that will see more families’ legacies swallowed up by the greedy state.
Although Rishi Sunak froze inheritance tax thresholds until 2025-26 as chancellor, more families will be forced to pay the tax due to fiscal drag.This is the phenomenon whereby inflation and increased wages push individuals into higher tax brackets due to fixed tax thresholds not rising with inflation.
Many Tory MPs rightly understand the resentment their constituents feel towards IHT. Levied at a rate of 40 per cent for estates with an excess value of £325,000, the tax is deeply unpopular. For many of us it is immoral, anti-ambition and un-Conservative.
NONETHELESS, further reforms to inheritance tax are far more than just a point of contention. They are both economically inconsequential and politically suicidal.
Firstly, IHT only raises about £6billion for the Treasury.When we consider that public spending over the last year alone was around £145billion, it is a relatively insignificant contributor to the public purse.
Moreover, Mr Sunak used the COP 27 climate summit to commit an extra £11billion of taxpayer money for climate-related initiatives. This is a generous commitment considering the dire state of Britain’s finances; with the Chancellor himself constantly reminding us of the “£50billion black hole” in the public purse. Yet, perhaps most infuriatingly, is the fact that our broken asylum system currently costs us about £2billion a year.
That is a third of the revenue generated from IHT, which could be saved by simply halting the influx of migrants illegally crossing the Channel.
To the average Briton, it would seem our Government is more interested in promising money overseas or spending it inefficiently than actually helping ordinary people here.
The Chancellor’s complete lack of creativity in targeting effective revenue generation demonstrates the growing disconnect between our politicians and the general public.
A second objection to a rise in IHT is that it is immoral.Why should a productive tax-paying member of society not be able to pass on their legacy to their family? As things stand, we are taxed multiple times for each pound we earn.We pay income tax, VAT, council tax, road tax, corporation tax, capital gains tax, national insurance and other clandestine levies.
Even pensioners must pay taxes when they withdraw over a certain amount from their already taxed pension funds.
How can a Conservative government consider more tax hikes when we are already facing the largest tax burden for generations? Aren’t the Tories the party of low taxation?
However, the most unfortunate consequence of an IHT rise is that it disproportionately affects working class people who don’t have the resources to stash their wealth away in overseas tax havens or trust funds.
Instead of allowing the transfer of wealth to younger generations, many struggling to buy homes or set up businesses, the Government continues its patronising raid on people’s homes. The moral high ground that many on the Left claim to justify such unfair forms of taxation is as unfounded as it is absurd. Who says the Government is better at spending inherited income than the families of the deceased?
WHAT if the state’s intended plans clash with the wishes of the dead family member? The Left’s argument of tackling inequality is equally unconvincing. Eradicating privilege is a losing battle. Humans are born with all sorts of privileges. Some are born with the ability to sing, others with a high IQ.
Shouldn’t we encourage people to work hard, become productive members of society and pass down their wisdom and hard work to their offspring?
What is the point of working your entire life, if your life’s work is going to end up in the hands of the Government?
Mr Hunt’s planned IHT raid shows the Conservative Party is no longer the party of ambition. And it is clear that Mr Sunak’s Tory government is intent on hacking away at an electoral coalition by alienating the young, middle aged and the elderly simultaneously.
‘The IHT raid shows the Tories are no longer the party of ambition’