Taxing inheritances.
I understand the Tories are about to discuss inheritance tax today
Many years ago I heard a suggestion, I can’t remember from whom, but probably the Liberal Party, which I found it very attractive.
The proposal was that inheritance tax should be charged not on the estate leaving the bequest but on the recipients receiving the bequests (note the plural.) The recipients would be able to inherit modest amounts tax free, but pay tax on big bonanza inheritances, or a multitude of modest ones.
Thus, if we define a “modest amount” as, say, £50 000 (though that’s beyond the dreams of avarice of many people) then an estate of, say £1 000 000, not all that unusual nowadays, given the price of houses, would not be taxed at all if the bequests were in 20 different bundles of £50 000, but would pay the current rate (40%?) if the whole million went to one lucky recipient.
This would go some way to reducing inequality in our society, and probably increase the level of happiness. It would also probably encourage innovation, as potential entrepreneurs would have the wherewithal for start-ups.
