I view it as a âwe didnât get it right with all the other taxes, so hereâs another when you canât even complainâ. All most will do is go out of my way to avoid it, making it redundant.
Fix the other taxes and tax avoidance and it wonât be necessary.
Iâm not suggesting it because itâs necessary, I just think itâs a much better tax than the others. Iâm a big fan of increasing it even outside of the current deficit.
You could reduce the burden of other taxes if you made very significant changes there and it wouldnât have massive impacts on peopleâs day to day affordability and it would reduce persistent inequality.
Too easily avoidable. Take a equity loan against your house. Give the money to your kids, spend it, set up a family trust etc. In my case Iâll retire elsewhere. There will always be a way. If you are the government and are focusing on this tax and it doesnât work⊠you are in trouble.
Not sure if you have kids, but my objective is to set up my kids as best as possible. What ever I have left when i go, I want it to go to them. Iâm not going to let the government say that theyâre taking 50%, given all the taxes I have paid over the years. They have had enough from me.
I never understood the argument that itâs unfair to have multiple taxation on the âsame moneyâ, because that already happens! If you spend the money you have VAT, and if you invest it you likely have capital gains
Then get rid of income tax. Iâm not a no tax person, but you did ask why its a stupid tax. And i think its stupid when its pilled on top of taxes that are already pay. I wouldnât necessarily mind VAT, though id suggest its actually detrimental to low income people and not a benefit in any way. But most of my money is gone by the time i get to actually use it. Whats the point if we just get taxed on top of taxes on everything?
Because it happens doesnât make it fair, they are two different things.
UK had a top tax rate of 83% in the 70s and 99% during WWII. The fact that this happened doesnât make them fair either.
I think the position is⊠if you earn money you have tax, then if you invest whatâs left over you have more tax, if you spend whatâs leftover you have more tax and then when you die you have more tax. Depending on what you earn, the taxman tends to earn more than you do from your hard work.
Iâve not calculated exact numbers but its looking like im getting taxed (in total including all taxes) possibly just over 50%, so they are literally making more money than i am from my work effort.
So youâd rather have a system where you scrap VAT etc and are only taxed on income? But then to raise a similar amount the income tax rate would have to go way up from where it is now to cover the removal of other taxes. So not sure why that would be any better?
I feel like this is fairly easily captured, gifts are already partially in scope of inheritance tax.
Thatâs fine, retirees are a big net drain if they chose to move elsewhere to avoid an inheritance tax thatâs a big gain for the treasury. Unless they take their children with them itâs also easy to pick up if you tax receipt rather than distribution.
I think everyone wants that, but I think there should be some limits otherwise you get massive wealth concentration. After youâve paid for private schools, set them up with no student loans, plus a few ÂŁ100,000 below threashhold etc⊠then they are already given a big head start. Letâs be honest hopefully they arenât inheriting anything before they are adults anyway, so itâs not like its going to help them in early life.
Right, but assuming the same level of total taxation Iâd rather more came from inheritance than income / capital gains because itâs fairer
Sure but IHT planning 101 tells you about the 7 year scaled look back on gifts. You donât plan the day before you die, IFAs will be advising you potentially decades beforehand.
Thats a generalisation - poorer retirees are bigger users of healthcare etc. They typically have more complications later in life and do not pay taxes. These are partially subsidised by the wealthier that still contribute to the tax pool and have things like private health care and generally better health. Pensions are still paid regardless of where you live. So if the weathier leave and the poorer retirees remain, that is negative for the countries cash flows
Sure, they can keep changing the rules to suit, but at the moment IHT is not based on receipt. If its based on the receipt, then it opens up a bigger loophole. They canât have it both ways.
We already do. Do you know how much the Treasury made from IHT when the Duke of Westminster died? This is one of the more public ones. The system is flawed and is unlikely to be able to be fixed in a fair way. There is already a massive wealth concentration that is continued to be passed from generation to generation. This will not stop - all they are doing with an IHT is exacerbating this gap by taxing the middle class that cannot avoid it as effectively while letting the rich continue their merry games.
The problem is you canât remove income tax without having to massively raise VAT and VAT is more regressive than income tax so you donât want it to be the only way you raise income. However, VAT captures the spending or tourists, non-residents etc. so is fairer in some ways. It means people who use the national infrastructure but who are not taxpayers also help fund it.
Iâm not naive, I think there is plenty of waste in the public sector but then there is also plenty of waste in the private sector. Think about how much the average person wasted on unnecessary things each year for example.
That being said, I donât think the government budgets should be meaningfully reduced (maybe reallocated but not reduced). People are still, on average, quite poor. Inequality is high and health and social outcomes are poor even with this level of government intervention.
Retirees are a net drain according to the UK Treasury figures. There is some cross subsidisation but nowhere near enough.
Also, pensions paid overseas are often not indexed (ie fixed in value from the year the retiree moves overseas). This saves the government a small fortune each year.