inheritance tax and richard madeley

I was reading the Fabian Society's pamphlet on How to Defend Inheritance Tax - a surprisingly good and inspiring read - and it reminded me / made clear why it is we didn't have a general election last year, and what insiduous power the populist right wing has.

Ok - starting point.  Inheritance Tax is a justifiable, redistributive tax.   

Inherited wealth provides better life chances for those that inherit than those who do not, so it undermines equality of opportunity.

If the government must raise revenue through taxation, then surely it is even fairer to raise that from unearned inheritance than by taxing the earnings of work.

Why is this related to the lack of a general election last year? 

Late last summer, having been crowned PM in June, Gordon Brown had settled into No. 10,  was riding high in the opinion polls and was seriously considering a snap election in November that would secure a majority that would carry through to 2012 (Labour had a 6 - 11 point lead at the start of August).

But then George Osborne made an announcement on August 17 that the Tories would raise the inheritance tax threshold considerably.

 

Richard Madeley.  Source: whydidigowrong.co.uk. Permission granted for use.

This was a populist move, because it is seen as aspirational to want to have built up a wealthy enough estate to have to pay inheritance tax, and so to avoid it is seen as protecting accumulated wealth.  A public perception had built up - fuelled not just by the likes of the Daily Mail (Hurrah for the Blackshirts), which grotesquely refers to it as a 'death tax' but also by overt politicing on air (and of course in his column in the Daily Express) from Richard Madeley of Richard and Judy and shoplifting infamy - that this tax was in some way 'unfair'.

Only 44,000 estates (5.4%) paid any Inheritance Tax at all in 2007-08.

In response to the Tories' move, Labour were wrong-footed.  It took until Conference (nearly six weeks later) for Alastair Darling to announced that he was mimicking the Tories promises and raising the threshold, so playing right into their hands by agreeing that their ideas about managing the economy were right.

And during those six weeks - the credit crunch had begun.  The biggest one day drop in the FTSE for four years happened the day before Osborne's announcement, Northern Rock collapsed and, although we didn't realise it then, August was the peak of the property boom.  Prices have been dropping every month since.

By October, the parties were neck-and-neck in the polls, and the opportunity was lost.  To Tories gained momentum, and now the opposition are 2/5 on to win the next General Election.  We're all doomed.

Comments

[wodge]

Hi,

Thanks for visiting my blog.

You're welcome to use the pic.

wodge

[Dick Madeley]

I look damn good in that picture. And that was only two days of stubble growth.