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I haven't been round these parts for a bit, but this one has me scratching my head.
We used to have a thread on Inheritance Tax, and it seemed that the tory position was that, if you'd worked hard all of your life, you should be able to pass that on to your kids (or the cats' home, or whatever).
The whole thing appears out of whack with most other things we all appear to agree on. We all seem to think that the state should provide a safety net if you're suddenly made unemployed (through no fault of your own), or suddenly become ill (through no fault of your own), or become too old to work (through no fault of your own...apart from not living on lard), and that this is paid for from our taxes, a system where you pay more tax the more you earn. I mean that's how the state appears to work for most things, most of the time. And whilst no one likes taxes, we seem to agree this is largely a fair system.
No one here knows whether they're going to get dementia, or some other debilitating disease. It might come to us and it might not. And if it does, we may have a child, or 2 , or 3, or 4 to share the burden. Or none, or they've all moved to Australia. Or we're still close to them, or have fallen out with us.
For these reasons, I don't think you can rely on family to look after the elderly. I mean they can do so, and may well want to, but I can't see any fair system where the state expects and/or counts on them doing so.
So the state must pay. And the fairest way to collect the extra cash (the way we collect it for most other things) is some sort of taxation. And this manifesto idea suggests the best 'new' tax is to take money from what people leave in their estate.
So the answer seems fairly obvious. See how much the state will have to pay for this care every year. See how much people leave in their estates every year. Divide one into the other, and set an inheritance tax at that level.
Now obviously, you can tweak that. Some sort of tax allowance, so the first £100,000 or whatever is tax free. Maybe make it progressive, so it's (just as an example) 20% from £100,000 to £400,000, 30% on £400,000 to £1,000,000, and 50% over that. I'm not saying those are the rates we should set, just offering an example.
Why isn't this just obvious?
My dad is getting older, and no one lives forever. He might slip away suddenly after a short illness, or require years (decades?) of expensive care. My brothers still live close enough to help, but I don't.
I wouldn't want to see his entire estate disappear in tax (even if you minus off the first £100,00). I can see no fair way of the family looking after him, given our different circumstances. And I also understand the money would have to come from somewhere.
Paying 20% or 30% on the estate or whatever seems a much fairer system than me relying on my brothers, or playing some sort of roulette where the family risks losing nothing from his estate or everything, or something in between.
That aside, there's an issue with this manifesto idea that's perhaps been missed. I've had a look at costs, and it seems that, whilst there's a huge variation, you can look at maybe £40,000 a year. And whilst some may only live with this sort of care for a year (or less), and others may live for maybe 10 years (or longer) you can maybe average it out at 5 years. So that's £200,000.
So if your estate is £100,000 you lose nothing. If your estate is anything between £100,000 and £300,000 you lose everything (other than that £100,000). But if you're estate is anything over £300,000 you get to keep the first £100,000 plus every penny over £300,000.
So it's a system that protects the less well off at the bottom, protects the well off at the top, but penalises those in the middle. Do we have any other taxes like that?
Is this why Labour have caught up a little in the polls? Rule 1 of elections in the UK is 'protect middle England'. This looks like targeting Mondeo Man. |
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Author: The Dark Horse
26-11-2019 03:24:52