The TPA has just been told by a high-level source that George Osborne will commit the Conservatives to abolishing inheritance tax in his speech at the Party Conference on Monday. This is great news. The TPA has long argued that inheritance tax is unfair, unpopular and unecessary and so we warmly welcome its abolition.
The plans as put forward by the Economic Competitiveness policy group and the Tax Reform Commission do envisage inheritance tax being replaced by a short-term capital gains tax, which would taper to zero after ten years and from which the main family home would be exempt. This does mean that some assets held for less than ten years will still face a tax on death, but according to the Tax Reform Commission, far less revenue would be raised under this system than from inheritance tax.
This is good news indeed although, having said that, I seem to remember John Major talking about doing the same thing, and that never happened, eh?
The reason that many otherwise sensible Lefties will squeal is because they see Inheritance tax as one of the few fair taxes, penalising, as it does, what they see only as luck. Actually, of course, if my father decides to save a load of his money, instead of squandering the lot, in order to pass it onto my and my siblings this is the precise opposite of luck: it is planning.
Now, you might say that, from my point of view, that it is merely luck and I will reply, "yeah. And. So. What? What a pity that your parents didn't do the same." The only thing that motivates such people is jealousy.
The fairest tax is, actually, a tax on work, since we all have to do it. In this way, everyone bears a proporational cost of maintaining the state: everyone, if you like, pays their bit towards society. Taxing inheritance is quite simply taxing those who have made sensible and far-sighted decisions rather than fecklessly wasting their money on precisely piss-all.
Bring on the tax cuts!
Except, of course, that the Tories have generally decided that any tax cuts will be revenue-neutral (at least for the moment) so don't get blinded by this piece of good news and remember to watch for Osborne's announcement of tax rises—or extra taxes (probably based on the AGW fantasy)—at the Conservative Conference.