Is it right to increase the threshold for death duty taxes to £1,000,000?

Question

Should death duties not be 100%. Dead people don't need money.

Answer 1

NO! Individual accumulating large amount of wealth probably received it as profits from a business that was energized by employees, and consumers who bought the product/service. Also, that wealth could have been from stock investments and trading. Stock prices and dividends result from employees who produce products/services, and customers who paid for them. Upon demise, such wealth should revert to state and federal treasuries for betterment of citizens and reduction of taxes. Heirs did not earn that wealth. They should be smart and strong enough to earn their own.

Answer 2

It's a broad-brush approach which will take a fair few potential voters out of inheritance tax for a reasonably low cost to the Treasury. But it doesn't really address the problem.

I have no problem with the concept of inheritance tax. After all, if the deceased had spent the money in their lifetime it would have generated various taxes, such as VAT or income tax for the person earning it. It encourages the free circulation of wealth.

The problem is that the main residence is now valued so high that poorer people are being brought into the net. I am in the ludicrous state of receiving Working Tax Credit because I am below the official poverty line yet would have a liability to inheritance tax if I died tomorrow.

The best solution would probably be to provide some relief for the main residence so that, say, only a percentage of the value is included in the estate. But I can see terrible problems in drawing up the legislation to do this.

Answer 3

i hear your complaints. but to set the record straight. the numbers quoted for the Kennedy administration were for total government revenue, not income taxes. so part of the increase to $153 B was the revenue collected for that new fangled thing just started called Medicare in 1965. So tax rates for most working people went up and not down. Secondly the tax cuts did not go into effect until 1965, after Kennedy's death. What Kennedy did during his first term was to change fiscal policy from a surplus budget in 1960 to deficit spending for 4 years. That is what stimulated growth in the economy that paid for revenue increasing. A fact that Republicans always forget to mention, the Kennedy boost was not a supply side tax cut, but rather a demand side Keynesian spending push. That is why Kennedy was successful where Reagan and Bush both failed. Reagan said tax cuts would pay for themselves. His first term tax cut led to federal revenue falling in 1983, which is not an increase but a decrease. This forced Reagan to enact what economist feel was the largest peace time tax increase in history, not by changing rates, but by rewriting the tax code. a clever slight of hand but yes it saved the country from certain financial ruin. Bush also had the same philosophy and his first term tax cuts caused federal revenue to drop three years in a row! Or as Cheney once said, the Bush tax cuts contributed to creating about half the national debt. (The wars were the other half). So higher tax rates are directly correlated to better economic results. The Republicans say Democrats want to tax and spend. Well if you cover your spending with taxes, then that is financial responsibility and how Clinton ended the deficit. The Republicans lower taxes while increasing spending. Who pays for the spending? some sucker down the road, which is financial irresponsibility. As a side light, Republicans say lower taxes is the ticket to smaller government. Fact, Reagan had more federal employees on the payroll than Obama. A lot more.

Answer 4

This is a stupid question. The issue with death taxes is that a lot of people have inherited houses that in the current economic climate are worth large sums of money - The people than get taxed on the value of the inheritance even if their own incomes doesn't reflect the huge tax bill they face - Thus, many people are forced to sell their ancestral homes just to pay the tax bill. It's unjust.

Answer 5

But why should the government get it and not the persons family? Surely if you worked all your life you would want to leave something behind for your family?

As for potentially increasing it I think it would be the right thing to do, lots of people who don't actually earn a lot of money are having to pay it simply because house values have skyrocketed. I question why the thing exists at all, if you work and pay taxes all your life why should the government have anymore claim to your money?? Personally I think it's ridiculous...

Answer 6

Yes. I have just had to give all of my Mum's savings to the goverment in the form of inheritance tax after she recently died. It broke my heart as she was really struggling financially when she was alive and she was trying to save so that my brother and I would have some money when she left us. I would rather my Mum was still here rather than have the money.

Answer 7

It seems as though the rich are getting richer and the poor poorer!
The at present is more like Victorian England, people seem to be waiting around for their parents to die!!!!

We need a revolution

Answer 8

yes,in fact death duty should be scrapped,we pay over the top taxes when we are alive,why should we pay the Gov when we die,it's unfair on the families left to sort it out

Answer 9

I plan to die potless. I want you, the taxpayer, to pay for my exit. See you on the other side. I'll pay you back then.

Answer 10

maybe not but if they've had to pay 40% tax on everything they have made why shud they have to pay when they die?