Tony Benn RIP

notsoblue · March 2014

bompington wrote:

No, it's not the argument of a simpleton. We hear an awful lot about fairness, people earning too much money, and redistribution - it's entirely reasonable to point it out if those who espouse such arguments have their wealth pointed out.

Its not really about people earning too much money, or necessarily about redistribution. Fairness in this context is about government policy not being skewed too far in favour of a particular (share holding) demographic at the expense of the majority of the country. Most of the topical societal problems we're facing at the moment in the UK are related to the erosion of the working class jobs that pay a living wage. There are too many people in full employment that rely on benefits to make ends meet. In paying out housing benefit, and tax credits to people who are working, the government is effectively topping up their salaries, subsidising the payroll of employers that can more than afford to do this themselves. If the result of this subsidy is large scale accumulation of personal debt, job insecurity and hopelessness, then whats the point? Shareholder dividends?

This isn't fair to employees or to taxpayers. I don't really care if some people have more money and others less. But what I do care about is that the country is run in a way that is fair to all social strata, and that one doesn't use the system to financially exploit others.

Ben6899 · March 2014

arran77 wrote:

Inheritance tax is far from fair, you pay taxes all your working life and then your wealth gets taxed again when you die, sounds all very capitalist to me, very far from socialist IMO, therefore I can see why Benn would try to avoid it.

I know that there is a threshold below which inheritance tax is not payed but even for a wealthy socialist it must be a bitter pill to swallow

This.

secretsam · March 2014

Ballysmate wrote:

notsoblue wrote:

TheStone wrote:

Will be interested to see how much inheritance tax his kids pay.
Watch what they do, not what they say. All of them.

Vulgar.

Vulgar? Perhaps.
Always amusing when the value of the estates of dyed in the wool commies are revealed.
Ralph Milliband ?

If Benn was a Commie, does that make Thatcher a Nazi?

ballysmate · March 2014

SecretSam wrote:

Ballysmate wrote:

notsoblue wrote:

TheStone wrote:

Will be interested to see how much inheritance tax his kids pay.
Watch what they do, not what they say. All of them.

Vulgar.

Vulgar? Perhaps.
Always amusing when the value of the estates of dyed in the wool commies are revealed.
Ralph Milliband ?

If Benn was a Commie, does that make Thatcher a Nazi?

I referenced Milliband who was a Marxist. He left an estate worth several million pounds which was tied up in trusts so as to avoid inheritance tax.
He was either a hypocrite or he finally realised that he had been wrong all those years.
No idea what estate Benn leaves behind.

jamesco · March 2014

arran77 wrote:

Inheritance tax is far from fair, you pay taxes all your working life and then your wealth gets taxed again when you die, sounds all very capitalist to me, very far from socialist IMO, therefore I can see why Benn would try to avoid it.

I know that there is a threshold below which inheritance tax is not payed but even for a wealthy socialist it must be a bitter pill to swallow

Inheritance tax is the fairest tax! You're dead, so you're not paying it: your estate is, and that's never been taxed before.

The estates that it applies to are the rich ones; talk of people losing the 'family farm' is rubbish. With trusts etc. the leftover that actually does get taxed is merely what couldn't be got rid of earlier.

Anyone that talks about equality of opportunity but rails against inheritance tax is being hypocritical...

arran77 · March 2014

jamesco wrote:

arran77 wrote:

Inheritance tax is far from fair, you pay taxes all your working life and then your wealth gets taxed again when you die, sounds all very capitalist to me, very far from socialist IMO, therefore I can see why Benn would try to avoid it.

I know that there is a threshold below which inheritance tax is not payed but even for a wealthy socialist it must be a bitter pill to swallow

Inheritance tax is the fairest tax! You're dead, so you're not paying it: your estate is, and that's never been taxed before.

The estates that it applies to are the rich ones; talk of people losing the 'family farm' is rubbish. With trusts etc. the leftover that actually does get taxed is merely what couldn't be got rid of earlier.

Anyone that talks about equality of opportunity but rails against inheritance tax is being hypocritical...

That's the rubbish part

I believe the limit that it begins to apply at is £325,000, hardly rich in this day and age I'm afraid :roll:

jamesco · March 2014

arran77 wrote:

That's the rubbish part I believe the limit that it begins to apply at is £325,000, hardly rich in this day and age I'm afraid

The threshold is £325k - it's only the amount over that which is taxed. According to HMRC:

Most estates don't have to pay Inheritance Tax because they're valued at less than the threshold (£325,000 in 2013-14). The tax is payable at 40 per cent on the amount over this threshold or 36 per cent if the estate qualifies for a reduced rate as a result of a charitable donation.

arran77 · March 2014

jamesco wrote:

arran77 wrote:

That's the rubbish part I believe the limit that it begins to apply at is £325,000, hardly rich in this day and age I'm afraid

The threshold is £325k - it's only the amount over that which is taxed. According to HMRC:

Most estates don't have to pay Inheritance Tax because they're valued at less than the threshold (£325,000 in 2013-14). The tax is payable at 40 per cent on the amount over this threshold or 36 per cent if the estate qualifies for a reduced rate as a result of a charitable donation.

Exactly and £325k is not a lot in the south is it

UndercoverElephant · March 2014

arran77 wrote:

jamesco wrote:

arran77 wrote:

That's the rubbish part I believe the limit that it begins to apply at is £325,000, hardly rich in this day and age I'm afraid

The threshold is £325k - it's only the amount over that which is taxed. According to HMRC:

Most estates don't have to pay Inheritance Tax because they're valued at less than the threshold (£325,000 in 2013-14). The tax is payable at 40 per cent on the amount over this threshold or 36 per cent if the estate qualifies for a reduced rate as a result of a charitable donation.

Exactly and £325k is not a lot in the south is it

Well no, barely a shoebox to live in.

jamesco · March 2014

arran77 wrote:

Exactly and £325k is not a lot in the south is it

Nope, it's not much for a house, but inflated house prices are a separate (but related) issue. It's not like a widow will be thrown out of the family home to pay inheritance tax; as Moneysupermarket says:

When you die, any assets left to your spouse or registered civil partner, provided they’re UK-domiciled, are exempt from inheritance tax. On top of this, your partner’s inheritance tax allowance is increased by the amount you didn’t leave to others, meaning together a couple can currently leave £650,000 tax-free.

As for the kids; it's not like anyone can choose their parents, so why should children of rich parents benefit from their parents' deaths? £650k may not be a big house, it's almost enough for 4 average UK houses.

veronese68 · March 2014

arran77 wrote:

jamesco wrote:

arran77 wrote:

That's the rubbish part I believe the limit that it begins to apply at is £325,000, hardly rich in this day and age I'm afraid

The threshold is £325k - it's only the amount over that which is taxed. According to HMRC:

Most estates don't have to pay Inheritance Tax because they're valued at less than the threshold (£325,000 in 2013-14). The tax is payable at 40 per cent on the amount over this threshold or 36 per cent if the estate qualifies for a reduced rate as a result of a charitable donation.

Exactly and £325k is not a lot in the south is it

Strewth! Even our little house would be over that threshold, and that's taking into account paying the mortgage off.

greg66_tri_v2.0 · March 2014

jamesco wrote:

As for the kids; it's not like anyone can choose their parents, so why should children of rich parents benefit from their parents' deaths?

Because your question is based on the socialist precept that property is theft; that money and assets should the the State's, for the State to distribute.

Your statement works just as well from the socialist point of view if the word "rich" is deleted from it.

But doesn't accord with the concepts of property that we have.

jamesco · March 2014

Greg66 Tri v2.0 wrote:

Because your question is based on the socialist precept that property is theft; that money and assets should the the State's, for the State to distribute.

Property isn't theft, but property is only what society allows each person to have; the bottom line is that without rules, a person can claim only what they can personally and physically defend - it's society that enables us to keep more than this, which has the quid pro quo of playing by the rules society sets.

But rather than debate that, how about answering this: what merit is there in being born into a rich family and what reward does that deserve?

Money has a gravity of its own; unless you're happy to have an aristocracy owning everything, then there needs to be redistribution.

Veronese68 wrote:

Strewth! Even our little house would be over that threshold, and that's taking into account paying the mortgage off.

Sure, but as a couple your threshold is £650k. Even if your combined estates reached £1m, the inheritance tax would be - at the most - £140k, leaving £860 for the sprogs to give you a good send off

UndercoverElephant · March 2014

Greg66 Tri v2.0 wrote:

Because your question is based on the socialist precept that property is theft.

Socialist, anarchist, I mean, what's the difference, really? They're all lefties.

greg66_tri_v2.0 · March 2014

jamesco wrote:

Property isn't theft, but property is only what society allows each person to have; the bottom line is that without rules, a person can claim only what they can personally and physically defend - it's society that enables us to keep more than this, which has the quid pro quo of playing by the rules society sets.

It's actually "the law" instead of "society". And the law that sets IHT thresholds and reliefs is set by political policy; always has been: eg a 100% IHT charge with no exemptions or reliefs is simply a political tool; no less than a 0% IHT charge.

jamesco wrote:

But rather than debate that, how about answering this: what merit is there in being born into a rich family and what reward does that deserve?

Your focus is fundamentally out in asking that question. You focus on the children/legatees of a wealthy deceased. IHT is a tax on the deceased's estate though, not the children. It taxes what is necessarily (leaving illegal gains to one side) monies and assets that are the accumulation of taxed income. The deceased is entitled to leave that to whomever he wishes: if he leaves it to BP, or Shell, or the Communist Party, his estate is subject to IHT and those beneficiaries lose out to the same extent that his son/daughter would.

Asking what merit there is in being born into a rich family is about as meaningless in asking what merit there is in Shell being the preferred legatee of a rich person. The legatee doesn't have to show "merit", or that he/she/it "deserves" the legacy - those are all the wrong question. The right question is whether the deceased should be entitled to leave all of his estate to the persons/entities of his choice without the State taking a chunk of said estate.

jamesco wrote:

Money has a gravity of its own; unless you're happy to have an aristocracy owning everything, then there needs to be redistribution.

There is a redistribution from the "aristocracy" via commerce and employment. Money gravitates towards those who are successful in business. The redistribution that I suspect you're talking about is not driven by such gravity; on the contrary, it is one that works against such gravity.

notsoblue · March 2014

Greg66 Tri v2.0 wrote:

There is a redistribution from the "aristocracy" via commerce and employment. Money gravitates towards those who are successful in business. The redistribution that I suspect you're talking about is not driven by such gravity; on the contrary, it is one that works against such gravity.

What about people who aren't successful in business? Shouldn't they be able to make a living without being in some way dependent on the state? I don't think redistribution is all about IHT.

jamesco · March 2014

Greg66 Tri v2.0 wrote:

It's actually "the law" instead of "society". And the law that sets IHT thresholds and reliefs is set by political policy; always has been: eg a 100% IHT charge with no exemptions or reliefs is simply a political tool; no less than a 0% IHT charge.

Laws are written by governments. Governments come from the will of the people. As a great man once said, "government of the people, by the people, for the people".

Greg66 Tri v2.0 wrote:

IHT is a tax on the deceased's estate though, not the children.

Hey, we agree on this!

Greg66 Tri v2.0 wrote:

The deceased is entitled to leave that to whomever he wishes: if he leaves it to BP, or Shell, or the Communist Party, his estate is subject to IHT and those beneficiaries lose out to the same extent that his son/daughter would.

This isn't actually the case - wills are subject to appeals (I know, I've done it successfully).

Greg66 Tri v2.0 wrote:

Asking what merit there is in being born into a rich family is about as meaningless in asking what merit there is in Shell being the preferred legatee of a rich person. The legatee doesn't have to show "merit", or that he/she/it "deserves" the legacy - those are all the wrong question.

So, if they don't have to show that they deserve it, what is the basis of their claim on it? Accident of birth? Dependent children are one thing, but shouldn't adults be able to stand on their own two feet, to succeed or fail based on their merits? Sorry, got caught up in your Ayn Rand moment

Greg66 Tri v2.0 wrote:

The right question is whether the deceased should be entitled to leave all of his estate to the persons/entities of his choice without the State taking a chunk of said estate.

Why is this the right question? Remember, the deceased is dead and their estate no longer affects them. Do you think the dead get angry?

Greg66 Tri v2.0 wrote:

There is a redistribution from the "aristocracy" via commerce and employment. Money gravitates towards those who are successful in business. The redistribution that I suspect you're talking about is not driven by such gravity; on the contrary, it is one that works against such gravity.

Trickle-down economics? Dude, for real?

greg66_tri_v2.0 · March 2014

notsoblue wrote:

Greg66 Tri v2.0 wrote:

There is a redistribution from the "aristocracy" via commerce and employment. Money gravitates towards those who are successful in business. The redistribution that I suspect you're talking about is not driven by such gravity; on the contrary, it is one that works against such gravity.

What about people who aren't successful in business? Shouldn't they be able to make a living without being in some way dependent on the state? I don't think redistribution is all about IHT.

The point that was being made, I think, was that IHT was a necessary tool to dismantle embedded wealth amongst the aristocracy.

I have to say, I find that a somewhat specious argument, as (a) speaking of the aristocracy as the repository of real wealth is about 200 years out of date; and (b) the aristocracy - such as it is - nowadays actually manages to use family trusts to escape the worst of IHT pretty well.

Your point is, as I understand it, a much broader one borrowed from the Bob Crow thread, viz: people who are employed ought to be able to earn enough to be self sufficient. This is, in substance, a minimum wage argument, which is somewhat off (this) topic.

I think this is a rather tricky issue. In any developed city you will have a need for unpleasant jobs to be done. Those jobs, by their nature, are not going to be well paid. If you allow the market to set the going rate of pay, you will likely end up filling those jobs with those who are the most desperate for work, and who have the lowest possible outgoings. It may be that you then find it's a case of "pay peanuts, get monkeys", and in fact you need to pay more to get people who are both willing and able to do the job. One way or another, a pure market driven approach will arrive at a going rate for people willing and able to do the job; and necessarily these employees can cover their outgoings from their income.

But what then are you do about the person or family that wants to (or perhaps has to) live in the city, but can't get jobs that pay enough to enable them to do so? On the one hand, you pay them over the market rate - minimum (or more accurately supplemented) pay rates. On the other, you let them face the hard truth and leave them to migrate domestically to a cheaper part of the country.

From a dispassionate hard economics point of view, once you start bumping up pay to levels over the market rate, you generate problems: the distortions in pay then ripple up the employment chain; your city becomes one in which pay rates are over the market rate; this draws economic migrants to the city which should - but won't - on this hypothesis increase choice for employers and thus reduce pay rates.

I find myself genuinely torn on this, because on the one hand, the hard hearted dispassionatist in me says "don't distort the market"; whereas on the other hand I recognise the consequences of that approach in terms of hardship, upheaval, non-consensual movement, and general misery for the people in question, none of which are attractive consequences.

(This all ignores the other end of the scale - the person who is successful, and whose wealth is being redistributed. It's easy to look at a successful business and say: the people at the top should earn less and the people at the bottom should earn more. But in many cases those at the top will have risked a lot to start the business, will have worked hard to nurse it through the early years, and generally have the drive/ambition/vision that are not common in society. Once you expropriate part of what they aimed for on day one, you discourage other people like that from taking risks, and your actions tend to stultify economic growth.)

greg66_tri_v2.0 · March 2014

jamesco wrote:

Greg66 Tri v2.0 wrote:

It's actually "the law" instead of "society". And the law that sets IHT thresholds and reliefs is set by political policy; always has been: eg a 100% IHT charge with no exemptions or reliefs is simply a political tool; no less than a 0% IHT charge.

Laws are written by governments. Governments come from the will of the people. As a great man once said, "government of the people, by the people, for the people".

That's a nice soundbite, but the reality is that no political party is elected because the people back every one of their policies. GE results are a compromise reflecting hat most people's preferences for most of a party's agenda.

jamesco wrote:

Greg66 Tri v2.0 wrote:

The deceased is entitled to leave that to whomever he wishes: if he leaves it to BP, or Shell, or the Communist Party, his estate is subject to IHT and those beneficiaries lose out to the same extent that his son/daughter would.

This isn't actually the case - wills are subject to appeals (I know, I've done it successfully).

Bit of a non sequitur there, and misleading too: a will may be challenged on the basis of the testator's capacity (but that is outside the premise of leaving an estate to whomever he chooses) or under statute in favour of dependants who are not provided for. Ironically, many IA claims are brought by those pesky beneficiaries: children of the deceased.

jamesco wrote:

Greg66 Tri v2.0 wrote:

Asking what merit there is in being born into a rich family is about as meaningless in asking what merit there is in Shell being the preferred legatee of a rich person. The legatee doesn't have to show "merit", or that he/she/it "deserves" the legacy - those are all the wrong question.

So, if they don't have to show that they deserve it, what is the basis of their claim on it? Accident of birth? Dependent children are one thing, but shouldn't adults be able to stand on their own two feet, to succeed or fail based on their merits? Sorry, got caught up in your Ayn Rand moment

Again, there is no need to justify "the basis of the claim". If I give you £20, you don't have to justify receipt of that £20 to me or anyone else. If I choose to give it to the person standing behind you, neither he nor I have to justify the gift to anyone.

Also, suggesting that children who inherit would not be able to stand on their own two feet without the inheritance is a nice try, but simply doesn't follow.

jamesco wrote:

Greg66 Tri v2.0 wrote:

The right question is whether the deceased should be entitled to leave all of his estate to the persons/entities of his choice without the State taking a chunk of said estate.

Why is this the right question? Remember, the deceased is dead and their estate no longer affects them. Do you think the dead get angry?

It has nothing to do with emotion - I doubt you think that a living person's anger at paying their tax bill is good reason to reduce tax rates. The question focusses on the State's justification for taxing estates, which is what this is about.

jamesco wrote:

Greg66 Tri v2.0 wrote:

There is a redistribution from the "aristocracy" via commerce and employment. Money gravitates towards those who are successful in business. The redistribution that I suspect you're talking about is not driven by such gravity; on the contrary, it is one that works against such gravity.

Trickle-down economics? Dude, for real?

Yes, for real. You raised the concept of money having its own gravity, but the unavoidable truth is that money gravitates towards the commercially successful, even if there is a good moral case that it ought to gravitate somewhere else.

arran77 · March 2014

jamesco wrote:

Veronese68 wrote:

Strewth! Even our little house would be over that threshold, and that's taking into account paying the mortgage off.

Sure, but as a couple your threshold is £650k. Even if your combined estates reached £1m, the inheritance tax would be - at the most - £140k, leaving £860 for the sprogs to give you a good send off

Exactly my point Veronese, £325k really is not a big amount and in all likeliness one of you will probably shuffle first so I reckon those who fall into the £650k limit are minimal

veronese68 · March 2014

arran77 wrote:

jamesco wrote:

Veronese68 wrote:

Strewth! Even our little house would be over that threshold, and that's taking into account paying the mortgage off.

Sure, but as a couple your threshold is £650k. Even if your combined estates reached £1m, the inheritance tax would be - at the most - £140k, leaving £860 for the sprogs to give you a good send off

Exactly my point Veronese, £325k really is not a big amount and in all likeliness one of you will probably shuffle first so I reckon those who fall into the £650k limit are minimal

Hopefully we won't find out for a good few years yet, by which time who knows what property prices will be like. Although I think the thresholld may change by then.

tailwindhome · March 2014

"We should give Tony Benn a state funeral - It would really have annoyed him"

Stevo_666 · March 2014

TailWindHome wrote:

"We should give Tony Benn a state funeral - It would really have annoyed him"

It's the least we can do to honour a man who helped keep Labour out of power for years

That deserves recognition.

confused@BR · March 2014

He was my hero and touchstone. Whenever I needed guidance on a topic of the day I referenced Tony. If he was for it I knew it had to be sh*te, Concorde, E U , anything else, Tony was 100% wrong.

The younger among us probably don't remember what an absolute a*sehole he was to his colleagues when in power. His famous diaries were an impressive exercise in backstabbing and not terribly strong on verity or simple honesty. He spent an enormous amount of time and effort in re-writing history to display himself in the most kindly of lights. It seems that you are allowed to do that if you outlive your contemporaries.

jamesco · March 2014

Greg66 Tri v2.0 wrote:

jamesco wrote:

Laws are written by governments. Governments come from the will of the people. As a great man once said, "government of the people, by the people, for the people".

That's a nice soundbite, but the reality is that no political party is elected because the people back every one of their policies. GE results are a compromise reflecting hat most people's preferences for most of a party's agenda.

You seem to be arguing that the law arrives from an immaculate conception, rather than being created by governments which are themselves elected by the public!

No government is elected if it is not popular enough (arguable under the current system - though as you've said before "I quite see that in a three party system one party could win all the seats available with 33.5% of the vote in each." and "I am quite happy with FPTP")

Greg66 Tri v2.0 wrote:

jamesco wrote:

Greg66 Tri v2.0 wrote:

The deceased is entitled to leave that to whomever he wishes: if he leaves it to BP, or Shell, or the Communist Party, his estate is subject to IHT and those beneficiaries lose out to the same extent that his son/daughter would.

This isn't actually the case - wills are subject to appeals (I know, I've done it successfully).

Bit of a non sequitur there, and misleading too: a will may be challenged on the basis of the testator's capacity (but that is outside the premise of leaving an estate to whomever he chooses) or under statute in favour of dependants who are not provided for. Ironically, many IA claims are brought by those pesky beneficiaries: children of the deceased.

Non sequitur means "it does not follow"; an example is "The deceased is entitled to leave that to whomever he wishes" followed by "a will may be challenged".

Greg66 Tri v2.0 wrote:

jamesco wrote:

Greg66 Tri v2.0 wrote:

Asking what merit there is in being born into a rich family is about as meaningless in asking what merit there is in Shell being the preferred legatee of a rich person. The legatee doesn't have to show "merit", or that he/she/it "deserves" the legacy - those are all the wrong question.

So, if they don't have to show that they deserve it, what is the basis of their claim on it? Accident of birth? Dependent children are one thing, but shouldn't adults be able to stand on their own two feet, to succeed or fail based on their merits? Sorry, got caught up in your Ayn Rand moment

Again, there is no need to justify "the basis of the claim". If I give you £20, you don't have to justify receipt of that £20 to me or anyone else. If I choose to give it to the person standing behind you, neither he nor I have to justify the gift to anyone.

Also, suggesting that children who inherit would not be able to stand on their own two feet without the inheritance is a nice try, but simply doesn't follow.

Bit of a straw-man - you can indeed give me £20, no problems, as long as it doesn't take you over your annual £3,000 threshold. However, if you want to give me ten million pounds, we'd both agree that that's a different story, right?

Greg66 Tri v2.0 wrote:

jamesco wrote:

Greg66 Tri v2.0 wrote:

The right question is whether the deceased should be entitled to leave all of his estate to the persons/entities of his choice without the State taking a chunk of said estate.

Why is this the right question? Remember, the deceased is dead and their estate no longer affects them. Do you think the dead get angry?

It has nothing to do with emotion - I doubt you think that a living person's anger at paying their tax bill is good reason to reduce tax rates. The question focusses on the State's justification for taxing estates, which is what this is about.

There are two major reasons: to raise funds for services and to ameliorate the concentration of wealth.

It's hard to argue against either of these - the first because government provided services - e.g. the NHS - have to be funded and are immensely popular and the second because wealth-concentration leads to massive inefficiencies, waste and insoluble social problems.

The richest family in the world is the Walton family, worth a collective $150 billion. Every single one of them inherited the wealth from the founders of Wal Mart; tell me, what do you think this small group of people have done that merits them getting $150 billion?

Greg66 Tri v2.0 wrote:

jamesco wrote:

Greg66 Tri v2.0 wrote:

There is a redistribution from the "aristocracy" via commerce and employment. Money gravitates towards those who are successful in business. The redistribution that I suspect you're talking about is not driven by such gravity; on the contrary, it is one that works against such gravity.

Trickle-down economics? Dude, for real?

Yes, for real. You raised the concept of money having its own gravity, but the unavoidable truth is that money gravitates towards the commercially successful, even if there is a good moral case that it ought to gravitate somewhere else.

The money from a rich estate gravitates toward the children of the deceased because their parents happened to be their parents, not because the children are "commercially successful"!

If you genuinely believe trickle-down economics works, I'd be interested to see your (credible) evidence supporting it, as it's been widely discredited. Keep in mind, too, that a great many of your "commercially successful" are rentiers who are not productive themselves but impose tolls on those who are.

Enough of this, it's a sunny day, time to go for a run

Tony Benn RIP

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