The average working person will have to pay an income tax as long as their income exceeds £7000 (although this does vary depending on circumstances)^[1] The average wage in Britain is £23000^[2] therefore most people are liable for such a tax; namely those who have estates less than £1 million. If such people pay money into the public domain throughout their lives, why can their estate not be untouched after death? They owe nothing to the system. The money they have earned they have already paid a tax for and they saved over and beyond that. Up to £1 million, people should be able to keep the nuts that they have harvested for their children.

People, who earn substantially more money, pay a larger percentage of their high wages into the public fund pool. They advance a higher percentage of a higher amount. Why then should they be further penalised by an inheritance tax? These people will die, after paying more tax then most, and will then have to pay from their estate a tax that those who paid less tax throughout their lives do not have to pay!

1. ^ http://www.direct.gov.uk/en/Nl1/Newsroom/Budget2009/DG_172915
2. ^ http://news.bbc.co.uk/1/hi/7252504.stm

Our capitalist society relies on entrepreneurship. This means that we need a society with a good environment for entrepreneurs where they can sustain their businesses – the businesses that are value-adding to the society as a whole. Estate tax, particularly on smaller amounts like less than £1million, is something that effectively destroys family businesses. The family has to cover the taxes on the wealth that has been built up by the businessman which can mean that they have to downsize as a result. Simply the existence of the tax means that businesses and families have to hedge against the possibility of a death and the taxman knocking

Scientific studies show detrimental effects of inheritance taxes to entrepreneurial activity. Holtz-Eakin finds evidence that entrepreneurs would decrease business expansion if they would be subject to estate tax after death.^[1] A recent study shows that if inheritance taxes were eliminated, probability of hiring would increase by 8.6%, payrolls by 2.6% and investments by 3% in family businesses.^[2] This is very plausible indeed – when business owners are subject to tax, they will not expand their business so much, instead, they will put away some money so that they could be used in case of owner’s death to pay the estate tax.

1. ^ Holtz-Eakin, Douglas. “The Death Tax: Investments, Employment, and Entrepreneurs.” Tax Notes 84 No. 5 (August 2, 1999): 782-92.
2. ^ Douglas Holtz-Eakin, Changing Views of the Estate Tax, February 2009, http://www.nodeathtax.org/files/AFBF_Holtz_Eakin_2009.pdf

Worry about inheritance taxes, particularly in short term investment climates like out own in Britain, is unlikely to be nearly as high as worries about more immediate factors when deciding whether to invest and on other entrepreneurial activity.

One of the fundamental powers driving human behaviour is the care for relatives. Throughout life, individual tries to earn a fortune not only because he wants to have a shelter and some food, but also because there is a social circle of other people around him – a social circle that he cares about. Ultimately many people’s motivation is to leave something for their children to inherit. How else does one explain the popularity of dynastic kingship throughout most of human history? Most people believe that family is something that is of higher importance than anything else in their life. A person devotes time to his family, helps in various situations; finally, he wants them to inherit his wealth after death. In a way, a child is a continuity of one’s life and a person is happy to leave his property the children or other relatives.

Simply because the vast majority of people would like to do something does not mean that the government should not take its slice. The government taking some of the money does not prevent the majority of it going to the reletives of the deceased. It seems very unlikely that their being an inheritance tax would overide this "fundamental power driving human behaviour" so it is a sensible target for a tax. People will still want to leave money to their reletives even if the taxman is taking some. What is the alternative, give it to charity? This hardly satisfies the desire to pass something on to you children.

With the public finances in such turmoil, and budget cuts needing to be made, no one can be thinking logically by discussing the mere possibility of changing the tax system so as to reduce the amount it gathers! We need to cut public spending back by a third. It is absurd to be stating this at the same time as asserting that inheritance tax will be abolished for estates worth under 1 million. David Cameroon cannot be thinking logically about a coherent way forward for the country when he is proposing polar opposite policies.

The Tories are known for being a middle class party. Their policies traditionally support those who live wealthier lifestyles. However, facing the possibility of a hung Parliament, Cameroon is trying to win over a vast majority of working class voters who would traditionally vote for Labour. However, it times of such financial need, we the public should not be sucked in by the carrot on the stick. Instead we should see the policy for what it is; a true disaster which has not been thought through. Where else would we gain this funding from? The only possibility would be to raise the inheritance tax on those who do have estates worth more than one million. But raising taxes would lose votes, so no wonder why David Cameron is unwilling to answer this question.

The Tories made a huge promise to cut the inheritance tax for those who had estates worth less than £1million. This was a people pleaser. However, given the talks now of having to reduce public debt and cut public spending by one third, how can this promise b maintained. When in interview with the BBC, Mr Clarke, the shadow business Secretary, stated that the cuts proposed were mere aspirations and were unlikely due to the public spending situation^[1]. This sent the newspapers swirling. To limit damage the Tory leader, Mr David Cameron had to step in and reinforce the promise. However, this shows how the party themselves are doubting the achievability of the policy but are now too scared to go back on the promise they once made. However, they will not be so scared once they are in power to go back on this promise.

1. ^ http://www.telegraph.co.uk/news/newstopics/politics/conservative/5033670/Tories-will-postpone-flagship-inheritance-tax-plan-says-Ken-Clarke.html

There are always going to be some people who are just below a tax limit that is set. If the boundary was set at £500,000 would it be unfair that those with estates of £499,999 were not taxed? Yes. But the lime is entirely arbitrary and needs to be placed somewhere. £1million is a point where it sounds like only the very wealthy have it so it is psychologically good for the middle classes.

In these times, when we have a huge public debt, when we have huge levels of unemployment, when people fear the security of their jobs; why should we allow 3000 people to have a tax break? These people would be the people who are the children of those who have estates that are just under the proposed £1million threshold for the inheritance tax. It is the opposite to the Robin Hood effect; the poor paying for the reasonably wealthy to prosper.

1. ^ http://www.guardian.co.uk/politics/2009/mar/24/conservatives-inheritance-tax

People are living longer so most of the time the wealth of your parents and expectation to eventually inherit something is not going to make much difference to someone's motivation. Afterall is someone has a child when they are 30 and live to 80 that child is not going to inherit until they are 50. A nice early retirement perhaps but it would not make any difference to how that person lives for most of their lives.

If we allow our older generations to pass on wealth up to £1million pounds onto their children, what we are doing is cultivating a bad work ethic. Children will know that they are due to inherent a vast amount of money which will be untouched by taxes. Knowing that they will receive such a windfall would dampen these people’s aspirations to achieve their own wealth. They will become spoilt on the idea of inheriting so much. Not only will the idea of allowing 9 million families be untouched by inheritance tax ravage society, it will ravage the souls of our youth.

The current debt crisis should show us that saved money is no bad thing rather it is very good and necessary for the economy to save more. We have been spending too much and not saving enough.

People who will have less than £1 million estates will start saving all their money knowing that their children would not be taxed on it upon their death. However, saved money is never good for an economy. They money lies dormant in a bank account. There is not supply or demand created by this money and therefore no jobs created from the money and the GDP is not affected by this money. If instead we taxed all of this money and gave it to the Government (who are all to good at spending money) then this money would be doing something for our economy, helping us improve Britain and creating jobs for the future.