The Student Room Group

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The_Bear will change his attitude when he stops living off his parents and the state.
Lawz-
No. you're using the extreme of one and comparing it to a moderate example of the other.

In both cases, most of time, effort has to be expended by the person to succeed.

Let;s take the example of private education:

one person goes to Eton, the other to his local inner city comp.

The first is of mediocre ability, the second very bright indeed. Both work a similar amount.

They both get similar grades, end up at a similar university, and have similar careers.

Many decry the unfairness of this as the first individual is "born" into his advantage, all the while seeing as perfectly acceptable that the second is "born" into an advantage also.


No. The first one, you say, is mediocre, and yet still gets the same outcome as the second. That means some other factor is responsible for the result. That other factor-presumably his Eton education- is what we would decry as unfair. Again, it isn't his own efforts that got him to be successful. It isn't true meritocracy that got him his success. Its his Eton education.

With this outcome, is the Eton boy still mediocre? Or has he utilised his private education to become more knowledgeable?

And anyway Lawz, we are talking about inheritance tax. You said that in most cases, effort has to be expended by a person to succeed. This is not the case with inheritance. You don't have to do anything to get your money.
Thud
you're not taking into account background. Whilst I agree, yes it's possible for a child who went to an inner city comp to attain the same level as someone from Eton, there are other factors such as motivation from parents, home life, family security, the possibility that perhaps parents can't afford to have the kid live at home and do 6th form etc etc.


That's his point, babe. The child has no control over any of those, either. One kid could have great parents who teach them manners and working skills, the other a pair of junkies. Both are freaks of birth accident, yet are "ok" - as long as it isn't cash.
The_Bear
Do you even go out?



That response, i expect to see in Humour Weekly by next week.

In answer, no. I am a hermit. I never leave my room. There is a hatch where food is passed through three times a day.
Reply 84
cottonmouth
No. The first one, you say, is mediocre, and yet still gets the same outcome as the second. That means some other factor is responsible for the result. That other factor-presumably his Eton education- is what we would decry as unfair. Again, it isn't his own efforts that got him to be successful. It isn't true meritocracy that got him his success. Its his Eton education.


Success is a relative term. His Effort clearly had something to do with the results - it was merely COMBINED with his education, just as the second person's effort produced results when COMBINED with his innate ability.

Look: in both cases, both parties can toil, and in both cases, the thing that gives them the edge, is a factor attributable to who their parents were.
City bound
That's a very poor argument for IHT in it's present incarnation. Equality of opportunity is barely influenced by inheritance when compared to what the inheritor receives from their parent whilst they're alive. If they go for a job they will receive a benefit from their education, their contacts and their soft skills. All of which are developed, usually, whilst the parent is alive. If they try to set up a business the same applies; aside, perhaps, from the cost of start up.

Even if an individual inherits enough so that they never have to work, so what? They still contribute to the economy through consuming what their parents couldn't and by providing investment through their savings. The only objection there could be is plain old jealousy.

Despite this already being a poor justification for IHT in theory, it get's worse in practice. The original target (and only vaguely conceivable justification) of IHT was the break-up of the aristocratic estates and "old order" in favour of meritocracy. In reality it is so poorly targeted that it hasn't done the former and hasn't promoted the latter. Through skillful (and unavoidably legal) use of investment/asset managers it is avoided by it's intended targets. Consequently, the only estates it breaks up are those of the middle classes. This has created a gulf separating the rich from the nouveau-riche/upper middle class; entrenching the position of the former as well as both discouraging and retarding the social mobility of everyone else.


Well we need further attack and more stringent rules when it comes to these loopholes then. Using the very rich and their dodging as an argument for the abolition of IHT isn't the correct apporach, in my mview. And while IHT as a mechanism may not in itself enhance equality of oppurtunity, it at least promotes it. That is what i see when i think of IHT. An attempt to promote equality of oppurtunity. Whether it actally does or not is another matter. But scrapping it altogether would seem to me an outright disregard for the principle of equality of oppurtunity. And we don't want that!
Lawz-
Success is a relative term. His Effort clearly had something to do with the results - it was merely COMBINED with his education, just as the second person's effort produced results when COMBINED with his innate ability.

Look: in both cases, both parties can toil, and in both cases, the thing that gives them the edge, is a factor attributable to who their parents were.


Indeed. The DIFFERENCE then, between the two parties, is that one helped materially by other people, and one isn't. We can't do anything about genetics. Indeed, we don't need to. When we call private education unfair, we simply mean that there, less effort has to be exerted by an individual to gain the same as someone who relied wholly upon themselves to get where they are. Yes, an intelligent person may use less effort to get somewhere than a non-intelligent person, but thats genetics for you, not materialism.

In any case, this is far too theoretical and philosophical. The real, practical effects are plain to see. Inheritance can be seen to be unfair, and a degenerating process from equality of oppurtunity. Gaining a load of money and property for doing nothing yourself, is different from working for years to afford it by yourself. It is indeed THIS latter aspect of obtaining money that people moan about inheritance tax for. "Why should my hard-earned cash go to the government. I worked for years, i saved for years, my effort got me this, etc etc". These moaners clearly see that earning things for yourself is a very important reason for why the governmen shouldn't be entitled to any of it.
Reply 87
cottonmouth
Well we need further attack and more stringent rules when it comes to these loopholes then. Using the very rich and their dodging as an argument for the abolition of IHT isn't the correct apporach, in my mview.


That's far far harder than you might think.

If the government could raise more revneue easily by closing off loopholes, it would. It doesnt for a reason.

And while IHT as a mechanism may not in itself enhance equality of oppurtunity, it at least promotes it.


But it simply doesnt. Its a low-middle to middle class tax.

But scrapping it altogether would seem to me an outright disregard for the principle of equality of oppurtunity. And we don't want that!


I dont see why it need be anything of the sort - you can promote equality through tax and spend (argue the level and type of expenditure etc) - but surely its best to tax in the most equitable and efficient manner rather than employing a blunt and inefficient tool in the name of a nod towards egalitarianism.
Reply 88
cottonmouth
Indeed. The DIFFERENCE then, between the two parties, is that one helped materially by other people, and one isn't. We can't do anything about genetics. Indeed, we don't need to. When we call private education unfair, we simply mean that there, less effort has to be exerted by an individual to gain the same as someone who relied wholly upon themselves to get where they are. Yes, an intelligent person may use less effort to get somewhere than a non-intelligent person, but thats genetics for you, not materialism.


A distinction without difference - whether it is unfair or not has nothing to do with whether you can do anything about it.

And you CAN do something to prevent it - it's called communism - the able and the incapable alike - everyone gets the same... accidents of birth simply dont feature in outcome... everyone engages in the "equal sharing of miseries"

In any case, this is far too theoretical and philosophical.


Perhaps. I simply think it interesting that one is seen as unfair, while the other is seen as cream rising to the top, and perfectly acceptable, if not desirable.

I dont comment on the veracity of the conclusions - just the contradiction of it.
Lawz-
That's far far harder than you might think.

If the government could raise more revneue easily by closing off loopholes, it would. It doesnt for a reason.



But it simply doesnt. Its a low-middle to middle class tax.



I dont see why it need be anything of the sort - you can promote equality through tax and spend (argue the level and type of expenditure etc) - but surely its best to tax in the most equitable and efficient manner rather than employing a blunt and inefficient tool in the name of a nod towards egalitarianism.


A low-to-middle-class tax simply because there are too many loopholes, which enable the rich to get away with flouting it. Saying "Its too hard to change it" doesn't cut it in m book. They must try harder.

Sure, this tax is apparantly insufficient. But they need to get toilinig to make it more efficient!
Reply 90
cottonmouth
A low-to-middle-class tax simply because there are too many loopholes, which enable the rich to get away with flouting it. Saying "Its too hard to change it" doesn't cut it in m book. They must try harder.


Fair enough - though I simply assure you - sometimes it isnt possible to do that. Loopholes dont only exist because of apathy or sloth - they exist because the way our tax system is deisigned, at its fundamental level, is imperfect, and the fact that other jurisdicitons exist.

As said, if the government had ready extra revenue there without "raising taxes", it would generally be quite happy to do so.

Sure, this tax is apparantly insufficient. But they need to get toilinig to make it more efficient!


Not being an expert on IHT, but going on what I DO know of the tax system, there are many problems in doing so. Remember, people can simply donate everything to a family trust 20 years before death - they can sell, they can emmigrate, they can do all sorts of things that get around it.
Lawz-
A distinction without difference - whether it is unfair or not has nothing to do with whether you can do anything about it.

And you CAN do something to prevent it - it's called communism - the able and the incapable alike - everyone gets the same... accidents of birth simply dont feature in outcome... everyone engages in the "equal sharing of miseries"



Perhaps. I simply think it interesting that one is seen as unfair, while the other is seen as cream rising to the top, and perfectly acceptable, if not desirable.

I dont comment on the veracity of the conclusions - just the contradiction of it.


One is seen as unfair because there is a distinction, which by definition makes a difference.

And no, i'm not advocating communism here. I can just see the unfairness in inheritance, but i accept it. The alternative, communism, is something i'll leave to Thud to argue. I'm hungry. Let me just ring the bell so someone can give me some food....
Lawz-
Fair enough - though I simply assure you - sometimes it isnt possible to do that. Loopholes dont only exist because of apathy or sloth - they exist because the way our tax system is deisigned, at its fundamental level, is imperfect, and the fact that other jurisdicitons exist.

As said, if the government had ready extra revenue there without "raising taxes", it would generally be quite happy to do so.



Not being an expert on IHT, but going on what I DO know of the tax system, there are many problems in doing so. Remember, people can simply donate everything to a family trust 20 years before death - they can sell, they can emmigrate, they can do all sorts of things that get around it.


Yeah, i know. I was thinking of doing tax law next year, but changed my mind. Talk of money would drive me insane.

But these people who abuse the loopholes deserve scorn, if you ask me. Greedy mother****ers
Reply 93
cottonmouth
Well we need further attack and more stringent rules when it comes to these loopholes then. Using the very rich and their dodging as an argument for the abolition of IHT isn't the correct apporach, in my mview. And while IHT as a mechanism may not in itself enhance equality of oppurtunity, it at least promotes it. That is what i see when i think of IHT. An attempt to promote equality of oppurtunity. Whether it actally does or not is another matter. But scrapping it altogether would seem to me an outright disregard for the principle of equality of oppurtunity. And we don't want that!


They're not "loopholes" they're simple financial products and methods that were created for reasons other that IHT but are consequently useful. It's impossible to prevent them from being used without creating a legislative and regulatory mess; one that would cost many times more than the benefits yielded.

Having it there as a gesture to equality of opportunity, whilst in practice it ******* it, is both pointless and ridiculous.
Reply 94
DanGrover
I literally cannot understand what it has to do with the government. How is it their business at all? I mean, the money has already been taxed at least once.


Actually, thats not true.

Consider the following scenario:

OAP buys 200k house, 10 years later house is worth 300k, OAP has not paid a penny of tax on that capital gain, hence pays inheritence tax on amounts over 280k(not actual figure).
x.narb.x
Actually, thats not true.

Consider the following scenario:

OAP buys 200k house, 10 years later house is worth 300k, OAP has not paid a penny of tax on that capital gain, hence pays inheritence tax on amounts over 280k(not actual figure).


Unless the OAP would have been reimbursed had the house fallen to 100k, that simply doesn't stand to reason.

Besides, the OAP hasn't gained anything by their house rising in value, have they? They'd only gain when they come to sell it - and THAT already does get taxed. So whatchu talking bout, Willis?
Reply 96
I also fail to see how IHT promotoes equality of opportunity. To start with I thought you meant the tax would be used in part to fund state education which would give kids a better head start, I can accept that although personally I feel the system is fine, the attitudes are wrong.

Now I'm thinking that you mean the rich people should be somehow handicapped? Like...preventing the hand down of wealth because it puts them in a better economic position. I'm not going to go too deep into my beliefs on this opinion because I don't want to give a Nazi mod some more ammo and I might be on the wrong track. Needless to say if you think that...then words cannot describe the lack of intelligence you have. I can hear your single functioning brain cell crying out for help.

A system is already in place to make the poor get more from their dead parent, i.e the nil rate band. Rich parents, being financially aware, will have already influenced the opportunity of their kids (unless they are a stingy bastard with no love in them). The way you were giving it all that I took it as read that you understood IHT? Things like the taper relief of inter vivos and PETs? These aren't loopholes known by the super rich, these are "loopholes" known by anyone with a brain. I'm sorry but if you pay tax blindly then you deserve to get raped for all you are worth. They aren't even loopholes, but regulations that have existed for hundreds of years.

These "rich kids" will have amounts stashed away in trusts, beneficiary pensions and any number of shares/properties the parent didn't want Dirty Gordon to get his hands on, they'll all have decreasing term assurances cracked on them in case of early death. More than likely they will be left with one property, the testators residence, which may be subject to IHT. Even then I would have a protection policy to cover it, why would I want my kids to pay anything? It's not like I need the money where I'm going.

Come on, what do you think old people do in their retirement apart from visit museums and try to **** the Chancellor?
Reply 97
x.narb.x
Actually, thats not true.

Consider the following scenario:

OAP buys 200k house, 10 years later house is worth 300k, OAP has not paid a penny of tax on that capital gain, hence pays inheritence tax on amounts over 280k(not actual figure).


DanGrover
Unless the OAP would have been reimbursed had the house fallen to 100k, that simply doesn't stand to reason.


Well the point is moot since if it was the OAPs main residence it would be exempt from CGT and if it wasn't then he could offset any losses in the future against any CGT profits over the annual exemption limit (which he would presumably have otherwise why is he buying a property that isnt his main residence?).
Reply 98
thegreatstupendo
Currently, inheritance tax stands at 40% on all the deceased's estate over £285,000. This allows people who have done no work, or anything else to deserve it, to profit purely because their parents had money.

How is it just that some people stand to gain a large windfall purely because of who they are, and who they were born to.

If inheritance tax was reformed, it would create a level playing field between people if all classes and backgrounds, making the UK a fairer, more equal society.

I propose that inheritance tax be increased to 100%, with the exception of one family house (up to a certain value, and that has been in the family for a certain number of years, as yet undecided).

As well as encouraging equality among the people of the UK, it would also allow the government to decrease otgher taxes, such as income tax, in order to encourage hard work among the population; preciesly the opposite of what inheritance tax is doing now.

Anyone agree?



WTF? That is to excessive. It should be 0-20%. The government has no right to take away money that people have inherited. Thanks to the greedy government the personal belongings of Princess Margaret had to be auctioned off because the tax was to high.
Reply 99
thegreatstupendo
Currently, inheritance tax stands at 40% on all the deceased's estate over £285,000. This allows people who have done no work, or anything else to deserve it, to profit purely because their parents had money.

How is it just that some people stand to gain a large windfall purely because of who they are, and who they were born to.

If inheritance tax was reformed, it would create a level playing field between people if all classes and backgrounds, making the UK a fairer, more equal society.

I propose that inheritance tax be increased to 100%, with the exception of one family house (up to a certain value, and that has been in the family for a certain number of years, as yet undecided).

As well as encouraging equality among the people of the UK, it would also allow the government to decrease otgher taxes, such as income tax, in order to encourage hard work among the population; preciesly the opposite of what inheritance tax is doing now.

Anyone agree?


I don't agree with any of this. So what if some people get lucky? That's life.

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