It would also make it virtually impossible for any family business to ever afford to transfer its ownership within the family to the next generation, as most firms have their equity tied up in working capital or generally illiquid assets.
I agree, and personally oppose any kind of inheritance tax, and not because I anticipate any large sum. Here is an example of a friend of my parent’s in Germany. After WWII he was 15, his brother 19 and both his parents had died during the war. The older brother got work and started rebuilding a badly damaged house where the two brothers eventually lived. The older brother never married but lived with the younger brother and his family in the house they rebuilt. Turns out that the area they lived in would become a very popular area of Cologne. When the older brother died he left the house to the younger brother who had to then sell the house because on a teachers salary he was not able to get a mortgage to pay the inheritance tax.
In principle is it better to have lower income taxes and higher inheritance taxes?
I think taxes overall should be lower, rather than raising one to lower another and then a couple of years later another politician decides to raise the latter again so the overall tax take is higher than originally.
Why should anyone feel entitled to inherit their parents wealth (including the family home)?
I don’t think anybody should feel entitled to anything, but if a parent decides to leave something to their children then that parent should have the right to do so without the state taking a share. I think it is totally immoral to simply take private property because you think someone has “too much”. That is mob mentality and severely infringes on private property rights. What I do with my private wealth should be of no concern to anybody.
If the taxation scenario changes dramatically, people will motivated to find other ways to avoid tax and, indeed, nursing home charges. Shouldn't people to able to leave a house to their children?
I agree. I think in general this sort of idea gains popularity because people think of taking something away from “the rich” or “the super rich”. If I was due a large inheritance I would move to a country that has no inheritance tax to completely legally avoid inheritance taxation and return a few years later. The lower the inheritance tax would be the less likely I would choose this approach.
Why? I hate inheritance tax, absolutely hate it. If I choose to work hard all my life and want to then leave the fruits of my labour to my children why should the government of the day get a chunk of that? I earned it, I paid my tax along the way, it's mine now to pass on as I see fit as far as I'm concerned.
Absolutely, it should be nobody’s business what you do with your wealth before or after you die. It is your property and in a free society you should be able to dispose of it as you like.
Wouldn't a much fairer tax (I know that is a contradiction in terms!) than inheritance tax be a wealth tax? Tax savings/assets over a certain (reasonably high) threshold to encourage more current spending and less stock piling? Again there would be difficulties in how to implement this but I would see this as a much better way of encouraging current spending (which seems to be the aim yourself and Brendan are striving for here) than a blanket tax grab on inheritance.
No, spending is wealth destroying. When money is “stockpiled” as you say then it doesn’t leave the economy. Saved money is absolutely crucial, as it provides the basis investment in the productive economy. The last thing especially Ireland needs is more spending. What is lacking here is investment, whether directly or indirectly through saving. A wealth tax discourages this.
If this tax existed I for one would be handing my kids the inheritence in cash over time. And so would everybody else.
Indeed, it has been shown time and time again that increased taxes lead to a higher rate of avoidance and evasion while lowering taxes has the opposite effect.
And I suppose that's the point - would it be better to have money in circulation in the economy, being spent by the younger generation, than being kept out of the productive part of the economy by the stockpiling of the older generations?
No, spending does not benefit an economy per se, and definitely not an economy that is in trouble. When money is spent there is less money for investment which means there is less money for business expansion, which means there are less jobs. You have to produce before you can consume.
