JUST TAX THE FAT CATS
Only The Super Rich Should Pay Inheritance Tax.
Taxation has three functions:
i) To collect revenue for the treasury,
ii) To have a regulatory effect on the economic behaviour of individuals, thus influencing the structural constitution of a society (levels of second home ownership, size of aristocratic land estates etc),
iii) To have a regulatory effect on national economics, to be a lever of power in the macro-economic control room, one that is used to tailor rate of growth to fit national economic policy at any given point in time (as it in turn responds to other economic factors in play, the volume of money in circulation, interest rates, domestic industrial competitiveness etc).
All taxes are not made equal and therefore each one has its own potential sphere of influence i.e. whether it affects the structural constitution or the macro-economy or not (and by how much) and a better understanding of these regulatory mechanisms can lead to benefits for society as a whole through reform to taxation. In other words it is possible to make the best out of a bad deal when it comes to paying your dues, there is beneficial potential lying unrealised in our current taxation system and more consideration given to regulatory mechanisms would release it. Taxation could and should be better.
Income tax primarily regulates macro-economic growth e.g. reducing it boosts the economy because people are better off and thus spend more whereas inheritance tax (if used correctly) primarily regulates the structural constitution of a society through countering the hoarding of wealth and redistributing the access to opportunity that comes with it.
The selling of farmland by large aristocratic estates in order to pay inheritance tax demands has been one of the only ways in which the lower levels in the economic pyramid (including tenant farmers) have historically gained access to such equality of opportunity via land ownership. The decentralisation over the years caused by ‘inheritance tax attrition’ has in fact been instrumental in forming the food production system that we have today and it is through this system that a separation of power against state tyranny has been built. The fact that our means of our food production now lays primarily in the hands of a distributed network of privately owned family farming businesses is due in part to the regulatory mechanism of IHT. Without it the common people would never have been able to raise a bulwark against totalitarianism, something that the neo communist private equity giants currently forcing ultra liberal open borders globalism on the world despise with a passion! And make no mistake, when large amounts of land starts coming up for sale it will be the likes of Blackrock, Vanguard, Blackstone, KKR and ‘philanthropic’ billionaires such as Bill Gates who will be sweeping in for the opportunity to ominously ‘work with government’ and ‘make agriculture sustainable for the 21st Century’.
The regulatory function of Inheritance tax can be used to support our food security through grant of exemption to family farming and by the restriction of monopoly ownership at the higher end of the acreage scale. I believe we are missing a trick and would have more public support if we campaigned to ‘just tax the fat cats’ rather than ‘scrap it for everyone’, we should harness its potential to serve the people not chuck the baby out with the bathwater.
Yes taxation in general is out of control (highest since 1948) and yes we’re getting completely ripped off by the quality of service (or lack of it) received in return but my approach would be to cut income tax to address this wider situation (along with stopping the wasteful spending on nonsense of course). Cutting income tax across all bands would benefit everyone; it would be a very popular approach and would boost economic growth and levels of national wellbeing instantly.
The wealth redistributive, monopoly checking and opportunity creating regulatory characteristic of IHT should be leveraged to our advantage and it should be redesigned so that:
i) the poorest in society are supported and don’t end up paying it.
ii) farming is made entirely exempt to uphold the vital separation of power between the state and the means of food production.
iii) the super rich get taxed and regulated to ‘enforce philanthropy’, this will break monopoly and create more equality of opportunity.
There’s one really simple solution to achieve this, it will do all of the above plus simplify the complicated mess of thresholds and exemptions that currently surround IHT (and its avoidance).
Here’s how it would work: APR & BPR would be done away with, an exemption threshold would be set and a progressive taxation structure put in place above it. Legislation would be brought in to close any avoidance loopholes and enforce a maximum acreage cap per person. The thresholds quoted are those for a married couple, so half them for a single person or a business, spousal transfer would still be allowable, estate value to be index linked to cpi inflation.
Please note that this IHT scheme applies only to agricultural farmland as defined by inclusion in the DEFRA Utilisable Agricultural Acreage figure, it does not apply to woodland or any other classification of land.
Alongside this new threshold structure some legislation would need to be brought forward to ensure that government can close down any tax avoidance loopholes:
1. Prevent foreign registered ownership of UK farmland (inc farmland held in trusts). Many territories have 0% inheritance tax, Israel, Norway, Eire, Bahamas, Cayman Islands etc, the wealthy have many options for offshore registration of their holdings.
2. Bring trust taxation in line with the tax rates applicable to non trusts. Currently IHT is due on trusts at 6%/decade or 0.6%/year. Farmland has risen by an average of 3.6%/year over the past decade so even paying the 0.6% effective annual rate the owner is up 3% in asset value due to land prices increase.
3. End heritage status avoidance. Estates over 2000 acres are eligible to be declared heritage assests and are therefore not subject to IHT.
4. Acreage cap to be introduced. Ownership of more than 20,841 acres by any one person or 41,683 acres (a one thousandth of the UK total) by any married couple to be made illegal.
5. Make the crown estate liable for IHT the same as everyone else. The monarchy have stood by in silence as they have watched this country be ruined by central banking, usury, the climate con, open borders and anti Christian cultural degeneracy, they have forfeited their legitimacy of kingship and can no longer be supported by the state.
I concede that it would be a big challenge to get an act of parliament containing the points listed above passed into law, it may therefore be strategically better for farmers to initially campaign to roll back the APR and BPR changes or to scrap IHT outright for everyone. Either of these two options will be more achievable in the short term and they would both get the urgent job done which is to remove the threat to family farms and to the separation of power between the state and the means of food production. The higher threshold approach which supports the poor, protects our food supply and regulates monopoly by the super rich may be better stated as a second stage longer term aim.
One thing is for sure though, IHT is an unpopular tax, it’s complicated, distorts economic activity as people invest and de-invest unnecessarily to avoid it, and it’s ultimately double taxation at a time when families are grieving and trying to cope with the loss of a loved one. The silver lining of monopoly prevention through wealth redistribution is the only good thing going for it and it would be a useful regulatory tool if used by the hand of someone wishing to not see the current new world order corporate communism prosper in our land.
So let’s not forget that inheritance tax is cool for cats, just the fat ones.