Interesting musings on inheritance tax from Matt Yglesias, including: "If I die with a $10 million estate and want to give $5 to 2 million different people, there doesn’t seem to me to be a good reason why the estate should be taxed. Better to tax inheritance since the actual concern is that I’ll give $10 million to my son…"
Matt is on fire today, hopefully not in a literal sense: he also coherently defends enjoying art that you know to be politically or morally indefensible (my related example would be Idiotic Bizarre’s rap on Eminem’s Amityville); and he has a new meme, of which more anon.
Despite my previous, err, harshness about Sean Thomas, he’s an irritatingly good writer. This week, he has a moving story of a Jew and his box from 19th century Cornwall, an excellent rundown of hangover cures (although he misses the most effective: start drinking again); and an attempt at winning the Bad Sex Award second time around.
Finally, the Adam Smith Institute has endorsed Robert Kilroy-Silk’s economic policy. The words ‘made for each other’ have never seemed so appropriate.
I notice that the ASI believe that Hong Kong has a flat tax. This is a common misconception. Due to all the deductions, allowances etc, its actually not flat at all.
Let’s all make love in London.
Did you read the ASI’s flat tax paper?
Basically it boiled down to:
"You can cut taxes a lot if you cut spending by £80bn a year"
To be fair (though I don’t know why anybody should be) Kilroy’s endorsed them. He probably needed an off the shelf solution.
Actually the economic thinking behind a flat tax rate is pretty simple and highly compelling. But it would probably be better phrased as a "single tax rate on all income irrespective of source, payable at the time of the event which leads to that income". Not very catchy but more explanatory. It could in theory then be tapered (much as the current income tax system is) if required but frankly I’m more in favour of a flat rate or more gentle progression up the slope (the step change from 22% to 40% is stupid).
I consistently fail to see why income should be taxed at different rates depending on how it was earned….
Simplifying the whole system would elimate (as a guess) about two thirds of the IR staff at least and make disposing of highly paid and socially worthless tax planning professionals easy.
If anyone is having thoughts about asset income and so called earned income don’t even start, your time (life) which you rent is an asset which you earn credits for which can be spent on other assets to maximise your overall asset return. The distinction between capital assets and income assets is purely an accounting and tax distinction, which isn’t conceptually valid
>If I die with a $10 million estate and want to give $5 to 2 million different people, there doesn’t seem to me to be a good reason why the estate should be taxed. Better to tax inheritance since the actual concern is that I’ll give $10 million to my son…"
But this presumes that the government wants richer people’s money to go to poorer people, when in fact they want richer people’s money to go themselves.
Is RKS in fact an Ali G type caricature? If so the actor who plays him should win an award. His election campaign launch looked hilariously deadpan – he just opened a copy of the Daily Mail and worked himself into a self-righteous fury about asylum seekers.
"the step change from 22% to 40% is stupid"
It’s somewhat more complicated than that. Essentially if you include NI contributions (and you should) we have a 0% rate, then a 21% rate, then a 33% rate, then bizarrely back down to a 23% rate, and then a 41% rate.
What I’ve never really understood about flat-tax advocates is why they insist on the tax-free allowance (and usually a hefty one). That removes the ‘flatness’.
I think the slogan "That cunt Kilroy Silk" is the most engaging that I have heard since the election was announced.
I recommend we all adopt the phrase "Vote for that cunt Kilroy Silk" forthwith.
Ta, John mate. Though actually I think Kilroy Silk adds to the gaiety of nations. Sean T!
I e-mailed a mate the idea that RKS was a spoof. He replied:
"An interesting concept. Too much theatrical make-up though – a real actor wouldn’t make that mistake. Because of this, I think he might actually be one of David Icke’s lizard people/aliens. Think about it… If they got all their information about earth from tv broadcasts, how would they end up disguising themselves eh?"
"he might actually be one of David Icke’s lizard people/aliens"
This is a compelling idea. However the only way to test it would be to dissect RKS and experiment on his internal organs. So let’s do that.
That Bizzarre sure is out there.
"It’s somewhat more complicated than that. Essentially if you include NI contributions (and you should) we have a 0% rate, then a 21% rate, then a 33% rate, then bizarrely back down to a 23% rate, and then a 41% rate. "
This is making my point there is no rational reason for the different rates and the effect is quite odd, i.e. someone who starts to earn more than £30k experiences a lower marginal tax rate WTF?