mulben

Inheritance tax , when last in OZ created a willing market in family Trusts which circumvented this odious tax. Solicitors probably reaped the same amount that the tax would have.

Rambi

And it would probably cost the same of similar for a super rich person to do but with bigger tax savings. Can you see where my original point comes from?

As an aside. Aus no longer has inheritance tax. When were you last here?

mulben

No , I meant when inheritance tax was last part of the Australian tax , circa
1970s not when I was last here -understand your confusion and I did agree with your point. Most if not all tax minimization was based on the Gorton scheme which on appeal to Tax Dept. was then shifted to Porta Villa in
Vanuatu , this became defunct when inheritance tax was scrapped .
The super rich generally did not use these schemes of arraignment as they were already set up as private companies trading via a trust.

Deancm_MKII

It might inform us of nothing that we don't already know however, what it does do is corner the PM and show her for the lying, deceitful, hypocrit that she is, especially when confronted with plain as daylight evidence (i.e. a voice recording of her actually saying "there will be no carbon tax").

Deancm_MKII

And we'd be better off and still save billions in taxes.

Sally Simpson

Bastard politicians! I'm sure Mugabe promised to be a good, selfless leader too at one time!

Deancm_MKII

Yeah but Mugabe was a dictator. We are supposed to live in a democracy, which is a bit ironic considering we didn't even get a say in the current govt and it was all sorted in back-room deals.

Sally Simpson

and the difference is?????

Oh yes, we believe we live in a democracy but do not,
They know they live in a dictatorship & unless you want to be raped & or murdered, you'd better believe in it!
Huge difference!

Cape Blue

I am not sure I understand the drag on the poor bit - the poor don't have any significant assets when the die so won't be paying it.

Sure there are way for people to try and circumvent IHT, but that tells me we should close the loopholes (like family trusts) rather than give up on the concept.

I like the idea of paying some of my lifetimes tax contributions when I am dead - certainly prefer to pay them then, rather than when I am alive.

Rambi

Sure there's billions to be saved but I wouldn't take it to the extremes you suggest. I think you're ignoring the law of unexpected consequences and the loss of some efficiencies will end up costing the individual more.

On a technical point. You seem to suggest that consumption taxes are good but seem opposed to carbon tax even though it is a consumption tax.

NedKelly

That's a question I have been pondering. Fuel has gone up steeply, so has food. Have you checked your electricity bill lately? Add water hikes to that plus flood levy tax and carbon tax and that all leads to inflation. If interest rates go up the average Joe is completely stuffed.

paulry

I get it. It's along the lines of: "Not enough of you suckers voted for me so here - have some carbon tax!"

Rambi

The suggestion was that people pay 50% with no allowances. Say, for example, someone poor dies with a house worth 100k and 10k cash. The house has to be sold and the inheritor gets 55k. Someone wealthy would have a house worth say 10m but with cash of 100m. They would pass on 55m without needing to sell the house.

Although the percentage is the same the poor person is hit harder as they are left with less wealth to establish a comfortable life.

In a real world example like the UK where you do have an allowance only about 11% of people over the allowance end up paying IHT. This is because those that are able to, put in place provisions to avoid the tax. The people who get hit by the tax are those that are rich enough to be over the allowance but not rich enough to avoid the tax (as mulben said earlier for these people it costs as much to avoid the tax as the tax itself). Therefore the UK IHT tends to hit people who are moderately successful.

As for paying contribution when dead. I think the 35-40% of money earned over a lifetime is enough of a contribution.

IvanM

Did you not vote?

Cape Blue

I think we probably have a different definition of poor people - I don't tend to think of someone with 100k house as poor - I consider those renting or in council-type accommodation as poor, those owning a property seem one step above.

That said, there is a valid argument for some sort of allowance (although I prefer none).

You mention that the poor (or not so poor, depending upon ones view) person is hit harder - but that is to some extent my point - neither poor or rich person is "hit", they are dead already. The person who is "hit" is the beneficiary who has done nothing for the money and is getting free manna from heaven, regardless of how much is taken in tax.

On your 35-40% over a lifetime, again this is partly my argument - if we assume we are all going to pay 35% over a lifetime, I would rather pay 25% of it whilst I am living and 10% after I am dead as opposed to all 35% when I am living. I think we should be trying to keep money with people when they need it to pay for their education, buy themselves a home, bring up their kids etc. Having them pay a chunk of their "35%" after they die seems a good time to pay it.

Regarding IHT avoidance/evasion, well, people avoid all sorts of tax, doing work for cash, not declaring income or capital gains etc. I don't think the answer is to give up, we just need to continue closing the loopholes. If very rich people are finding ways to avoid IHT we need the tax authorities to find ways to to ensure they can't.