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Jun 5, 2008

Death Taxes, look forward to them.


What is it with academics and death taxes?

Ross Guest a professor of economics at the Griffith Business School, has written an article, “Inheritance tax a worthy inclusion on tax reform agenda,” to push the case for one for the Government's Henry review of the tax system, to be completed by late 2010.

In it he insists that all proposals should be on the table. He then suggests an ‘inheritance’ (death) tax, in return of course for lower taxes on income or goods and services.

In Queensland, Joh Bjelke-Petersen government, abolished inheritance taxes (commonly known by the government as estate tax or death duty) in the late 1970s. All other governments were forced to follow suit.

“Inheritance taxes could help boost the labour force participation of older workers (over-60s), something we now recognize we must do. Research shows this is the most effective way of offsetting the costs of population ageing in terms of future living standards. 

Calculations show if we gradually increased labour force participation rates of 60 to 70-year-olds, so they were equal to that of 55-year-olds today, we could reduce the cost of population ageing by more than 50 per cent.


Many baby boomers, aged between 48 and 63, are now receiving large inheritances from their deceased parents whose houses have appreciated considerably in real terms over the past two decades. 

At the same time, these baby boomers have often enjoyed rising real prices of their own assets. Such windfall increases in wealth tend to discourage labour force participation - exactly the opposite of what we need. A modest tax on inheritance would reduce the size of a windfall gain, encouraging people to remain in the workforce.


Inheritance taxes score well on the two most important criteria for a "good" tax: fairness and incentives. The tax is fair on the ability to pay principle - windfall gains in wealth give people a greater ability to pay tax.”
Academics oddly never seem to approach reform from the perspective of cutting back on the size and scope of government, or even the growth thereof. They extol the ‘virtues’ of a better form of taxing.

The thing they love above all others is social engineering that is making adjustments to the tax and incentive system to achieve a result, which they consider to be ‘socially desirable.’ In other words force us to do what they want, and create their vision of Utopia.

Note how he says, “Such windfall increases in wealth tend to discourage labour force participation - exactly the opposite of what we need. A modest tax on inheritance would reduce the size of a windfall gain, encouraging people to remain in the workforce.” Well stiff to all you dumb bloody shitheads who might have other ideas on what you want to do with your lives, we have a common good in mind for you, and you will do as you are bloody well told.

He then goes on to say, “By taxing the inheritance in the hands of the beneficiary, the tax rate can be adjusted to take into account other income. Those with higher amounts of other income pay a higher rate of tax.”

Well doesn’t that just make so much sense, (if you have a fetish for heavy progressive taxation that is?)? Those who are already making a higher ‘contribution’ through tax should be asked to pay more on any inheritance.

We then are treated to his theory that we don't know exactly when we are going to die or what our medical expenses will be which encourages many people to "over-save" to compensate. “They die with surplus wealth.”

Oh shit, isn’t that just awful for them. Don’t we all agree that we just need to have it taken by the government for the sort of programs Ross Guest likes, in order to save us from such a fate.

Death taxes are inherently immoral, as they assume that assets which have been accrued through a lifetime, from income that tax has been paid on, deserve to be taxed again to meet some social agenda.

3 comments:

  1. The liberals never met a tax they didn't like.

    Although they trot out pointy headed so-called scholars from liberal Uni's to bolster their arguments with fancy schmantzy rhetoric, underneath it all it's tax tax tax.

    You can call a ham sandwich ice cream, but it's still a ham sandwich.

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  2. George Harrison said it all in this forty-two year old song. I updated a couple of the evil culprits, from Wilson and Heath, to Rangel and Reid

    Let me tell you how it will be;
    There's one for you, nineteen for me.
    'Cause I’m the taxman,
    Yeah, I’m the taxman.

    Should five per cent appear too small,
    Be thankful I don't take it all.
    'Cause I’m the taxman,
    Yeah, I’m the taxman.

    (if you drive a car, car;) - I’ll tax the street;
    (if you try to sit, sit;) - I’ll tax your seat;
    (if you get too cold, cold;) - I’ll tax the heat;
    (if you take a walk, walk;) - I'll tax your feet.

    Taxman!

    'Cause I’m the taxman,
    Yeah, I’m the taxman.

    Don't ask me what I want it for, (ah-ah, Mr. Rangel)
    If you don't want to pay some more. (ah-ah, Mr. Reid)
    'Cause I’m the taxman,
    Yeah, I’m the taxman.

    Now my advice for those who die, (taxman)
    Declare the pennies on your eyes. (taxman)
    'Cause I’m the taxman,
    Yeah, I’m the taxman.

    And you're working for no one but me.

    Taxman!

    Regards,
    Will

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  3. Thanks Fellas; I had the pleasure to be around when Joh abolished death tax. The politicians said it couldn't be done. The press said it would disadvantage the state. The economists said it would bankrupt us.

    We Queenslanders loved it. The Victorians, New South Welshmen, Tasmanians,.... loved it and wanted the same.

    Lefties have been trying to get it back ever since.

    ReplyDelete