@lostsettler@mastodon.scot
You're wrong - there are always non-zero-thresholds for tax - if you think it through you'll see why there must always be thresholds. This Labour government very clearly favours the rich, so there is no danger of any dramatic change (nor would I favour that - people plan long term for tax so changes have to be phased in, sometimes over decades).
You also repeat the illogical argument that tax has already been paid. But it hasn't. Person A earns a sum of money and pays tax on it. At some point they die - they no longer exist. Person B is gifted a sum of money (that once may have belonged to A). Person B hasn't already paid tax on it. ALL money previously belonged to somebody else (with the exception of the government. which makes it all) and was almost certainly taxed when it did so - think of money circulating in the economy used repeatedly for VATable purchases.
But you ignore the main point: tax should be paid on all gains, not just 'earnings' - and this is not just for tax justice. If you exempt unearned income you just exempt everybody that is already rich, and ensure the passing on of privilege across generations; you also distort asset values to the disadvantage of everybody except the asset-rich (because you incentivise asset investment over enterprise - ie. earning - so productivity falls, etc, etc - the whole society gradually gets poorer - this has already happened to the UK to some extent because it has been taxing unearned income less than earned income for years).
All of society in the end is better off with a fair tax regime. Believe me, there are simply no rational arguments for exempting unearned income from tax - the incoherent arguments sown in the Tory press are really just covers for greed and privilege, intended to mislead.
I'm not opposed to Scottish independence by the way - nor do I live in the UK anyway - but would be opposed to an independent Scotland not taxing unearned income, because that would simply be shooting itself in the foot.
@GeofCox@climatejustice.social Broadly agree. But...
There is an important issue around CGT at the moment, and that's inheritance tax for farms and farmland. Unfortunately, a number of rich people (see Clarkson) have been buying farms to avoid inheritance tax. The government has closed this loophole by applying inheritance tax to farms, however it's a sledgehammer to nut scenario because in one fell swoop they've pretty much ended family run smallholdings. /1
@GeofCox@climatejustice.social These people (and I know several) barely make a living, certainly rarely make a profit, and when they do they tuck it away for the years when they know they will make a loss. If the government slaps them with a 6-figure tax bill when their parents die it's game over. There is a generation of passionate, young(ish) people working in the agriculture sector who will just have to sell the farm to a Clarkson when they can't pay their CGT.
@greg_harvey@tooting.ch
I would need to see very detailed figures to convince me that this is a real problem (though I of course believe that some farmers have fallen for the big landowners' and tax-dodgers' propaganda on it).
Nearly half of farmers don't actually own all or part of their land; the average UK farm holding is only about 200 acres - but the vast majority are smaller than this in terms of land ownership - actually nearly half are around 50 acres.
The £1million threshold does not stand alone - it was introduced alongside other existing allowances, which can easily amount to £3million - and of course there are other tax planning measures that can minimise inheritance tax in other ways. In effect, only farms larger than 350 acres should be affected by Labour's inheritance tax changes. If a farmer with that amount of land is really marginal, when most manage on less than 200 acres, maybe they should consider getting out of farming altogether ?
It's not just me saying this by the way - independent tax experts like Richard Murphy have made similar points (eg. https://www.taxresearch.org.uk/Blog/2024/11/18/farmers-protesting-about-inheritance-tax-have-got-their-econonics-and-arguments-wrong/)
With any tax changes, there will of course be winners and losers, but in this case almost all substantial losers are going to be very large landowners - especially those whose main purpose was to dodge tax - but the vast majority of farmers, and the rest of us gain, because the inheritance tax will bear down on land prices, enabling many young, efficient small farmers to set up or expand - and also increasing yields (which are generally higher for smaller farms). Note also that as land prices fall, more farmers fall below the tax thresholds anyway.
It's very analogous to the UK housing mess - taxing unearned gains less than earnings incentivises asset value inflation, putting houses - and land - out of reach of everybody but the relatively wealthy - and at the same time undermining the country's productivity by channeling investment into assets, away from enterprise, efficiency, etc...
@GeofCox@climatejustice.social I'll find out what his acreage is, but a friend of mine I was talking to just last week is farming his dad's old farm. His dad is in his 90s, still around, still on form, but for how much longer? 🤷
It will be valued at around £2m (probably half of which is farmhouse and three cottages) and that will definitely put him out of business, the tax will not be survivable for his operation.
@GeofCox@climatejustice.social He must have about 100 acres, doing the rough maths on estimated valuation and price per acre. He doesn't seem aware of any thresholds that will save him. At the moment his dad owns the lot, although he lives in the farmhouse, his mum and dad live in one of the cottages and workers live in the other two. So on paper he owns nothing, but will inherit it, at which point he's expecting - perhaps wrongly? - a tax bill around the £500k mark.
@greg_harvey@tooting.ch @GeofCox@climatejustice.social
Sorry for butting in, but has he not gifted property to his heirs before this in a Potentially Exempt Transfer (PET)? Does his dad have a competent adviser?
https://www.gov.uk/guidance/work-out-inheritance-tax-due-on-gifts
@GeofCox@climatejustice.social He's usually pretty informed about this stuff though, he's an active member of the local NFU branch...
GeofCox
