Raising tax for health and social care: National insurance or income tax?

Last month, the independent panel of health experts set up by Norman Lamb published its interim report on “a new deal for Britain’s Health and Social Care Services”. The panel were “unanimously of the opinion that it is necessary to raise additional revenue for health and care through taxation” and Spring Conference seemed to agree. Similar views may partly explain why the Conservatives have so far (sensibly) refused to rule out any headline tax rises in the next Parliament.

The interim report, which may influence the Lib Dem manifesto, concludes with three options: 1) raise Income Tax (e.g. raising all rates by 1p); 2) raise National Insurance (NI); or 3) introduce a dedicated health and care tax. All have their pros and cons, and in the grand scheme of things Income Tax and NI rate increases raise similar revenue and are both very progressive. But in this post I want to highlight a few reasons why the current NI system might not be the fairest vehicle for boosting health and social care – points that are also important for considering what a ‘dedicated’ tax should involve.

Don’t raise employer National Insurance

First up, there’s a question about what forms of NI would be increased under that option. In short, you would want to raise the personal forms of NI that individuals – employees and the self-employed – pay, but not employer NI. That might sound backward – hitting individuals but not companies (though in the long run both just reduce take-home pay). But the existing employer NI system already creates damaging and expensive distortions. Foremost, it creates a large incentive for companies (and you and me) to use self-employed labour rather than employees. No-one seems to be suggesting this but for the avoidance of doubt: unless/until that major problem is solved, don’t raise employer NI further.

Pensioners don’t pay National Insurance

Perhaps the biggest difference between Income Tax and NI is that people over State Pension Age don’t pay NI. There is no good reason for this exemption, let alone exempting pensioners from any new tax increase. This would suggest that raising NI – as it stands – is not a very fair option. But the exemption could be ended, which would raise additional money for elderly care.

There are actually two separate questions here. One is whether working pensioners should pay NI on their employee or self-employed income just as working non-pensioners do: they should. But there is also a very strong case that private pensions should be liable to NI just as they are to Income Tax (perhaps alongside a little pension tax relief reform). And when it comes to funding an improved health and care system, isn’t it reasonable to ask those who have already retired to contribute too? The Barker Commission in 2014 was certainly of the view that older generations should play an important part in any funding increases – and that we should look at wealth taxes as well as income taxes.

Landlords don’t pay National Insurance

Just as NI doesn’t apply to pension income, nor does it apply to rental income or savings interest. Landlords – or those with very substantial savings – would therefore much rather we raised NI than Income Tax. It’s not clear to me why we would ask teachers and hairdressers to pay a bit more for public services but not ask the same of property owners.

Neither increases in Income Tax nor NI would apply to dividends, capital gains or inheritance. The party should seriously consider raising some or all of these rates to the same degree as any Income Tax or NI increase, even if it doesn’t try to raise money from broader wealth tax reforms.

National Insurance starts at a lower income

The Income Tax personal allowance is £11,500 this year, but the equivalent allowance for NI is only £8,200. This means that an NI increase affects workers on lower incomes than an Income Tax rise would. And an increase would be slightly more costly for workers than an equal Income Tax rate rise due to the smaller allowance.

I have been critical of the policy of raising the Income Tax threshold (especially at the same time as cutting benefits). But if the party were to propose raising NI rates, a small increase in the starting threshold would be one way – albeit an expensive one – to offset any impact on low income workers.

Conclusion

I’ve not looked at the politics of these different options (and I’ve skipped some issues such as the weekly and per-job nature of NI, and the taxing of state benefits and benefits-in-kind). Certainly the public seem to prefer NI increases to Income Tax increases. But Norman Lamb has made clear he favours “a penny on Income Tax” as the short-term solution. I think he’s right. Raising Income Tax (and dividend taxes) would be fairer than raising NI in its current form. It would certainly seem contrary to most Lib Dems’ beliefs to choose to raise a tax that only targets earned income and ignores income from wealth.

But what then of our broken and complex NI system? And what of the longer-term funding option, also favoured by Norman, of a ‘dedicated health and care tax’? Perhaps we can kill two birds with one stone. Scrap the existing employee and self-employed NI system; instead add those NI rates onto Income Tax (in practice); while (on paper) keeping them separate as a ‘National Health and Care Contribution’. This reformed version of NI would cover more forms of income than the current system, have no age limit, have a higher starting point and – of course – have rates that were higher and perhaps flatter than at present (currently they are 12% for most people and 2% for higher earners).

All that still leaves big questions about the proper role of the UK’s vast property wealth and inheritances in funding decent care. Nevertheless, the independent panel and manifesto authors face a tough challenge in crafting tax increases that are sufficiently large, popular, progressive and economically sensible. But from the ideas floated so far – and hopefully some of those above – it seems like that might just be possible.

* Adam Corlett is an economic analyst and Lib Dem member

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27 Comments

  • Raise inheritance tax? I would rather compelling the truly rich to pay firstly. Failing that it should be cut if anything given how many EU countries do not even have this kind of tax (Portugal Norway Sweden, Austria, Romania, Bulgaria, I could go on. Or ones that do such as Greece 1-10% and Italy 4%. Given the Lib dems are pro EU seems their policy on inheritance seems out of step with the eu on this issue.

  • Sue Sutherland 27th Apr '17 - 12:15pm

    The NHS needs help now! So put up income tax straightaway. Then look at other forms of taxing fairly in detail after this snap election . I think this could be in the manifesto.

  • Eddie Sammon 27th Apr '17 - 12:30pm

    As a general point I wouldn’t equalise self-employed and employed taxes. I know you don’t think this is fair, but ask yourself what you would rather earn: £25,000 employed or £25,000 self-employed? It’s very hard to budget when self-employed because you don’t know what money is coming in each month and in financial principles this can be justified via risk-premium.

    I wouldn’t mind too much if they were equal, but I’ve seen some frightening graphs suggesting we need big tax increases on the self-employed and I find that proposition frightening. Again, according to financial principles: 100% of the cost of employer’s NI is not always passed onto the employee.

    On taxation of landlords: in my opinion part of this has already gone too far because mortgage interest is no longer a deductible expense (as far as I am aware). They pay higher CGT rates too. I don’t think landlords can put up with another round of tax increases. Landlords can get into financial difficulty too.

    I strongly disagree that there is much scope to raise dividend taxation. They are taxed less because of corporation tax. VAT also costs business owners some money too.

    Again, I don’t mind a small increase in tax, but increased taxes can push people into financial difficulty too, so we need to be careful. We also need to see the cumulative rate of tax rather than headline rates. When limited company owners budget they need to consider all the taxes combined, not just dividend or capital gains tax.

    Best regards

  • Definitely don’t raise employers NI. In my opinion we should be looking to reduce or abolish it. At a time when people are concerned about automation, AI and robotics replacing human employees, it’s nonsensical to tax employers for the privilege of employing actual people whilst offering them tax benefits if they invest in robots (like we do now).

    Personally I would like to see inheritance tax increased (and inheritance tax avoidance eliminated) – nothing locks in inequality and social immobility like passing wealth down through families untaxed. And how about limiting tax relief (eg. on pension contributions) to the basic rate, even for higher rate taxpayers?

  • Politically the best solution is a new tax paid on all income whether earned or not and paid by pensioners. This would be true even if it had to be set at 2% because of increased costs in collecting it. People like the idea that the basic income tax rate is 20%. They forget that NI is 12%.

    National Insurance should be reformed but we failed to do it when in government. We played with the link between it and the old age pension. The state pension should not depend on the payments a person has made. However special provision would need to be made to collect NI from workers working in foreign countries to ensure they pay towards pensions like people working in the UK. Once the link between the state pension and NI contributions has been weakened those over pension age can pay it too and the threshold increased to at least the Income Tax Personal Allowance (if we are keeping this). It also needs to be extended to unearned income.

    In the future we have a huge taxation problem looming. Most tax is collected from earned income but an increasing percentage of the National Income goes to people in unearned forms and this is set to continue to increase. We need to increase the amount of tax paid on capital to be above that taxed from labour.

  • Or cancel HS2 and use the circa £2bn pa on the NHS. It’s simply a question of priorities…

    I think there has been much about raising taxes but very little about the effective spending of existing tax revenues, which probably goes back to 2010 when the Coalition failed to be truly clinical about addressing wasteful expenditure. For a shortlist of examples of significant wasteful expenditure, you only need to look at the findings of the PAC and note the total lack of follow up by the government…

  • Matthew Huntbach 27th Apr '17 - 1:55pm

    Sam

    Why do you think that if someone get half a million pounds or so by working for ten years, they have to pay a big whack of it in tax, but if someone gets it just because they have the right sort of parents, it’s fine for them to pay no tax on it? Wouldn’t it be better if we rewarded hard work by earned income less and unearned income more?

    With those other countries that you say have less or no inheritance tax, do they have anything in the way of property tax? A big issue in the UK is that it is so much more profitable to invest money in sitting on your bum and owning housing rather than working hard. Property tax can in effect become inheritance tax if it effect it is paid by equity, and this can be used as the argument against those who argue against it with the usual example of the little old lady with a low income in a big house.

    A huge problem in our society is that money gained from inheritance is being pushed back into housing, passed on from grandparents through “bank of mum and dad”, which is now almost a necessity to buy a house. Given that house prices are set to what people can pay for them, in effect rising house prices passed on like this are causing rising house prices, a dangerous upward spiral, squeezing out those who don’t have the right parents.

    Doesn’t the freedom of people to have their own home matter to you? Do you like the idea of a society where there is a massive division between those with inherited wealth and those without?

  • Inheritance tax makes the most sense from a utilitarian perspective, large inheritances simply encourage people to withdraw their labour. Income tax (and national insurance is basically an income tax) has its merits but makes work less attractive.

    That assumes we even need to raise taxes at all to pay for the NHS. We seem obsessed with handbag economics which falsely dictates that any increase in public expenditure must be matched with an increase in taxation.

  • Lorenzo Cherin 27th Apr '17 - 2:04pm

    We should have a health and care tax.

    Paid on income.

    And we should do it after a panel and real conference of those involved decide it’s level.

    When David Laws proposed social health insurance as a model, he specifically argued it should be paid by tax for those working , the state paying in to the pot for those not.

    He was vilified as “privatizing the NHS “!

    We need to grow up. Our starved system that never keeps up with developments in the health market, yes , that word , that describes, innovation and development and inflation, all of which in health are increased because of progress by scientists and those who drive things in the sector.

    We , as the party of a philosophy of flexibility, for Liberalism must be that or it is nothing but warmed over socialism or conservatism, need to be radical and moderate on these big issues.

    David Laws was motivated by the desire to help a constituent waiting over a year !

    Whether his solution was correct is not important.

    We need ideas . The statist system model has failed. The privatised one would always.

    Time for the holistic approach to health and health services.Honesty, unity, and , yes, flexibility !

  • Andrew McCaig 27th Apr '17 - 2:14pm

    In our country family wealth is overwhelmingly unearned – it comes from increase in house prices far outstripping inflation.

    That wealth MUST be taxed and the cutting of inheritance tax by the Tories was an absolute scandal!

    On NI on pensions – I am planning for retirement and have factored in the reduction in NI contributions in my planning. I would much rather see NI contributions above the upper tax threshold increase from the ridiculous 2% they are now..

  • Peter Martin 27th Apr '17 - 2:31pm

    If we understand how money works we have a better appreciation of why taxes are levied.

    From the POV of the currency issuer, spending has to come before taxation. We can see that this must be true, when we think about it logically. If government hasn’t first spent the money into existence, how can we possibly pay our taxes? We pay our taxes , not because the currency issuer needs back its own IOUs which it has already issued, but to create a demand for the currency and therefore a value for it.

    Furthermore, the currency issuer can never get back more in taxes than it has issued in the first place. It is always in debt and deficit. It is always spending more than it is ‘earning’.

    So the upshot of all this, for the NHS, is that NI and taxes may not have to be raised to provide a better service. Governments instinctively know they don’t have to raise taxes every time they want to build a new jet fighter. The economics are no different for a hospital or the salaries of NHS staff.

    So the question to be asked is if the economy is at full stretch and if additional spending will likely produce more inflation than is considered desirable.

    If the answer is NO, then there is no need to raise taxes or NI.

  • Graham Evans 27th Apr '17 - 2:47pm

    The problem with the reformed state pension is that it is still far to low for anyone to reasonably live off. Even more so if they have to pay rent. In Germany the contribution rate is for the basic pension is 19.6% of pay for earnings – half employee, half employer – up to €67,200 pa, but for this you get a pension of €2526 per month, and the average pension, based on average earnings, is €1263 per month. This compares with a paltry £700 per month in the UK. The problem with national insurance is that it is used to finance a myriad of social security benefits (as well as the NHS) and no-one knows what they are getting for their money. Incremental reform of tax and NI is an impossible task, but no political party seems willing to grasp the nettle of fundamental change. A specific health and social welfare tax, coupled with compensatory cuts in income tax and NI, would at least make it clear to the population what they can expect for their money.

  • Why not this one?
    https://www.libdemvoice.org/property-uplift-recovery-tax-54023.html

    Inheritance tax must be heavily skewed towards the rich, especially those with inherited wealth Duke of Westminster, or it would put burden on indebted households.

    The rise in income tax should be more about unearned income tax.

  • Graham Evans 27th Apr '17 - 3:42pm

    The problem with all forms of taxation which are not linked to specific types of expenditure is that every interest group will claim that their needs are greater than others. This is surely the problem of the Labour Party when it comes to their economic competence – every time they propose a new form of taxation or increases in taxes, their opponents claim that they propose spend the money two or three times over. The clever element of Paddy’s 1p on income tax for education and Brown’s 1% increase in NI for the NHS is that people could understand where the extra revenue was going. There may be a case for increasing inheritance tax, CGT, and other taxes to fund government expenditure which does not directly impact on individual voters – such as for instance on the armed forces – but the average elector doesn’t believe a word of what politicians say unless the voter can see a direct link between the increase in taxation and improvements in services. Simply making claims that it can all be financed by taxing the rich, simply doesn’t address the problem that British voters want continental standards of service, while paying US style tax rates.

  • NI should just be wrapped in to income tax, it would simplify the system and remove the weird exemptions outlined above (like the retired high earners being exempt). It would also finally end thei stilly idea peoepl have that it is somehow a hypothecated tax (as even people discussing tax policy on LDV still hold). Additionally it also perversely affects (for the lower earners: costs and for the high earners: benefits) people with uneven incomes.

    We may need to raise the rate too but first merge the taxes to eliminate the loopholes in NI then work out what needs to rise.

    Ad for a wealth tax, no just start to move to LVT much more efficient. As for dividend, CGT etc. there needs to be a holistic approach.

  • Mathew I would say address the reason for high house price inflation rather than combat the symptom which is for many many years we have not build anywhere near enough homes(which the lib dems support). Further unless someone downsizes to a cheaper area of the country the increase in house price does not help if someone where to move to a area similar in price. As for the idea of unearned vs earned income, in countries such as portugal where ‘investment income’ is a flat 28% (i think) around up to 50% for earned it would be easy to argue that point. But in this country once ‘unearned’ income goes in the 40p rate the difference is marginal at 2%. I would argue the goverment of w.e party should help those who won’t have the asistance of ‘mom and dad’ but who don’t clobber to much makes them even need help possibly. I would suggest making IHT based on the number of recipients which would encourage equality and not concentration of wealth(thats what most of europe is like). Pensions being able to be passed on tax free was a bigger giveaway than the main residence allowance in my view As for the argument it makes leaving the work force more likely unless you have a truly confiscationary regime (which the super rich would find ways out of) but even if they did pay it would still be possible for the super rich to not ‘work’ such as say a pop star net worth of !00 mil even taxed at 90% would be left 10 mil to hand on.

  • Philip Rolle 27th Apr '17 - 11:14pm

    I also think we must have a health and social care tax. But I wanted it to look more like NI than IT. People must get an entitlement that they can sue for in return for their “premium”. Operation cancelled? The person would be entitled to two years’ premium back as a minimum and could also claim any loss or injury arising. Of course, there will be the usual criticisms of insurance. Tough. The time has come to bite the bullet.

  • Matthew Huntbach 28th Apr '17 - 8:09am

    Sam

    I would say address the reason for high house price inflation rather than combat the symptom which is for many many years we have not build anywhere near enough homes

    And where are we to build them? Sure, everyone says this, but almost any plan to build more houses gets opposition. I know this from being a councillor sitting on a planning committee – what might seem to be a bit of scrap land that could easily be used gets defended as an essential piece of green space by the locals, and if you agree to planning permission for building on it (in many cases you have no choice because planning permission can only be denied if there are legal reasons to do so) they throw abuse at you and accuse you of having been bribed by the developers.

    In addition, how do you ensure that when new houses are built they go to those who most need them rather than those who just want bigger or more housing? There will always be a demand for more housing, because we’d all like to live in a country mansion with a city centre pad as well and … well, then there really isn’t the land, is there? The reality is that a great deal of new building now goes to people who don’t actually need it. The extreme examples are where it is sold to people who just hold it empty as an investment. But even modest builds, what I notice is that when completed one month you see the “For Sale” signs, next month the “To Let” signs. That is, those who don’t need them but have the money to pay for them can afford to pay more in this way, and so they buy them to let them out at a profit to those who do need the and were squeezed out in this way. I was talking to my mother the other day, who lives in small town Sussex where I grew up, and she was telling me almost all the new build there is big houses to sell to wealthy people moving in to the area, and nothing for poorer locals who are being squeezed out.

  • Matthew Huntbach 28th Apr '17 - 8:23am

    Sam

    Further unless someone downsizes to a cheaper area of the country the increase in house price does not help if someone where to move to a area similar in price.

    Sure, but that’s precisely the point I’m making about house prices pushing up house prices. If everyone buying a house is someone who already has the money from a house (either moving house or inherited) then house prices will be H+X where X is what they can afford from their own income and H is an arbitrary huge amount.

    We talk about the “housing ladder” but really that’s a conveyor belt, pushing money up to those at the top who are the only ones really making money out of it.

  • Matthew Huntbach 28th Apr '17 - 8:37am

    Peter Martin

    So the upshot of all this, for the NHS, is that NI and taxes may not have to be raised to provide a better service.

    Well, that’s the Corbyn line and the Trump line, isn’t it? Just talk about lots of government spending and/or lots of tax cuts, don’t bother about trying to balance the two, as it’s not necessary. So why have taxes at all?

    To be sure, there are aspects of this which need to be taken into account, and aren’t: government spending on more public service jobs leads to more income tax coming in. Part of the problem with our economy is that it’s been the other way round: cuts have resulted in less money coming in that way. Many of the cuts made by governments over the years have had long term higher cost effects, such as cuts in training which means more expense in having to hire staff from agencies, a big feature in the NHS. We are in a dangerous downward spiral in this way. I observed this in local government, so many dangerous long-term expensive cuts having to be made, but what can you do when national government imposes a budget limitation on you and says “it’s up to you to make the cuts”.

    However, my feeling is that to reverse this we need big tax increases, in order to jump start the reverse. I would hope it would work positively after that, and we could then see gradual tax deductions. That’s the line that’s hard to sell.

  • The role of taxes is not just to raise revenue, but encourage or enhance ‘good’ behaviour, and discourage the ‘bad’, or activity which acts against the aims of the country as a whole.

    So, putting aside employee NI, I’ve often thought that employers national insurance should be heavily modified, so as to be negative (i.e. an allowance, off-settable against the total employer NI bill, corporation tax, or even VAT, for small businesses) at low incomes – perhaps for salaries below the ‘national living wage’ rate.

    Above this, is should rise, through the current rates, and with no cap, to 100% and above. For the companies with the CEO cohort on hundreds of thousands of pounds in “earnings”, possibly more, The companies paying these salaries would then also have an NI tax bill of a similar or even larger amount.

    As I see it, the effect would be to encourage employment (surely a social good), and act to level out the wage differentials between the top and bottom pay scales in an organization (which I strongly believe to be be another social good).

  • Katerina Porter 28th Apr '17 - 1:03pm

    We should be backing the NHS Reinstatement Bill which is somewhere going through Parliament. The 2012 Act which changed the whole basis of the NHS introduced much higher administrative costs, from 3/4% of budget for decades after 1948, to 14%, and I have seen figures as high as 30/40%. Commissioning in the present way means great costs throughout the competition process. Virgin has a very strong legal department to deal with NHS contract problems, for instance, and this has to be paid for in some way or other, ending up with us taxpayers.
    We were complicit in the 2012 bill, which may account for Norman Lamb not mentioning its problems. At some point somebody should investigate the financial and quality
    results of outsourcing, which have been a success and which have not.

  • Matthew Huntbach 28th Apr '17 - 2:28pm

    TonyH

    The role of taxes is not just to raise revenue, but encourage or enhance ‘good’ behaviour, and discourage the ‘bad’, or activity which acts against the aims of the country as a whole

    Ok, but a big problem is that discussion on taxation and discussion on government services tends to take place as if they are separate and unrelated issues. Look at your typical Labour leaflet. Chances are it will be going on and on about Tory cuts, but does it say anything about what higher taxes Labour will bring in if it really wants to reverse those cuts? No. See how Labour denounced us on tuition fees. But did they give any coherent alternative as to how they would continue paying for universities? No.

    So, people moan about cuts, but then when the Tories denounce any proposals for tax increases, people don’t put the two issues together, and they accept what the Tories say. The impression is given that ALL that taxes are about is to encourage or enhance ‘good’ behaviour, and discourage the ‘bad’. As consequence, if you propose raising taxes, which inevitably will take more from wealthy than from poor people, you are painted as someone who just wants to punish people for making money. If you propose increasing inheritance tax, you are painted as someone who just wants to punish someone for saving money and buying a home rather than squandering it, and so on.

    That is why those who go on about cuts, but don’t mention how really to reverse them (i.e. Labour and most of the left), are just aiding the Tories, because by failing to give the full reality, they are making it impossible to do something about it. I was at a public meeting the other day, with the usual bunch of lefties outside protesting about cuts. I asked one of them “Ok, so what taxes would you raise to reverse them?”. He looked at me with a sort of “duh, dunno” look, and eventually replied “I’m not a politician, that’s up to them”. Well, lefties, that’s why you lose and the Tories win. Because you can’t talk about numerate reality, the Tories get away with their claims that anyone who proposes tax increases is just being vindictive and is a nasty person.

  • Matthew Huntbach 28th Apr '17 - 2:47pm

    Katerina Porter

    The 2012 Act which changed the whole basis of the NHS introduced much higher administrative costs, from 3/4% of budget for decades after 1948, to 14%, and I have seen figures as high as 30/40%.

    Yuppo, that’s the Tories for you, that’s the line they (and their Orange Booker friends) still keep pushing – the answer to the question about how would you raise more money is that you introduce competition and it will bring costs down. That and the line that there’s plenty of unnecessary administrative bureaucracy in public services that can easily be cut.

    Well, this line has been the dominant one in politics for nearly 40 years now, so might we just think that we’ve had enough time to see if it works, and it hasn’t? To cut bureaucracy they’ve introduced much more of it. Much of what’s called the “finance industry” is just private sector bureaucracy, layer upon layer of it, all taking hefty payment. Isn’t the old line “Public sector bad, private sector good, baaaah baaah” just a bit outdated now?

    If it really were the case that competition is the magic wand to wave and solve all the problems, wouldn’t we see the costs of private education and private health going down? After all, they are a direct market. Yet the costs of them are actually rising rapidly.

    Maybe these ideas were fresh and new and worth trying back in the 1980s. But aren’t we now somewhat like the position eastern Europe was in back then? Forty years of soviet-style communism pushed as the dominant ideology, and rather obviously it wasn’t working.

    We’ve had nearly forty years of Thatcherite economics as the dominant political ideology. Isn’t voting Tory now a bit like supporting the Communist Party in the 1980s in places like East Germany?

  • @ Sam
    “I would say address the reason for high house price inflation rather than combat the symptom which is for many many years we have not build anywhere near enough homes”

    @ Matthew Huntbach
    “The reality is that a great deal of new building now goes to people who don’t actually need it. The extreme examples are where it is sold to people who just hold it empty as an investment. But even modest builds, … That is, those who don’t need them but have the money to pay for them can afford to pay more in this way, and so they buy them to let them out at a profit to those who do need the and were squeezed out in this way.”

    Demand and supply affect house prices, so if 1.5 million new homes were built in the next 5 years this should decrease the pressure on house prices. If there were more homes than people wanting them house prices would decrease and so would rents.

    We should increase the tax on empty homes. My Borough Council charges an extra 50% Council Tax on unfurnished homes that are unoccupied for more than two years. I assume it would be possible to increase this further after say three years and apply such charges to “second homes”.

    I think liberals are generally in favour of people owning property and being free to pass it on as they wish when they die. It is huge amounts of wealth that they find problematic as it usually comes with increased power. I am not generally in favour of large increases to inheritance tax. However maybe a major reform would be better, so that it is payable by those who inherit the assets, no tax on the first £200,000 received, 32% on the next £200,000, 40% on the next £250,000, 50% on the next £250,000 and 60% on everything over £900,000. So if some inherits £1 million they would only receive £651,000, if £2 million they would receive £1.051 million (52.55%).

  • Jayne Mansfield 28th Apr '17 - 6:19pm

    @Katerina Porter.
    Well said Katerina.

  • Michelle Jacob 29th Apr '17 - 6:29pm

    No, as a Liberal nation we shouldn’t raise or even have an inheritance tax.
    https://conversableeconomist.blogspot.dk/2015/04/why-did-sweden-of-all-places-abolish.html
    We should instead raise real estate taxes, or bring forth a land value tax instead.

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