What caught my eye this week.
Having made a case for higher inheritance taxes (IHT) in the past, I could have warned Abi Wilkinson to ask for danger money and a safe house when she wrote her piece for The Guardian this week.
Morally speaking, people who stand to inherit large sums haven’t done anything to earn that money.
An accident of birth placed them in a comparatively wealthy family and they’ve benefited from that their whole life.
This is the argument I make, too. People immediately start with straw man retorts – “Oh, so should rich children also not be allowed private tutors then?” or “Oh, so should rich children also be forced to live on Pot Noodles and never see a vegetable then?”
But I think that’s because in a world where we’ve decided to have a State and to fund that State with taxes, you have to go absurd pretty quickly to justify generous rates and reliefs for people who are (a) dead or (b) who did nothing to earn the money you are taxing.
These are taxes, remember, that rich kids not paying mean someone else has to pay. Maybe me or you? Maybe your kids, from their squeezed wages.
I understand – and was reminded by some of the nearly 2,000 comments on Wilkinson’s piece – that critics of inheritance tax (i.e. almost everyone) don’t see it that way.
They see 100% IHT as the State taking money from hard-working people who did the right thing and worked and saved all their lives and who are now being taxed twice. And they see the State giving it to indolent dossers via welfare and other benefits. (I paraphrase.)
Whereas I am full of admiration for people who work hard and save all their lives, but I see them as irrelevant once they’re dead. I see their children getting a freebie for doing absolutely nothing, on top of the other benefits having better-off parents gave them. And I see the victims not as the dead person in the grave, but rather the everyday people on minimum wages – or heck, the middle-class JAMs – who have to more tax on their incomes so that rich kids can get more money for free.
I’d tax inheritance at say 75% just because it’s the most moral tax. But I understand many of you feel differently.
Even my mum does – and I regularly urge her to spend the lot!
Five reasons why you’ll love index investing – Monevator
Do you have a money mind? – Monevator
From the archive-ator: Have you seen our huge link list of money tools and calculators?
Note: Some links are Google search results – in PC/desktop view these enable you to click through to read the piece without being a paid subscriber.1
Report finds UK housing market still reeling a decade after the financial crisis – Guardian
Crackdown on (crazily) unfair leasehold practices confirmed – UK Gov
Santander cuts back lending amid Bank of England concerns over consumer debt – Guardian
The great rotation from bonds to stocks might finally be at hand – Bloomberg
Can you afford to live to 100? [Search result] – FT
Products and services
Some tracker funds cost ten times more than rivals [Search result] – FT
Charter Savings Bank’s new table-topping cash ISAs pay up to 2.15% – ThisIsMoney
LendInvest’s five-year bond pays 5.25% but definitely comes with risks – ThisIsMoney
‘Insta-bragging’ could invalidate your home insurance – Telegraph
Extra-long mortgages push up the age of borrowers [Search result] – FT
Comment and opinion
Shame, status, and the American Dream – Bason Asset Management
Alan Shearer has much to teach us about inflation – The Value Perspective
Fund mismanagement – SexHealthMoneyDeath
What’s really putting the brakes on the UK housing market? [Search result] – FT
Too much enthusiasm in the markets: Howard Marks’ latest memo – Oaktree Capital
Financially independent at 43 and roaming Europe in a motorhome – The Escape Artist
‘Disgusting and astonishing’: how do the UK’s top 1% view tax avoidance? – Guardian
The FTSE 100 has inched up towards fair value – UK Value Investor
Thought provoking interview with economist and Nobel laureate Myron Scholes – UBS
Why banks could prosper in the next stock market slump – Telegraph
Are solar funds paying 6% too good to be true? – Telegraph
The worst landlord horror story [US but interesting] – Financial Samurai
‘A bit of me is dying. But I can’t stay’: the EU nationals exiting Britain – Guardian
A British negotiator says Brexit will be far worse than anyone expects – Independent
Off our beat
Why interviewing prospective new employees is futile – Medium
“The word ‘risk’ derives from the early Italian risicare, which means ‘to dare’. In this sense, risk is a choice rather than a fate. The actions we dare to take, which depend on how free we are to make choices, are what the story of risk is all about. And that story helps define what it means to be a human being.”
– Peter Bernstein, Against The Gods: The Remarkable Story of Risk
Like these links? Subscribe to get them every Friday!
- Note some articles can only be accessed through the search results if you’re using PC/desktop view (from mobile/tablet view they bring up the firewall/subscription page). To circumvent, switch your mobile browser to use the desktop view. On Chrome for Android: press the menu button followed by “Request Desktop Site”. [↩]
Offer: Head to RateSetter to earn higher interest – and a £50 sign-up bonus – or learn more about this offer. Remember investing money with P2P lenders like RateSetter or Zopa involves more risk than with cash savings.