Tuesday, 21 August 2007

Pre-Holiday Rant

Off on holiday to take James to the land of his fathers (Ulster).

No posting until September.

So let me just get this off my chest.

John Redwood, in the process of defending his proposals for abolishing inheritance tax (hurrah!) argued that he wants to "tax the rich more as well." What he meant was: free people from silly taxes which disincentivise productivity (like inheritance tax), let them produce more wealth, and then of course they will pay more income tax.

Whatever one thinks of the detail, why the nasty rhetoric. Modern political consensus is that the rich must be bled dry. Why? Do they receive a higher level of service for their greater contribution? No. Do they receive thanks and the plaudits of society for their generous (enforced) giving? No. Do they have a covenantal/familial duty to provide for the rest of the population of their nation-state? No.

Two possibilities:

  1. Christians read 1 Tim 6:18 and wrongly arrogate that to the state. No. If the rich are miserly and trust in their wealth, God will call them to account. Not every sin is a crime.
  2. The politics of envy. You're rich, I'm not. It's not fair (Rubbish. It's not equal - equality and fairness are not the same thing). You must have come by your wealth by some shady means. You must be punished for being rich.

Neither is right. So, politicians, lay off the wealth-producing, job-creating, service-providing, non-welfare-dependent rich for a bit, why don't you?


Pete said...

I agree.

Enjoy Ulster.

ros said...

But getting rid of that iniquitous inheritance tax must surely be a good thing?

Michael Dormandy said...

Asking the rich to provide for the poor through the taxation system is in everyone's interests long-term. It means everyone has access to better health, education, transport etc and breeds better social contentment and unity.
I suspect the majority of those at both extremes of the wealth spectrum are there mainly because of factors connected to their social, family or educational background, rather than because they were particularly lazy or hard-working. Therefore it is laudable of the state to address social inequality and the difficulties of social mobility by taxing the rich to subsidise health, edication and other serives for the poor.

I also hope you enjoy Ulster and praise God that our unity through the Cross is far greater than the political isues that divide us.

Reuben said...

Right with you.
I've just returned from the land of the red hand and the blue sky - James won't be disappointed.

ros said...

Asking the rich to provide for the poor through the taxation system is in everyone's interests long-term.

Not so. Maybe in the medium term. But once all motivation is lost to work harder to earn more money to be used for 'everyone's benefit', the general trend will be downward for all. See, e.g., the USSR. It certainly didn't breed better social contentment there. Unless by contentment you mean oppression to the point where no one has the will to retaliate.

There are certainly some things where there may be economies of scale and other benefits from pooling resources - health, defence etc. Though the former can be achieved by health insurance (and yes, I pay $200 a month for this at the moment).

No one (as far as I can see) is suggesting we do away with taxation entirely, nor that the principal of taxing the rich proportionately more is fair. I am suggesting that it is profoundly unfair to tax people twice - during their lifetime and on their death. It shows a deep anti-family spirit and an anti-biblical understanding of property.

Michael Dormandy said...

Thanks to Ros for her thoughtful response to my post.
To focus on the issue of death duties specifically rather than the merits of tax and spend economics in general:
Why does it show an anti-biblical understanding of family and property to tax inherited estates? If we accept that governments have a right to tax the rich proportionately more than the por, then surely it's up to the government how and when this tax is collected. I see no particular problem with taxing legacies, since, for the people who receive them, they are one-offs which are presumably either saved or not spent on essentials. It seems reasonable therefore for them to be taxed. Although this may give the appearance of the deceased being taxed twice, it's surely more accurate to say that the recipient of the legacy pays the death duty, since, if there was no tax, he and not the deceased would benefit. He is only taxed once for the money received in the legacy, since he did not pay income tax on it. A single some of money is owned by two different people and each pays tax on it, just as happens when a boss pays an employee and the employee then buys a TV, both the employee's salary and the TV manufacturer's salary will be taxed. How is this anti-family or unbiblical?

Michael Dormandy said...

On the more general issue of the rich providing for the poor through taxation:
A fundamental problem with UK society is the difficulty of moving through social and economic classes. The socially, economically and educationally deprived are likely to stay that way.

This has the unfortunate consequences of disenfranchising such deprived people and denying our soicety the talent they would bring to it if allowed to do so. More importantly, no human being, made in God's image, deserves to be kept at the bottom of the social, economic and educational ladder by forces beyond their control. I have met people in this position and it is tragic, especially when compared to people who rest at the top of that ladder, because the inherent difficulty of mobility up or down it compensates for their natural propensity to fall down several rungs.

Any realistic solution to this problem will have to include (though of course not be limited to) taxing the rich to provide better health care, training, education etc for the poor. This will have precisely the reverse effect of the Soviet communism ros appears to fear, because it will replace much of the plutocratic elements in society with more meritocratic ones. This means both rich and poor will work hard for their own increasing prosperity rather than at present, when those with inherited advantages rest on their laurels, whilst those without become disillusioned and give up trying.
Thanks to Ros and Neil for the opportunity this gives me to think through these issues more clearly.

Neil Jeffers said...

I can see I'm going to have to say more on this.

Very busy until the end of October planning a holiday club. When I have time I will post on equality vs justice (vital first step), and then a theology of state taxation.

In the meantime, let us note the immensely positive view the Bible has of inter-generational provision within the family. This includes leaving an inheritance for your children:

Prov 13:22. A good man leaves an inheritance to his children's children, but the sinner's wealth is laid up for the righteous.

Let me also lay some provocative bait for my future posts: redistribution of wealth is NEVER a biblical/Christian aim of state taxation. More to come...

Michael Dormandy said...

Hi Neil,
Thanks for some debate on an interesting and important issue. I won't comment on your last sentence until you clarify it.

However, I have never argued against inter-generational provision. Redistributive taxation enables, rather than undermines, helping ones family. The proverb you quote speaks of passing down ones inheritance. In crude terms, a redistributive tax policy makes those who have far more "inheritance" than their children could ever want or need share some of it with those who have nothing to pass on to their children. I am not an expert on the historical context of Proverbs, but I suspect it was written to a society with a significantly smaller rich/poor gap than ours, without mass uneployment, so it can assume everyone can provide for their children without state help.

I am not an expert on Leviticus either, but it may be possible to argue Lev 23:22 is the equivalent of a redistributive tax in an agrarian economy, which thus provides Biblical support for the policy.

It is also surely unjut for children to have bear for life the scars inflicted by parents who do not provide for them, when they could be helped by taxing the rich. The scandalously low numbers of children in care achieving high levels of education should surely drive Christians, who are to defend the cause of the widow and orphan, to argue for increased state provision for such children.

No worries if reply takes a while because of holiday club, I pray it goes well.

dave williams said...

Neil I guess it depends how you are looking at things! If you are looking for a regulative approach -before I pay taxes I must have line and verse on what they must be from scripture then...no.

We must look more at what the implications are of living in a secular state. Are states permitted to collect taxes yes or no? Are they within that remit permitted to determine what the taxes are for. Taxes historically weren't about law and order, protection of the realm etc and society so lets not pretend there was a great and good day when there was a thatcherite version of the social contract.

The old Conservative in me agrees with Ros don't tax people twice (priority then on pensions, VAT etc) the bit of me that has seen the majority of people inheriting their wealth and then wittering on about inheritance tax says bleed them dry and make them start from scratch and learn to provide for themselves. Maybe Chrristians should leave everything in their wills to their churches -if your kids haven't made good with what you provided for them in life all the better. And like the incest laws it would stop anyone wishing their folks dead!