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Thread: Inheritance Tax?

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    Politics.ie Member TradCat's Avatar
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    Default Inheritance Tax?

    542,544 is the amount a son or daughter can inherit without paying any tax. If we reduced that to 20,000 which would allow for keepsakes rings etc but not the family home would we not take care of a lot of problems at once.

    We would get people spending on the basis that the more you spend now the less tax you pay on death.

    Inequality would be reduced.

    It would mean a significant rise in the tax take with no disincentive to work.

    It would effectively be a property tax.

    So why is it not mentioned as an option? Is their a good case against it?

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    Politics.ie Member Chrisco's Avatar
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    IHT has to be viewed as low-hanging fruit and I would be astonished if it isn't tampered with in the budget.

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    You'll get plenty of support for your idea but i think its nonesense. The money being passed to a son/daughter has already been taxed.

    There will be more than enough taxes on the income of ordinary workers or the better off for that matter in this country. Marginal rates already approaching 60%. Surely the state takes enough?

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    The unfair exemptions to this tax for farmers and business owners should be removed before rates and thresholds are altered.

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    Quote Originally Posted by grafter1 View Post
    You'll get plenty of support for your idea but i think its nonesense. The money being passed to a son/daughter has already been taxed.
    What if the choice is having your estate taxed when you die or paying 10% extra income tax now?

    In general, inheriatance tax is not a bad one to look at if money is needed. Aside from the OP's points about not disincentivising work and reducing inequality, money raised through inheritance tax isn't as likely to be money taken out of the economy.

    Increase income tax and you reduce spending.

    Increase inheritance tax and you are usually taxing money that wasn't going to be spent anyway.

    It can also be keep money in the state when it was destined for descendants in the US, Australia or Britain.
    Economic Left/Right: -2.88 (down 3.63 since the financial crash)
    Social Libertarian/Authoritarian: -5.18

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    Is there any estimates of the revenue that such a move would make, or are people mooting this purely because of the social desirability of redistributing wealth?

    Any idea what impact a tax bill of 25% of the value of a family business would have on that business upon accession, especially the impact it might have on any non-family employees of such a business?

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    The reason this won't happen is because it effects people who vote, the old and the nearly old, most of all. Politicians don't do the right thing, they do the thing that will most likely get the elected next time.

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    Politics.ie Member Chrisco's Avatar
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    Quote Originally Posted by hurling_lad View Post
    Is there any estimates of the revenue that such a move would make, or are people mooting this purely because of the social desirability of redistributing wealth?

    Any idea what impact a tax bill of 25% of the value of a family business would have on that business upon accession, especially the impact it might have on any non-family employees of such a business?
    Nothing to say that productive and non-productive assets can't be dealt with separately.

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    Quote Originally Posted by hurling_lad View Post
    Any idea what impact a tax bill of 25% of the value of a family business would have on that business upon accession, especially the impact it might have on any non-family employees of such a business?
    The owner would have to use other resources, a loan or sell some or all of the business to pay the tax bill. So what?

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    Quote Originally Posted by Nermal View Post
    The owner would have to use other resources, a loan or sell some or all of the business to pay the tax bill. So what?
    Imposing a debt burden of 25% of their value on small businesses would be likely to result in job losses - many businesses would likely even be wound up.

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