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Dale the Economist: A Few Data Cells Short of a Theory
Iain Dale has been so keen to pounce on Labour's tax plans today that he has missed the smart money analysis.
He offers quotes from Gordon in 1995 and 1996 that are looking a bit minty and after a ten year silence (or a humngous gap in Iain's research?) some more recent quotes from Labour.
All are pretty much on the money. Unlike Mr Dale. Inheritance Tax on 6% of estates ought not to be much of an issue electorally. That is pretty much all the quotes have said. Spending on universal services was and is more important than helping the richest 6% of society escape tax. Fair enough.
But thanks to the one substantive policy announcement, that Tories used to stave off an election they feared worse than death, we now know that as many as 75% of the electorate have the impression that Ineritance Tax is an issue they need to worry about. So something would have to be done about the impression, the perception at least, by any listening government. Surely?
You will also find I think that the broad population will be relaxing about inheritance tax even as we tap our words into our blogs.
Even though the real world has hardly changed. Accountants and lawyers of a tax planning persuasion may however be cursing Mr Darling and his cleverness. Because a tax avoidance stunt they've been able to pull - for say £200 to £500 an hour - is now free and gratis as a right to all who may need it.
Stopping Two Billion short of the proposed (but unfunded) Tory Giveaway to all but the very richest in society is an excellent way of restoring just a little clear blue water. Spending that money on health screening for all and better Education for all is again a significant move that impresses political difference.
When Iain Dale and others have read the small print themselves and/or read the large print of others that have read it that will realise that the Capital Gains announcement might turn out to be far more important.
I've not read the small print on that yet myself. It could help all sorts of strange bedfellows but it will I think pain some small and medium long haul businesses.
UPDATE: Follow this link to Olly's Onions and onwards to the BBC and you'll find the BBC haven't really read the small print either. Or perhaps they've decided they prefer EconoDale's version.
I'll spit it out:
THIS TAX BREAK WAS ALREADY AVAILABLE TO RICH COUPLES WITH FANCY ACCOUNTANTS, NOW AVAILABLE TO RICH COUPLES WITHOUT TOO. UP TO £600,000 EQUITY/ESTATE CAN BE BEQUEATHED WITHOUT TAX. AS IT ALREADY COULD BE IN MANY CASES. BUT NOW 75% OF ELECTORATE DO NOT BELIEVE THEY WILL BE CLOBBERED.
5 comments:
greetings
on the same topic:
http://ollysonions.blogspot.com/2007/10/poverty-eradicated-in-kensington-and.html
I'd have preferred it if Darling had waited a year to see if we could win the argument and convince that elusive 75% that they had nothing to worry about. It's not as if there's going to be an election any time soon (superb prediction BTW, I got it completely wrong myself), and £1 billion can buy an awful lot of doctors, nurses and the like.
It is you who is illiterate. IHT affects 37 per cent of houses in this country. The 6 per cent figure refers to those affected each year because they die.
Iain, the 37% figure is from Scottish Widows, a company with a vested interest in selling financial products to evade inheritance tax. I'm, pretty sure they've made some dodgy use of statistics, but I don't have time to dig into that right now.
Anyway, even if the 37% figure rings true, it assumes that those living in houses worth over 300K have no debts on them, have no intention of unlocking any of the capital in their homes while living on their pension and intend to stay in those houses rather than downsize once the kids move out.
Hence the huge disparity between the quoted 37% figures and the actual 6-7% figure of people actually caught by the tax.
Of course the actual facts have not stopped the population of the UK, the Conservative party and to a lesser extent the Labour party being taken for a gigantic ride by the combined forces of the Daily Express, the Daily Mail and the financial services industry intent on scaremongering to make a quick buck.
Well said Andreas
I didn't say you were illiterate Iain I said you were no economist. This was the latest in a series of economics posts that prove that.
The fact you later linked to Dizzy who had worked this out - sadly not five minutes after the announcement as in my case - was almost like a climb down. But not quite.
Back to Andreas - in effect Darling is waiting. Just tidying up the current code so that all married and pseudo married couples can get the benefit - and widows and widowers - rather than just those with the spare cash to employ tax avoidance people.
This is not as Dizzy suggests something that goes without saying if you have equity in assets in the range for the tax. It is not at all difficult to be asset rich and cash poor. Also to think that tax avoidance accountants are not for you.
So this is not a splurge on the rich it is in effect an announcement to the 75% that while they are very astute and right to be concerned about the well being of their families the cycnical, lying, scumbag, Bullingdon opposition spokesman was deliberately hoodwinking them for electoral gain.
And just a thought ... were the Tories planning for £1 million plus £1 million?
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