Madsen featured on the Radio 4 programme "Iconoclasts" last night (the repeat broadcast is on Saturday August 20th). Julian Le Grand, LSE Professor of Social Policy and one of the thinkers behind New Labour, was arguing the case for Inheritance Tax to promote equality of opportunity. He wanted the money raised from it to be set aside to fund ‘baby bonds’ with£3,000 for every child.
Madsen took the view that opportunity is more important than equality. He pointed to the benign effect of inherited wealth in encouraging parents to create wealth to give their children more opportunities in life than they had themselves. He said that the death tax can destroy businesses and dissipate the pools of capital available for investment in the new businesses that generate economic growth and so many of the new jobs. Family businesses, built up and passed down through the generations, were a vital part of the economy.
‘Baby bonds’ themselves were a good idea, said Madsen, but should not be financed by government from death duties. Instead the tax laws should be changed so that parents, grandparents and other relatives could pay tax-sheltered funds into the child’s account to help boost its future opportunities.
The many e-mails that came in to the programme showed how many people regard the death tax as unfair and unacceptable.