We do think this is most, most, impressive from Tax Justice UK

We know they’re eager to have a wealth tax and they want one despite all the serious people telling ‘em it’s a nonsense. This is not about the viability, nor even desirability, of such a tax. We do though think that this piece of evidence they’re calling upon is just so sweet, so wondrous:

Both the design and the communications of any reforms to this tax must focus on truly large dynastic wealth – by reforming the sorts of trusts that allowed the previous Duke of Westminster to pass on £9bn to his son without paying inheritance tax – rather than the modest wealth of ordinary families, otherwise it risks a huge political fallout.

For here is the taxation of that estate:

The UK resident trusts are liable to pay all applicable taxes including income tax, capital gains tax and inheritance tax (IHT).

With regards to the latter, instead of a payment of 40% inheritance tax upon death, the majority of the trusts pay a recurring rate of 6% every 10 years – the same that is levied on all UK trusts of their type. This means that over a full lifetime, the trusts will pay this tax many times over, with the added advantage to the UK Exchequer of its regular, effectively in-advance payment schedule.

So the argument is that we must have a repeating tax upon the stock of wealth and our example of proof that this is necessary is the tax dodging by someone paying a repeating tax upon the stock of wealth. We could understand - even if still disagree with - the argument that as domestic trusts pay a wealth tax this idea of a wealth tax should be extended. But that isn’t the use at all - they really are insisting that as trusts are not paying tax by being subject to a wealth tax therefore we should have more of a wealth tax. To, you know, ensure that property pays a wealth tax.

Ah well, an organisation founded by Richard Murphy always was going to have problems with difficult things like facts, logic and so on….

Tim Worstall