Child Benefit Changes

[Pot noodles for everyone]

They shouldn't but it should be my choice not the governments to prevent it. It's a tad difficult to pass over bricks and mortar or fine art in dribs and drabs.

Exactly. One of the reasons why it is an unfair tax because it's a tax on capital assets.

It's also unfair because the point at which gifts are deemed to be fair game for taxation. Seems a bit arbitrary to tell people that they have to pay tax on gifts from their parents when the parents die but not before. And what's with this idea that children didn't earn it therefore don't deserve it? In which case, I propose a tax on all gifts.Set punitive taxes on children's toys and sweets aimed at children. As the kids get older we set higher taxes for money given to children for things such as cars, deposits for houses, jewellery, that sort of thing.

If it's morally wrong to give gifts tax-free to children after you die then why is it not morally wrong to do so before you die?

Defence of inheritance tax is always ill-thought out proto-Marxist, claptrap.

 

[BLOCK F]

Simster,it is a huge political gamble for any party to take.I hope it works,but it will no doubt be messy.I agree with the principle and the poverty trap is a very real situation for many bods.I think it is worth a go,but on a general note,I do not know where all the extra jobs are going to come from for what will be a largely unskilled workforce.

 

[Gwylan]

Defence of inheritance tax is always ill-thought out proto-Marxist, claptrap.

Hmm...read an interview today with Will Hutton (ex chief executive and current vice-chair of pro-business think tank The Work Foundation) who proposes an increase in inheritance tax as a means of solving some of the UK's problems.

He's a fervent supporter of capitalism and long way from being a proto-Marxist (whatever that means) or indeed any supporter of Marxism. His argument is that capitalism is the best system that we have but it has to be made better to function more efficiently.

Personally, I see nothing wrong with inheritance tax. It's not as if people are being prevented from leaving assets to their kids - isn't £350K or £400k tax-free? That's a nice little nest egg.

 

[Westdene Seagull]

Your argument is very flimsy, IMO. So now you're saying your kids shouldn't inherit all of your hard earned money, yet you don't want the taxman taking his cut. So what would you do with it then?

I thought your argument was that you didn't want it going to chavs? Now it seems to be about choice.

I didn't say that - I said they shouldn't EXPECT it. I might choose to liquidate my assets and spend it on beer, drugs and women.

What is so wrong is that it taxes what has already been well taxed and it encourages people to spend rather than save. I would much rather that the rewards of my hard work went to my family than government.

Ironically, if you spend every penny you ever have you can then get government handouts - how very sensible of the government to encourage this.

 

[El Presidente]

The tax is anti-saving and those that support it are only envious of those that have either been lucky or worked their arses off.

I would support a single point of tax - the tax on income. Scrap VAT, road tax etc and just raise the income tax bands accordingly.

That would encourage the black economy though. VAT raises as much money as income tax, so if you scrapped VAT, road duty etc, then the basic rate of tax would have to be raised to about 55% from the current 31% (I assume you would scrap NI too on the same basis as VAT), and presumably for higher rate payers, many of whom would emigrate or claim non-dom status, it would have to be about 65-70%.

Can you see any party being elected on that basis?

As for IHT, you are advocating paying more tax now and none from your estate. Personally I would rather pay less tax now, but it comes down to choices. All we're arguing about is how to slice the cake folks, but the cake ain't going to get any bigger unless the economy grows.

 

[El Presidente]

Ironically, if you spend every penny you ever have you can then get government handouts.

True, but have you seen how many pensioners struggle to survive on the state pension? it's not living, it's existence.

 

[janee]

Couple of points that i don't think have come up (although this thread is long!)

Child benefit is a benefit to encourage people to have children - as we are an ageing society this is essential in the future because we need to pay for our ageing society.

Child benefit is universal because often men (even the high earning ones) only give non working mums a pittance to cover the costs of children.

 

[Pot noodles for everyone]

Hmm...read an interview today with Will Hutton (ex chief executive and current vice-chair of pro-business think tank The Work Foundation) who proposes an increase in inheritance tax as a means of solving some of the UK's problems.

He's a fervent supporter of capitalism and long way from being a proto-Marxist (whatever that means) or indeed any supporter of Marxism. His argument is that capitalism is the best system that we have but it has to be made better to function more efficiently.

Personally, I see nothing wrong with inheritance tax. It's not as if people are being prevented from leaving assets to their kids - isn't £350K or £400k tax-free? That's a nice little nest egg.

He is not a fervent supporter of capitalism. He is a supporter of a semi free-market economy with heavy government control and intervention. This was laid out in his 'The State We're In'. That's what he proposes when you say that he thinks 'capitalism is the best system that we have but it has to be made better to function more efficiently'. He's also the Observer editor and a big critic of most of most models of capitalism and parties that support laissez faire/free market/capitalist approaches.

It's generally accepted across the political classes that he is left of centre. He was the one (I think) who wrote the Guardian's editorial that caused so much stir when they urged readers to support the Lib Dems. The fact that he proposes increasing inheritance tax does not surprise me. To hold him up as some sort of cheerleader for capitalism is not a good example.

 

[Simster]

Exactly. One of the reasons why it is an unfair tax because it's a tax on capital assets.

It's also unfair because the point at which gifts are deemed to be fair game for taxation. Seems a bit arbitrary to tell people that they have to pay tax on gifts from their parents when the parents die but not before.

How is that "arbitrary"? I'd have said it was actually very clear. If you have a house worth £500k, you're going to need to live in it until you die. Once you die, you don't need it any more. That's not at all arbitrary. And lets be clear, when you do die your kids are still going to realise approx £400k of money they haven't earned themselves. I don't see the issue.

And what's with this idea that children didn't earn it therefore don't deserve it? In which case, I propose a tax on all gifts.Set punitive taxes on children's toys and sweets aimed at children. As the kids get older we set higher taxes for money given to children for things such as cars, deposits for houses, jewellery, that sort of thing.

If it's morally wrong to give gifts tax-free to children after you die then why is it not morally wrong to do so before you die?

I'd be fine with that. Let's tax every gift to kids over the value of the inheritance tax threshold. In fact, just rename it a "gift tax" if you like, which is also payable on assets when you die.

Defence of inheritance tax is always ill-thought out proto-Marxist, claptrap.

Not really, no. I'd be curious to know what other countries operate. Oh wait, look here:

Inheritance Tax in Other Countries - Inheritance Issues (UK)

It seems that Marxist economies like Canada, the US, Bermuda and most European nations apply a similar tax.

 

[Pot noodles for everyone]

Child benefit is universal because often men (even the high earning ones) only give non working mums a pittance to cover the costs of children.

That should not be a justification for universal benefit.

A flip-side to that statement is also that 100% of child benefit goes to the parent who receives child maintenance, irrespective of how much time the child spends with both parents. I believe that is unfair.

 

[Pot noodles for everyone]

How is that "arbitrary"? I'd have said it was actually very clear. If you have a house worth £500k, you're going to need to live in it until you die. Once you die, you don't need it any more. That's not at all arbitrary. And lets be clear, when you do die your kids are still going to realise approx £400k of money they haven't earned themselves. I don't see the issue.

Because the state doesn't see fit to intervene in gifts from parents to children before the parent dies. According to you it's morally wrong to hand over gifts tax-free after they die. Irrespective of what the gift is, it is morally wrong. Well...why is it not morally wrong before you die? The child didn't earn it.

To put it another way, I buy an expensive painting. I decide to sell it and give the money to my children. As long as it's done at least 7 years before I pop my clogs those gifts are tax free. If I die and then the painting is sold, my children will have to pay tax on the money. Same painting, same amount of money, same benefactees. Why are the two scenarios not morally the same to you?

 

[Castello]

A very interesting point. Does anyone know why this is, if it's (apparently) so important to reduce the deficit now?

And whilst people are answering this, does anyone know how much the deficit is and how it arose.

If I get a request to pay something I'd normally want an explanation of how much I have to pay and how it arose.

 

[Pot noodles for everyone]

....of pro-business think tank The Work Foundation...

I'd also question this claim. Past prominent luminaries include Richard Reeves, another Guardian journalist and now head of Demos (another left-leaning think tank) and if the Work Foundation's bed-fellows are anything to go by it's more at home with the TUC, Demos and the Fabian Society than the CBI or IoD.

 

[seagullsovergrimsby]

Why hasn't the coalition government been more radical in scrapping child benefit altogether from 2013 ? Those with a joint income of less than £30k would still be covered by the Universal Benefit which can pay a tax credit (or vouchers for those on workfare) for the first 2 children.

 

[Scampi]

Defence of inheritance tax is always ill-thought out proto-Marxist, claptrap.

Thats just bollocks. Are you an american right wing shock jock by any chance?

 

[Pot noodles for everyone]

Thats just bollocks. Are you an american right wing shock jock by any chance?

Typo by me. I meant defence of inheritance tax on moral grounds is proto-marxist claptrap.

Taxation is a necessary evil and how Governments go about that is up to them to propose what's fair and then ultimately for us voters to decide. However, people here have claimed a moral right to tax. That gets us into some right murky waters.

 

[Robbie G]

IMHO:
1.)Regardless of the country's financial situation,it would be very harsh to cut some families income without notice.Generally,we are given notice of any fiscal changes.
2.) I understand that these changes are part of a cost saving measure to raise money for Ian Duncan-Smith's plans to make work worthwhile and to try and get rid of the poverty trap.Initially,this plan will put welfare costs up,before the hoped for payback.I suppose the conclusion must be that it will be some time before the plan can/will be implemented.In the scheme of things(i.e. the total deficit)£1.0 billion savings is really a drop in the ocean.
3.)We haven't yet heard the full extent of the proposed cuts.Maybe come 20th Oct.we will have a fuller picture including a timescale of all proposals.
4.)Imagine the howls of protest across the country from both the public and M.P.'s of all parties if an immediate cut was made!It would be political madness.
5.)This change is not just about reducing the deficit;besides helping pay for IDS's master plan of making work pay,it is doubtless part of a plan to wean those who are deemed to not really need 'benefits' of this kind,away from them.
Those are my thoughts anyway....what does anybody else think?

Of course there has to be time to implement the policy, that's a given.

As the estimated savings are quite small (relatively), why has this been announced now? I'd have thought they would be announcing 'quick cutting' policies at the moment.

I'm all for policies getting people into work, but I would have thought that the government would be more concerned about other things at the moment, for example, the state of HMRC.

 

[BLOCK F]

Of course there has to be time to implement the policy, that's a given.

As the estimated savings are quite small (relatively), why has this been announced now? I'd have thought they would be announcing 'quick cutting' policies at the moment.

I'm all for policies getting people into work, but I would have thought that the government would be more concerned about other things at the moment, for example, the state of HMRC.

As I said let us wait until 20th Oct.

 

[Monsieur Le Plonk]

Why is there a 'benefit' for simply having a child anyway? If you can't afford to raise a child without state hand outs, don't have a child! This isn't a third world country as much as the Pope insists it is. It's like the government are willing people to breed.

Nice one Magoo. Couldn't agree more. Can't think of a single decent reason that higher rate taxpayers can justify child benefit.
Whereas inheritance tax is another matter entirely. Come on Tories, hurry up and abolish it.

 

[Robbie G]

Nice one Magoo. Couldn't agree more. Can't think of a single decent reason that higher rate taxpayers can justify child benefit.

It may be an incentive (now) to increase the fertility rate to pay for the inevitable large increase in retirees in a few decades time, as a result of the 'baby-boom' post-war period.