Jeremy Corbyn wants to impose lifetime gift limits on children of £125,000

[ForTheLoveOfDoughnuts]

So we pay tax on what we earn. What we buy. And now this.. what's the point of working hard to help out our kids, for this to even be considered. Or AIBU?

Ds is severely disabled. His money from us will be going into a trust.

Socialism working to the advantage of everyone not just a minority?

Oh um, every single mixed economy in the world?

Provide me one example of a purely free market economy where it works for everyone not just for a minority.

I

Saw this in the news today and it makes my blood boil. We work hard for our families and especially our children. So now we work hard and anything we want to gift our children over a certain amount will be taxed. It's disgraceful

Zipee, i guess you have to have a lot to use to be affected.

Most people wil never even give their children 125k.

Average bank of mum and dad amount is between 25 and 30k.

the complexity of the situation is beyond you
To be fair the complexities of many situations are beyond most of us....I mean there just isn't time to go down enough rabbit holes to understand everything in detail
The territory of unknown unknowns is vast

He's clueless. Brexit proves it.

There’s no point arguing with the ideologically possessed, like Zippee. She has a habit of making wildly inaccurate claims she can’t support. Truth is whatever she’s having herself.

So which point is wildly inaccurate here?

Do at least try to engage rather than just attacking me.

Do at least try to engage rather than just attacking me.

You don’t engage, Zippee, that’s your problem. You know everything, you’re right about everything, and hurl insults if people disagree. I can’t be bothered, frankly.

I'm not sure if this has been pointed out yet, but the USA, that diehard bunch of socialists, taxes gifts. (There are exceptions where money is for education or medical purposes.)

Funny, haven't seen anything talking about the tax decrease for the high tax bracket (affecting only higher earners) followed by increase in NI (affecting all - so disproportionally the low earners) by our not-so-esteemed B Johnson.

Have you been reading a different forum or maybe not reading any news papers. The 50K tax proposal has been all over this forum and the news.

Why do people play this faux innocence

I haven't hurled insults at all, you have at me.

Where have I been widly inaccurate here ?

Surely people would just give them cash then.

I thought about that, don't people have to prove where they got very large amounts of money from?

Oh um, every single mixed economy in the world?

You must have forgot to namechange here.

UK, China, Russia all have mixed economies, but no doubt this is where the caveats start

Ignore em Zipee. You talk sense. Lot of people on MN are all for a fair society, right-on etc right up until the moment it might hit them in the pocket.

But all mixed economies have elements of socialism in them no? There are no pure examples of any type of economy in the world, and in fact those that operate more socially democratic policies have lower levels of inequality and higher levels of social cohesion.

Property is Theft. Straight out of the anarchist/Marxist-Leninist cook book. Bring everyone down to the same low level. Crush aspiration. Tax them till the pips squeak.

Genuine question for those who think "tax is theft", where would our infrastructure come from if we weren't taxed? How would people who cannot work/don't earn enough to live be supported? How would sick people receive medical care? How would our roads be maintained? Our police force funded? Hospitals built?

I was being a bit tongue-in-cheek with that phrase, but to answer one question seriously...

There was an article in the Guardian recently putting your side of this argument, and I actually agreed with much of it, for example I disagree with the right-wing idea that high rates of tax discourage economic activity. However the author then went on to say that the "taxation is theft" idea was wrong, the money you earn is not yours in the first place, it belongs to society, as the wealth of the rich could not have existed without the context of the society in which it was created, that context including tax and the spending it funds.

I then went and looked at a wikipedia page of what UK government revenues are spent on, and I added up that two thirds of it went on essentially optional social spending. In my opinion it would make no difference to aggregate economic output whatsoever if this spending did not exist. It's purpose is purely to redistribute wealth and decrease inequality. Which are arguably good reasons for doing it, but it's a stone cold fact that the rich are made poorer by as a result of redistribution, just as the poor are made better off. (It's true that those of the rich who came from humble backgrounds might not have got there without it, but once they are there, their personal wealth will be maximised if they pull up the ladder behind them. I believe that if they hadn't had help, the ecomomic niche they filled, would have been filled by someone else, their wealth accrued to someone else who had a better start in life. They would have lost out, but the economy in aggregate would have been no worse of.)

@PettyContractor

yes - because the solution is les tax, and better use of that tax.

In short, you could cut UK government spending by two thirds with no detrimental effects on the economic infrastructure, (But huge detrimental effect on the lives of most peoplem which is why there's no danger of us voting for this.)

Government spending actually has the highest multiplier of all components of Aggregate demand.

Two thirds of government revenue goes om optional social spending? I think you might need to justify that further

Hmm, General election looking more and more likely, Must be time for a story trashing Corbyn. How very predictable. Hang on, we haven't had a good anti-semitsm smear in a while, or is that tomorrow?

It’s actually a proposal from the Resolution Foundation, picked up on in Monbiot’s report.

The £125k covers gifts (in excess of £3k) and inheritances and excludes transfers between spouses.

This would exclude the great majority of inheritances, and the tax would not apply retrospectively.

Our modelling shows that such a tax would allow significantly lower rates than Inheritance Tax’s flat 40 per cent rate while still raising money. Beyond a £125,000 Lifetime Receipts Tax Allowance, a basic rate of 20 per cent should apply, with a top rate of 30 per cent (paid by relatively few) above £500,000 of lifetime receipts. If introduced in 2020-21, such a system would bring in an estimated £11 billion, compared to Inheritance Tax’s projected £6 billion.

A progressive recipient-based tax such as this would also give donors an incentive to target their bequests on those who have not received large amounts before. In our costing we assume (for simplicity) that for every three people currently set to receive an inheritance, one extra person would receive one due to that extra incentive to split estates – with the average inheritance being lower as a result. So while the state can redistribute inheritances directly, it can also encourage donors themselves to spread wealth wider.

By moving away from being a ‘death tax’ to capturing all lifetime gifts, a Lifetime Receipts Tax would reduce many of the current opportunities for avoiding Inheritance Tax.