The Guardian, for those who are unaware, is often a rather unserious publication. This unabashedly left-wing institution's unseriousness was once again highlighted today when it ran an opinion piece titled, “Why Not Fund the Welfare State with a 100% Inheritance Tax?”
The author of this most misinformed piece is a young woman by the name of Abi Wilkinson. Ms. Wilkinson writes about, “politics, inequality, gender, popular culture, and anything else that takes her fancy.” I’ll give you three seconds to work out her politics.
Recently, Ms. Wilkinson has written several curious pieces for the Guardian, amongst which includes a piece titled, “The ‘tears of joy’ emoji is the worst of all – it’s used to gloat about human suffering.” In this piece, which is devoted to an innocuous and popular iPhone emoji, Wilkinson states that:
“Still, there’s something about this particular character – with its broad, cackling grin and the perfomatively prominent tears of mirth – that just feels inherently mocking and cruel.”
She continues, with Mensa-level logic:
“When I look at its yellow face, I see the detestable, carefree smirks of Nigel Farage and Boris Johnson as they merrily dance through the current chaos – hop, skip and jumping over the cracks in society they’ve helped drive deeper and wider, safe in the knowledge they’ll personally be just fine no matter what.”
If you are currently staring at your screen in disbelief, I sincerely empathize
But this is all tangential discussion. For today Abi Wilkinson has ventured into the field of economics and class warfare. In her latest piece, arguing for a 100% inheritance tax, Ms. Wilkinson wants nobody to be able to pass on a single cent of their accumulated lifetime wealth to their descendants. Rather, their assets, estates, and cash should all be expropriated by the state upon their death, and should subsequently be redistributed to the public at large.
The crux of her argument, it seems, lies in the following passage:
“Yes, the desire to pass on property to your descendants may be natural – but why should we be slaves to our biology? Social progress has frequently depended on our ability to transcend individualistic urges and work together for the common good.”
There are, of course, several flaws to this line of reasoning, not least that it is not an “individualistic” (read: selfish) “urge” to prioritize one’s offspring to the rest of society.
But there is a larger issue here that often gets lost in these discussions of economic “fairness.” Ms. Wilkinson deems the 100% inheritance tax as being for the “common good.” But it is astonishing that it has never crossed her mind that such a tax would actually result in the exact opposite of its intended purpose: it would end up hurting the common good rather than bolstering it.
Firstly, what Ms. Wilkinson, along with the economic hard-left must understand is that one of humans’ primary motivations for wealth creation is the hope of passing it on to their kin. If one were to make career choices knowing that none of the fruits of one’s labor would be passed on to those whom one loves most, there would be a severe disincentive for wealth creation in the first place. Perhaps we’d have more librarians and surf instructors, as opposed to industrialists and tech entrepreneurs, which would massively lower our G.D.P.
Secondly, if Britain were to institute such a tax, many wealthy individuals would simply move to a different country. I suspect that the Swiss, the Luxembourgers, and the Bermudians will be licking their lips. Moreover, if in the unlikely event that wealthy Britons decided to stay in Britain despite there being such a tax, they would most likely spend or give away all of their money prior to death.
All of this would result in far lower revenues for the British government, meaning even less money for the social services that Ms. Wilkinson so cherishes.
Lastly, what Ms. Wilkinson fails to mention in her article is that there already is an inheritance tax in the U.K. Currently, it stands at 40% for all assets valued over £325,000 for individuals and over £650,000 for married couples. Regardless of this figure being 60% less than the percentage that the Guardian is proposing, the inheritance tax still is opposed by a vast majority of the British public, and most want its threshold to be increased substantially.
Hence, such a tax would be anathema to the will of the people, only further buttressing the stereotype of the average Guardian journalist as being privileged, disconnected, and morally superior to the average British citizen.
But even if Ms. Wilkinson were correct that it would be feasible for the government to successfully extract all of wealthy individuals’ assets at the time of their death, Ms. Wilkinson fails to mention that it would be a paltry sum relative to total government spending. For the 2013/2014 fiscal year, it was estimated that taxable estates were worth about £77 billion. Total government spending in the UK for 2014 was £732 billion. So such a tax, in the most far-fetched and ideal scenario, would only yield less than an additional 10% of money for the government to spend, given that the government already does collect some inheritance tax. This, nonetheless, would hardly enough to “fund the welfare state.”
But again- the actual sum that the government would be able to ultimately collect would in reality be much lower, given that capturing all the available inheritance money would prove fruitless in a practical sense.
But then again, all these economic facts would surely be far too complex for the Guardian to grasp. You see, every time one visits the Guardian website these days, one is greeted with the following message:
How telling that a paper that supports such half-baked economics is itself in a state of financial calamity. Who would’ve thought that such hard-left economic thinking could lead an institution to near-collapse. It would all be hilarious if it weren’t so tragic.