h2g2 The Hitchhiker's Guide to the Galaxy: Earth Edition

"The problem with idealism is we live in an imperfect world with imperfect people and we'll never achieve the ideal."

The problem with not being idealistic and the notion that things will "never" be perfect is that it becomes an excuse for not even trying. It's an awful argument, to be frank, and I'm surprised at how often it's trotted out. It's like arguing that we'll never eliminate deaths on our roads, so there's no point in looking at ways to improve safety. As long as there are parents who are better or worse at bringing up children, there will be inequality. But that's no excuse for allowing other kinds of inequality.

I don't think people generally begrudge others inheriting wealth .... What people do see is a disincentive to earn wealth in the shape of inheritance tax. Unfortunately there are far too many in our society who find it easier to point and whine about other's good fortune than to actually strive to better themselves. It's a curiously British thing to denigrate the achievements of others. "

I think you're confusing the generations here. For the sake of this discussion we've assumed that the rich deserve their wealth (which is something I'd question, but what I'm interested in finding out here is why right wingers oppose inheritance tax when it conflicts with their other values). So it's not a question of the "politics of envy" (whatever that means) against deserved wealth, but against undeserved wealth which disadvantaged those who aren't so lucky. I don't understand why inheritance tax is supposed to be a disincentive to earn more money. Why should that be?

"You point the finger at people inheriting wealth that they haven't worked for. What about the wealth inherited via the State that those 5 million have? Is it fair that some people have to do two or even three jobs to feed a family and keep a roof over their heads whilst there are people who need do nothing and yet still see their families fed and their needs met?"

I don't understand what "inherited via the state" means. State benefits are not inheritance. Neither are they entirely unearned in the same way. It's part of the social contract, and they're available to everyone should they be needed. If some people are working like dogs to make ends meet, surely that's an argument for increasing the minimum wage and for decreasing the tax burden on the "working poor" by whatever means? Reducing benefits for those who don't work (and there could be many reasons why people aren't working, many of which entirely reasonable) will not help those who are working in poorly paid jobs in any way whatsoever. If you think that the working poor are having to support the "economically inactive" isn't that an argument for shifting the tax burden onto those who can comfortably afford it?

"One of the most basic aspirations is to provide for your children, that they need not struggle as you had to. Why shouldn't people be rewarded for a lifetime of toil in the shape of being able to pass on the fruits of their labours to their children?"

For all the reasons I gave in post 67. It should be noted, however, that even the current inheritance tax does allow plenty to be passed on, even for the richest.

"In a world of perfectly equal outcomes for all, there is no incentive to strive. To achieve this equality, you must lower the expectations of all because there will always be the lazy and the feckless. "

I'm disappointed by this bit, SWL, because I said nothing of the kind. One of the reasons that I'm having this discussion is that I'm trying to understand the right wing mindset. I'm wondering whether the typical right wing commitment to rewarding hard work and using notions of merit and desert to justify large inequalities are genuine, or whether they're just a fig leaf for defending the status quo. In other words, do they want something like fair competition in the next generation between those from all social classes, or do they want to entrench existing advantages and defend their class privileges.

So I suppose I'd like people to try and meet me at least a quarter-way and try to understand my position, and what I'm asking. To restate what I mean by equality of outcomes. (from post 75):

"A fair society is one in which two people with the same abilities and the same drive to use them should have (all other things being equal) similar outcomes, whether their parents were princes or paupers."

(I should add that this is a necessary, not a sufficient condition for a fair society). Now I don't understand how this can possibly be construed as removing the incentive to strive.

"If it is a more equal society you're after, considering those 5 million people cost us £160bn a year whereas losing inheritance tax would cost us £3.5bn, wouldn't it be a better idea to target those people who are costing the country more?"

I don't see what that has to do with equality.

Uh oh - I'm a victim of one of my own 3am rants again.

First off, sorry Otto. I wasn't intending to be offensive or condescending with the "pretty idealism" jibe.

What ticks me off about the whole "equal society" trip is the fact that it refuses to recognise people as individuals, each with a personal stake and responsibility for their future. You make a nod in that direction to your credit when you mention equal drive, but there is no equality of drive and absolutely no possibility of there ever being an equality of drive. Some people are just lazy, some people take practical steps to realise their aspirations.

Inheritance Tax operates as a dampener towards over-achievement. It's effectively saying "Here is a line. Cross that line and we will impose punitative taxation".

So long as we keep attacking the achievers in our society and rewarding those who do not contribute, a sense of unfairness will be perpetuated.

Key to my argument is a recognition that of those in benefit there are those who are in that position through no fault of their own. I accept that entirely and agree absolutely that we have a duty to help. But it is facile to imagine that all those on benefit are in this position. Successive Governments (Right and Left) have made manipulation of these figures into an art form, but are we really to believe that the number of people genuinely physically unable to work and claiming Incapacity Benefit has risen 500% in 10 years?

Once again, we see the familiar refrain "raise the minimum wage". What are the consequences of this?

1) It increases the tax take for Government
2) It increases costs to business
3) The costs are passed on to consumers
4) Benefits have to be raised to match the cost of living. Funded from 1).

It's a circular, self-defeating approach but it has the same simplistic & populist ring to it as "Tax the Rich" and inheritance tax.

This is beginning to sound a bit like some strike discussions that I have seen across this country. Public service employees are compensated with wages that reflect the region that they live in. In some parts of British Columbia, and in Alberta where the oil is pumped, and Ottawa where all the politicians are ... wages and costs of living are very high. The other 90'ish percent of the country, the costs aren't so steep. So when discussions came around to making equal trade grades all of equal salary, ... of course the unions wanted everyone to be paid equal dollars. Across the country. But rather than coming down to the most common levels, which wou;d be truly fair, they wanted everyone brought UP to the higher grades. In the end, this would have a common office clerk in Nova Scotia earning wages comparable to a well experienced metallurgist. Now is that fair? Or equitable?

In the end, it depends on where you stand, I suppose. I'm a middle-aged guy, have now worked fairly hard for somewhat over 30 years, and have atleast 15 more years of labour before I might retire. I have managed to be frugal, and now we are well in to a mortgage against the ownership of a small house, on it's own piece of land. When my time comes to wander off to the next what-evers, my daughter and 4 grand-children will get the proceeds of my labours. What-ever myself and the missus have not consumed. And to me, that seems reasonable. it will make none of them wealthy, nor head and shoulders above any of their neighbors.

I have a few co-workers, similar backgrounds, similar work experience. They too have kids and grandkids. But these co-workers rent at budget-priced places, and spend every penny to float the Carribean in the winter. When their time comes, they will leave their off-spring a small mound of debt to pay off. Without an actual estate to meet the costs.

Equal people, equal opportunities. Two very dissimilar outcomes. And by much of the preceeding posts, it is still my responsiblity and duty to happily have the fruits of my labours taken from my grandkids, and spread over the other chaps'. Sorry, it just doesn't work for me.

Ah, the SKIers (Spending Kids Inheritance)
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2005/07/23/cmboom23.xml

To pick up some of Otto's other points:


Has anyone actually said that? I've certianly nothing against hefty taxation of those with large incomes during their lifetime & better tax relief for low incomes.


How far back do you define background? I've noticed that many famous rich people (you don't hear much about the non-famous rich ones!) come from very modest origins, often quite poor grandparents. Often ones who have the attitutude of working hard, valuing education.
I quite agree that money can buy advantages, but there's no guarantee that giving poor people more money will enhance their prospects to the extent you seem to expect.
I wonder how many of the lottery winners (now is that a fair acquisition of wealth - it's very uneven) will improve their position in life the way you envisage?
I think it's all sorts of attitudes that need to change to hope to produce equal outcomes from unequal starts, rather than redistributing wealth.

So I should stop paying my mortgage, move into rented accomodation, and spend every penny on enjoying myself. I would also encourage my children to do the same.

My landlord will get rich, as will travel companies, and breweries, I suppose I'll accumalate electric goods too.

Then I'll die, lets hope I took insurance to pay for my burial.

Hmmm - and I'm selfish because I want to leave money to my children.

I don't think I want to inherit - my parents have given me enough as it is. Its time to make sure I deserve it.

<>

McKay, you're an intelligent chap, why don't you answer Otto's questions?

Let's look at the socialist idea taken to it's logical conclusion.

100% inheritance tax. You're dead, the state takes all. Allied with 0% income tax. Everybody starts with a level playing field and everyone gets to enjoy the full fruit of their labours.

I wonder what kind of society that will create?

One might argue that's really the *capitalist* ideal taken to its logical extreme - competition from the same start.

I do find it intrigueing, but I don't think you'd really want to go as low as 0% income tax: edumacation, edumacation, edumacation.

You don't want income tax to go as low as 0%? So you're arguing for what, 110% tax, 120%, 150%?

"One might argue that's really the *capitalist* ideal taken to its logical extreme - competition from the same start."

Absolutely. This is exactly why I raised this as a thought experiment back in post 72. If you're a capitalist/ right winger who believes in fair competition, you surely ought to be in favour of this, if it were practically possible. If you're not, why not? Is it because actually you *don't* believe in fair competition?

I'm not in favour of the scenario on equality grounds which I'll share if people are interested, but which is a side issue.

More detailed responses to individual posts to follow when I have the time that they deserve....

Hello Otto

"But the effects of large numbers of young people receiving large amounts of inherited wealth which gives them a huge advantage over the less-fortunate majority is a devastating blow to prospects for a fair society and equal opportunities."

I have never really thought of myself as Right, Left or Centre as I can never find one of them saying enough things that I believe in that sway me enough to vote (Have not voted since 1979)

The essence of my position (if this helps) is that all monies earned are taxed at source - and then again afterwards depending on what you do with it. Fair society and equal opportunities? I do not think that society was ever (or ever will be) "Fair". If you take that as your start point, then you do all you can (legally obviously) to make sure that you and your family triumph over adversity. Mostly (and you may well disagree) it is money that smoothes the path and provides "better"
conditions in which to survive. I am not rich and never will be, but next to the minimum wage less fortunate guy working at Micky D's then I suppose I would appear to be. I cannot in all my heart be a "Socialist" because I am very largely concerned with how we as a family fare.

I do believe that it is up to an individual to claw his/her way up, and if succesful, to enjoy all the benefits once there. At the risk of repeating myself, if my hard work gives my kids an edge, I would rather the "Edge" went to them than anyone else. Sorry if that comes over as selfish. I do not see people Inheriting being a cause of rising house prices either, because that is surely just market forces? Back in 1987, the chancellor took away the ability to have two amounts of £30k tax free allowance on buying a home. Thousands of couples piled in, prices rocketed for a while and we all know what happened next. Prices too high, no first time buyers, prices collapsed - I know because I bought at the peak and had to sell three months later - the price dropped by £18k in the two months it took to sell.

I know that the market today is probably wildly different today with a lot of buy to let going on, but if I can help my kids own their own place instead of being beholden to some landlord, then that is what I want to do.

Actually, now that the allowance has gone to £600k I will probably never need to worry, but the debate has been worth it I think!

Re SWL's post 82:

I think we agree to the extent that there are people living on benefits through no fault of their own whom society has a moral duty to support and those who are sponging and are there through every fault of their own. Where I suspect we disagree is the relative proportion, and I don't think we will agree.

But there's three points I would like to make here - one is about the degree to which a lack of 'drive' is a person's fault. Low aspirations and low self-esteem rob people of their drive, and unemployment wrecks havoc with people's self-esteem. Now some people have the mental strength (for whatever reason) to carry on regardless, while others don't. Secondly - don't the children of 'spongers' deserve a fair chance to make something of their own lives? Doesn't this require a decent social minimum standard of living? Thirdly - why do people who get angry at the "idle poor" not get even angrier at the "idle rich"?

On the point about the minimum wage - it's been a success so far, and the predictions of the doom-mongers have been wide of the mark. But I'm more interested in principles than in nuts and bolts.

Rev Nick (post 83)

I just don't think that enriching one's children and grandchildren is fair. As I've said a couple of times before, leaving inheritance money to offspring looks absolutely permissible (and even something morally required) from the point of view of the parent. But that's looking at it from entirely the wrong end of the telescope.

From the point of view of the grandchildren of your neighbours who spend their money on holidays and rent, and from the point of view of your own grandchildren, there's a great deal of unfairness. Your grandchildren didn't deserve to have a prudent granddad, and your neighbours' didn't have an imprudent one. So one set have an unearned and undeserved advantage over the other. If it's so small as to make no difference, then fine. But if it's enough so that one lot can afford to buy a house and the others can't, then it is a problem.

I should say also that I don't blame people under the current way of things for wanting to leave money to their children. It's a very basic paternal or maternal instinct, and that's fine. And it's a form of arms race - if you don't, then others will, and they will be disadvantaged. My point is a wider political point about what the rules should be, so I hope no-one things I'm attacking them personally.

Teasswill, post 84

The reason I say that "opponents of the inheritance tax would rather cut taxes for the wealthy than for the poor, for reasons that I just don't understand" is that we're having this discussion at all. Now, I'd accept a raising of the threshold of inheritance tax if accompanied by a big cut in VAT and the lowest band of income tax, and the difference made up by taxing the rich. But I don't think many here would support that.

What sort of attitudes do you think need changing, and how would this be achieved?

Captain Black, post 92

Fair play to you - you're being honest about it. And I think there is loads of hypocrisy and humbug on these kind of issues - people talking about rewarding thrift and hard work and enterprise, but actually completely uninterested in real, fair competition. Hence my thought experiment - to which reactions and comments are very welcome from anyone.

But can I press you on one thing? You say that:

"I do not think that society was ever (or ever will be) "Fair". If you take that as your start point, then you do all you can (legally obviously) to make sure that you and your family triumph over adversity.

This kind of language is quite common from those who defend inequalities - generally in response to an argument about principles. No doubt that society isn't fair, and that it hasn't been fair in the past, and that in at least some respects, it won't be fair in the future.

My questions are these: Does it bother you? Do you care? Would you support or oppose moves to make society at least a little fairer than it is now?

No offence taken at all, friend. Each thinking person develops their own ideas of what might be best for the individual or for the crowd.

Mind, if true equal chances for all is to be a goal, I can only see one method. Every child is turned over to the state at, say, 5'ish years of age. So all live and learn in common circumstances. And once matured to working age, each makes their own way, turning in every pence of wages to the government. So that common standards of housing and amenities can be provided for these new adults to live in. Everyone on equal footing, all along the way. The true and ultimate nanny-state, where no one is above anyone else.

Funny, I keep thinking along the same lines. It's a natural instinct of men for self-betterment and thus inequality so to preserve an equal society is going to take massive state intervention at every step.

Yes, the stated goal may be to raise conditions of those at the bottom of the heap to the median, but unless you're going to uninvent currency or barter, there's always going to be inequality.

That isn't a pooh-poohing of what seem to be laudable aims. We should by all means help those less fortunate, but we should accept the reality that in life, there are winners and losers. If you make the consequences of losing inconsequential, where is the impetus to win?

That is the heart of what I'm getting at I think. Inheritance tax is punishing people for succeeding.

We see the same philosophy being instilled in schools. Non-competitive sport, no winners and losers, everybody has value. We didn't have enough kids leaving schools with qualifications so we dumbed down the qualifications. I'm sorry, but life just isn't like that.

A lot of theories working towards equality of opportunity are great on paper, but that's where they should stay imo. We should instill in our children the desire to strive, the desire to succeed and we should demonstrate that the rewards are there for those who try.

Purely as an aside ... I've hunted for laws in this country (Canada) about inheritance. All I can find is that 'most' such incomes and bequeathments are exempt from taxes. Nowhere can I find an actual beginning point that the tax-man might step in, with a hand open. So this discussion does NOT directly affect me. I am just expressing my views of what would seem right or fair to me.

Now, back to the actual flow of the thread ...

To specifically address your three points Otto -

Re: Individual's drive. It varies within families with absolutely equal conditions. If we can't create equality of outcome where equality of opportunity has been achieved within such a small social group, how can we ever hope to achieve it in society as a whole?

Re: Individual's standard of living. There is a minimum and it is guaranteed by the state in this country. I've lived in poverty and it's bloody horrible and when you're living at that level, every perceived iniquity and inequality is amplified. You have a choice: you can get bitter & twisted or you can choose to do something about it.

Re: Idle poor & idle rich. Why do we get angry at one and not the other? I think it's because we aspire to the latter and feel the former are a burden.

Hi Otto

Ohhh, I am being pressed for answers, so never one to run away here it is....

Otto Said
"This kind of language is quite common from those who defend inequalities - generally in response to an argument about principles. No doubt that society isn't fair, and that it hasn't been fair in the past, and that in at least some respects, it won't be fair in the future.

My questions are these: Does it bother you? Do you care? Would you support or oppose moves to make society at least a little fairer than it is now?"

Well.

Does it bother me that society isnt fair? No. Not really. I am a realist and I think that mankind/womankind would find it impossible to live in a "Fair" society. There would always be a Mr Big out for the quick buck and always be someone playing the system to gain an advantage. Inevitably, corruption of one sort or another would creep in and that my friend is where the perfect "Fair" society splinters.
It really doesnt bother me because I have taken the view that it really cannot be changed - so if it cannot be changed, then learn to live within it.

Do I care? In an ideal world, yes I would care about fairness but humans being humans........see answer above.

Would I support or oppose moves to make society at least a little fairer than it is now? I suppose I would have to say define "a little fairer". If you could take the world back to year zero - and I am not endorsing a certain Mr Pol Pot or advocating his methods, but everyone back to a point where nobody had anything and all was truly equitable, then it might be worth a try.

But - this is the real world. I neither support or oppose moves to a "Fairer" society - and I know that sounds like a cop out but it truly isnt. It may be a bleak view, but I think society will get a lot worse than it is today. Is there one single place on earth that you could point to Otto that you would hold up as an example of a truly "Fair" (or as fair as you can get) society?

Human nature gets in the way I am afraid. All I have done is reconciled myself to that fact and do the best I can to operate within the system to the best advantage.