But why hate inheritance tax if only 4% pay it?

One of those things that we’re seeing said out there. Only 4% of estates pay inheritance tax. Yet 30% of people are against the tax on the basis that they might have to pay it. Well, of course, it’s possible to blame the innumeracy of the general population, which is what many are doing.

An alternative to that is to actually think - yes, yes, we know, this is politics, cogitation is not a positive value here - and to wonder why? Why does such a large portion of the population hate this tax upon dead people? Who, after all, can’t complain that much, they are dead after all.

Yes, we are aware that there’s a darn good classical liberal argument for a 100% inheritance tax. We could - should - succeed by our own efforts not by membership of the lucky sperm club. There is also that opposing - and still classically liberal idea - than an increasing portion of the population economically independent of the State might lead to that desired outcome of a smaller state.

But leave aside the theory for a moment. Why do so many hate something that won’t affect them? One asnwer is that it doesn’t matter. Assume, for a moment, that we are a democracy - ahahaha. So, if the folks are against it then it doesn’t happen. You know, will of the people and all that.

But that point that only 4% of estates pay inheritance tax yet 30% think they will be affected. How do we explain that?

The most obvious point is that the incidence of inheritance tax is not actually upon estates. Yes, there is that Australian finding that people will time their death so that death duties do not have to be paid. But, you know. The real point is that the incidence of interitance tax is not upon the dead nor their estates.

Recall what tax incidence actually studies. Whose wallet gets lighter as a result of the tax? Given shrouds and pockets it’s not the dead, is it? It’s the people who inherit less money as a result of the tax. So the number of people against inheritance tax is not the number of people whose estate will be subject to it when they die, it’s the number of people who think they might inherit from one when someone does.

We’re all, as we know, part of that complex system that is society. Inheritance - even perhaps of modest amounts - is common enough among nieces, nephews, friends as well as direct descendants. The number of people against inheritance tax is not the number dying, it’s those not benefitting from those dying. Or, rather, benefitting less.

This does not, we are aware, answer the question of whether inheritance tax is just, righeous, or the robbing of those no longer able to complain. But it does answer why so many are agin’ it. The incidence of inheritance tax is not upon the dead, nor their estates. It’s upon those who inherit less as a result of the tax. And that might be greedy, a desire for unearned wealth, inequity producing or even bourgeois freedom generating.

But there are many more people hoping to inherit than there are estates being inherited from. Which is why the number of those opposing inheritance tax is higher than the number of estates being taxed.

Seems fairly obvious to us to be honest but we’ve not seen it mentioned elsewhere as yet. The opposition to inheritance tax is those who think they’ll receive less money as a result of it. Which, you know, is obvious, no?

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