The journalist Lewis Goodall has caused a scandal by calling for a 100% inheritance tax and defending his proposal on LBC radio.
In the context of Labour chancellor Rachael Reeves thrashing around to find money as her ‘growth first’ economic plans collapses, she is planning on ‘tweaking’ inheritance tax proposals.
Goodall argued for effectively ending inheritance and using the money to massively reduce income tax as a way of ‘incentivising work’ to boost productivity, thereby creating a true meritocracy by ending the existing aristocracy of wealth.
He added that it would also help fund public services.
The fundamental point was that there should be no right to inherit ‘mummy and daddy’s money’ but to get to keep more of your money you earn through work whilst you are alive.
The backlash online was considerable. Some people denounced him as a communist. Others said it was fantasy economics. Others raged that they ‘wanted something to pass onto their kids’ and that Goodall’s proposal was attacking their rights as a family.
The proposal for a massive increase in inheritance tax is not new. Thomas Piketty proposed radical inheritance reforms in his books Capital in the Twenty-First Century (2013) and Capital and ideology (2019), arguing that inheritance fosters class, wealth and power inequalities. Piketty argued for it to be set at 90%.
The argument about inheritance tax isn’t really about the technicalities of what percentage, it is about what kind of society we want to live in. The case for massively increasing it is that it is better to democratically redistribute wealth in ways that benefit the greatest number of people rather than just separate families. Public expenditure pays for schools, transport links, social housing, social care, libraries and so many other things, we all benefit from a society where these things are well funded.
Some people are upset at the proposal because they ’worked hard’ and ‘want to pass something down to their kids’. This is understandable, and most people are not passing down huge amounts of wealth; it might be a home or maybe a few thousand once the property has been sold. The average inheritance in the UK from 2011-2016 was £11,000, though people born in the 1980s might receive a lot more as the property boom continues.
After decades of neoliberalism and austerity the idea that we have a collective and social responsibility to provide for people, not just the basics to survive but to improve lives (the social wage as it used to be called), has been eroded. Now there is more of a view that people (or families) have to get individually wealthy and buy up as much property as they can to have a good life and provide for their children.
The social contract for what people expect from the government or society in general has been broken, replaced by a conception of ourselves as consumers in a dog eat dog market place, not as citizens who should expect a good life which the state in its most expansive way has a role in providing.
Goodall’s proposal also inevitably draw a backlash from racists – ‘you want to take native [sic] people’s money to spend on third world foreigners!!’ is not an uncommon response.
We need a mass movement and an ecosocialist party to fight for a total shift in society away from neoliberalism and austerity towards a social and collective understanding of how we provide for each other and ensure the good life. Any change in inheritance tax must target the very rich first, ensuring that more middle class people can feel secure that changes in their tax arrangements are also part of a general shift in society that benefits them through other ways (properly funded NHS and local government for example).
We also have to consider how money is transferred by the capitalist class to their children through corporations and trusts.
Let us be clear – there are two futures ahead of us. There is one in which there is extreme wealth inequality, with the billionaire class owning everything including the media and far right pro austerity politicians cutting social provision to nothing, whilst we wage endless wars on a dying planet wracked by global warming. Or we can have a society that provides expansive universal services, free transport, secure social housing and combats climate change.
A radical redistribution of property and wealth for the social good is only the first step. Moving towards a society where we begin to produce and provide for human needs and wants outside of the nexus of commodities and money is the real goal for a just and equitable world.
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One question worth considering is that there is no guarantee the the right of inheritance does automatically provide for one’s children. On Novara Love on Friday, both Michael Walker and Helena no Justice MTG said they stood to inherit a certain amount because their parents owned houses, but they cannot know this. If you go into care, you have to pay your own costs if your assets, including your house, exceed £23,500, so your best option if you want to bequeath your wealth is to die at very short notice and never go into care.
With nearly 700,000 people a year dying in the UK, I think at least 200,000 houses,flats and palaces would pass to the state every year under a 100% inheritance tax. This is worth discussing …..
Interestingly, despite ending the right to inheritance being in the list of demands at the end of the communist manifesto, later on Karl Marx was not really in favour of raising it, arguing that inheritance is merely an outcome of private ownership of the means of production abd would disappear when that was socialised, this being an easier measure to argue for. Now, after a 40-year boom in house prices, I’m not so sure:
https://www.marxists.org/history/international/iwma/documents/1869/inheritance-report.htm