Sir, – Your editorial “The Irish Times view on the inheritance tax debate: calls for a reduction should be resisted” (July 23rd) asserts that changes in inheritance tax on budget day are “not the right thing to do” in “a system where wealth and assets are lightly taxed . . . either from the viewpoint of fairness or the long-term stability of the public finances”.
The editorial entirely ignores that inheritances derive from the assets of a tax-compliant deceased, that is, already taxed income, savings and assets. Also ignored is that the top 10 per cent per cent of Irish earners account for almost two-thirds of income tax and the universal social charge (USC). Of course, the tax applies to assets inherited from all who live in our State, whether their taxes derive from the top 10 per cent of earners or not. Inheritance tax is simply unfair double taxation.
The editorial assumes that the State should arbitrarily steal a portion of already taxed assets simply because a deceased financially assists a child, grandchild, nephew, niece, another family member or a close friend and that the tax significantly benefits the public finances when it does not. The tax wrongly treats a portion of a deceased’s assets as the Criminal Assets Bureau rightly can treat the entirety of criminally acquired assets.
Most people who have worked hard during their lifetime and managed to lawfully accumulate some assets wish on their death to provide some financial help or stability to family and or friends. Generosity is a social value that should be encouraged not taxed.
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The fallacy on which the editorial is grounded is that inheritance tax taxes wealth. In the overwhelming majority of instances, it simply enables the State expropriate a significant portion of a modest sum given to a bereaved beneficiary. One-third of any sum over €32,500 left to a grandchild, niece or nephew and a third of any sum above €16,250 left to a friend is taken by the State.
Should a child inherit a deceased parent’s modest home valued less than the current median value of homes in Dublin, the tax kicks in unless the child continuously resided with the parent for three years prior to death.
This is not a tax on wealth but a resentment or jealousy tax, grounded in anachronistic socialist dogma, which attaches no value to responsible living, financial planning, hard work and generosity.
Your editorial says that if there are obvious anomalies or areas of unfairness, they should be addressed. Our detailed pre-budget submission to the Minister of Finance showed that the tax is riddled with anomalies, unfairness and contradictions. It also contains agricultural and business reliefs which apply to a minority of inheritances and facilitate the payment of minimal inheritance tax upon the inheritance of substantial wealth.
The tax should be abolished, as has occurred in a variety of states throughout the world. If not abolished, the budget is the traditional and appropriate mechanism for radical change in both substance, exemption limits and the tax rate. – Yours, etc,
ALAN SHATTER,
Chairperson,
Inheritance Tax Reform Campaign,
Dublin 16.