At the recent UK Tory party conference George Osborne shadow Chancellor of the Exchequer proposed increased taxes on aviation with the aim of reducing carbon emissions. The interesting extra included was a ‘family fund’ that would match these taxes with tax cuts for families. This is central to the ideas in The Free Lunch (pp.65-68) where the raising of taxes on resources, that is, green taxes, is proposed along with reductions in conventional taxes. Another idea from The Free Lunch and the Tory Party is to protect back gardens from the wholesale high density development that is becoming the norm for new houses. See chapter 5 for a critique of this policy to provide ‘more environmentally sustainable’ cities and towns, (especially pp. 72-79).
The Tory Conference proposal to raise inheritance tax (IHT) to start at £1m was, within days, taken and modified to £600k by Labour Chancellor Alastair Darling in his Autumn Statement. The Free Lunch proposes the elimination of inheritance tax on property altogether (pp. 65,67) following the annual levy of the green taxation on the value of all land including that of homes.
What will now happen with these raised IHT limits is that the huge rises in land values linked to most homes will escape any tax. The families of homeowners will keep the valuable unearned ‘free lunch’ that renters of homes never have to pass down to their families. However this IHT reform is a good start as it clears the decks for introducing an annual land value tax. It would be difficult to launch an annual land value tax with the threat of a low IHT limit still around to raise the opposition of the vast mass of home-owning voters.
The Free Lunch proposes another idea to ease the passage of such a controversial tax, based on bringing greater fairness. Visit www.the-free-lunch.com , read the book.
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