Inheritance tax here to stay
Posted: 22 Aug 2006 12:15:25 GMT
Since Stephen Byers' comments in the Sunday Telegraph, the Labour Party on the whole has rallied to criticise the former transport minister's calls for inheritance tax to be dropped.
Many senior analysts have also lampooned Mr Byers for what is seen as a short sighted and opportunist interview.
Currently estates valued at over £285,000 qualify for the inheritance tax and this threshold is due to be heightened to £325,000 next year.
Poly Toynbee, writing in the Guardian, stated: "Very few people ever pay inheritance tax. Just 37,000 estates paid it last year, out of 600,000 deaths.
"Byers bandied about the mendacious figure of 1.5 million people now caught by it, arriving at this by crudely adding up the homes of the living worth over the £285,000 inheritance tax threshold."
Pressure on the government to track the level of inheritance tax with house prices is an accepted recommendation.
"If it ever reached anything like Byers's number, any chancellor would of course keep raising the tax threshold," Ms Toynbee added.
Conservative thinktank the Bow Group tabled the idea of abolishing inheritance tax along with the TV licence, stamp duty and other taxes.
This would be replaced with a one per cent levy on a person's home called Land Value Tax (LVT) however, this too was widely criticised as making the situation worse for most middle class families.