A few days before George Osborne’s inheritance tax announcement at the Tory party conference, there was a gathering in Oxford of leading experts on the tax. They agreed on two key points. First, that inheritance tax could be robustly defended on moral and fiscal grounds, and second, that there was no chance any major party would seek to radically reduce it. So much for the experts.
In the wake of the government’s copycat announcement that it was to double the inheritance tax threshold for couples, Polly Toynbee, who was at the Oxford seminar, wrote that it was “the week that social democracy ebbed away.” Others see the government’s concession as enough to bury the issue and neutralise the Tories. But rather than end the debate, this could be the beginning of a more subtle argument about inheritance.
Why is inheritance tax so unpopular? Just over half the population agrees with the statement “no inheritances should be taxed.” Of course, most taxes are unpopular, but people generally recognise that they are necessary to pay for the public goods they want. Yet when researchers such as Stuart White and Rajiv Prabhakar ran deliberative focus groups on inheritance tax, they found that people’s hostility barely budged. And this hostility is strongest among those who almost never pay the tax—social groups D and E.
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