October 11, 2007

Inheritance Tax Again

I have already argued, a little down the page, that cutting inheritance tax is unwise. It appears the Chancellor disagrees with me. Well I don't merely think that what he has done is bad policy- it is but that's a question for another thread- it is also bad politics. I've summarised the reasons why in this article at Bits of News, the key passages are these though...

The worst thing though about Mr Darling's new announcement though wasn't the bad policy- most governments have many bad policies. It is awful politics though. Mr Darling and his friend, the Prime Minister, Mr Brown are both on the backfoot. They have yielded the leadership of the debate to the conservative party. Mr Brown was humiliated at Prime Minister's Questions on Wednesday, assaulted by his opposite number Mr Cameron. One Tory MP asked Mr Brown whether his imitation of Tory policy was flattery for the Conservative party or a belated attempt at salvation for his political soul. Quips flew across the chamber and the dour Scot in the centre looked unamused by the affair.

He doesn't have anyone to blame though but himself. After-all Mr Brown could have followed his predecessor Mr Blair's strategy. Mr Blair as soon as the Conservatives announced a policy, would describe it as the next thing to National Socialism. Every MP and minister would go around the country repeating the exact form of words in the same way and pressure groups would be invited to write reports substantiating the charge. Then once the Conservatives had been humiliated, bashed into submission, Mr Blair would walk off with their policy if he thought it was a good election winning (sorry sensible and prudential) policy. He perfected the art, and Mr Brown had to do nothing else but follow the template. But he didn't. The Prime Minister panicked- he decided to follow the winds and grab the policy before the Tories had lost the advantage of first proposing it, now he merely looks stupid.

These events undermine two of Mr Brown's key strengths on coming into office. He has a reputation for being a gloomy, boring calculator of a man. However he also has the reputation of being a serious thinker with good ideas about policy and being consistent and determined. He has the reputation of being an adult as opposed to Mr Cameron's adolescent. Well the events of the last week have seen the adolescent start proposing policies that the adult has taken up. Mr Brown's seriousness has taken a blow, if this is a good idea shouldn't he have come up with it by himself. Mr Brown has been shown up as inconsistent as well- attacking a policy minutes before adopting it.

Even if you support abolishing inheritance tax, now was not the time for Labour to do it. They should have denounced the Tories and then waited to grab the policy later. Just like Tony Blair always used to do- how many Labour supporters are wishing that the new man had just a hint of the nous that the old guy used to display in intellectual theft. At least when he did it he wasn't caught red handed, the day after the Tories had bought the policy!


Ashok said...

- Been thinking about this aristocracy/democracy/inheritance tax problem a lot. I think I might have something wholly new on my hands, and if I can develop it here, I could get some essays out of it. -

This post is interesting to me, because when Republicans steal ideas from Democrats and don't give them credit I get mad.

Is politics the pursuit of power only? (cf. Xenophon, "The Education of Cyrus" for "yes;" Aristotle, "Politics" for "no" - Strauss actually says the starting point of Aristotle's Politics is the possibility that unity in thought - each of us comprehending why exactly we're different, and appreciating that - is what politics can aspire to).

Re: the inheritance tax itself. The reason why I harped on aristocracy is the issue of whether or not an inheritance tax is necessary for a democracy. Inheritance in the sense of property might not be necessary for an aristocracy (bloodline might be more important, etc.) So then the issue becomes: What are the characteristics of democracy an inheritance tax affects?

If democracy is universal in scope to a degree (all men have rights), and democracy focuses on an equality of sorts (all men are equal before each other), then we have to ask how an inheritance tax affects both those characteristics. We don't ask how the inheritance tax affects the principle(s) behind democracy, ironically enough. The reason why we don't ask this is because no regime can survive if its principle is followed through completely. A democracy that is too democratic is anarchy, a kingship that invests to much in the rule of one is tyranny, etc (cf. Aristotle).

So I look at the inheritance tax as exacerbating some of the worst tendencies of a democracy - it doesn't push forward a noble equality, but rather a mob mentality, and it undercuts the idea that liberty and property are related.

You, of all people, should be very sensitive to the formulation "life, liberty, and property." That's central in a book where Locke continually says "I have no middle, I'm giving you the beginning and the end of arguments," and right away, in chapter 1, gives a religious beginning (the discussion of Filmur is to reject religious authority), then rejects a political beginning (his list of types of rule is right from Aristotle), then ends with "property is fundamental (as fundamental as security) to political power," which is the rough conclusion of the Second Treatise. "Life" and "liberty," I submit to you, are the beginnings of Locke's considerations, but "property" is the end, probably in the sense of a telos too.

The "life, liberty, property" thing is not a value central to democracy - it's bigger than that. It's a prudential judgment necessary to keep tyranny at bay. Look at what happens when people have property stripped of them by the state, and that goes unchallenged: that is absolutely the mark of tyranny.

Tax anything else you like, incl. incomes. But inheritance is very significant, when the "public" exists to defend "private" outcomes solely. As I said before, our common good is freedom, and strictly speaking, freedom isn't a common good.

So what we need are people who feel devoted to democracy because it allows them to prosper in the fullest sense. I think you can argue for equality via taxation when people are alive, because we don't want to see people bleed next to us when we can readily do something about that. But the only sense of the "ancestral" that ties us to the law of the land is coming from our own families.

I would also submit to you that given the boom/bust nature of capitalism - this isn't exactly a fun job market here in the States - that an inheritance is a very useful thing for setting oneself up in life, and just getting life started. If it doesn't threaten equality of opportunity, why bother with it?

Tamerlane said...

It might be 'bad politics' from a perspective of 'party politics', i.e. from Labour's point of view, but is it not good politics in the sense of a working democracy? The opposition party can actually change government policy by putting pressure on the government with popular policies.

Surely a victory for democracy?

JRD168 said...

I suppose we shouldn't ask our government to make the moral case for something (i.e. inheritance tax) at the expense of losing votes. We could have expected them to fight along for a while with the current policy though surely?