Our tax system needs a bold overhaul, not a cut in inheritance tax

Slashing inheritance tax is completely the wrong priority for the government (Hunt warned against cutting tax for wealthy while making stealth raid on 36m workers, 17 November). At a time when ordinary working people are facing the brunt of taxation, cutting a tax that only the most affluent of estates pay is politically, morally and economically wrong.

Reducing the tax will further reward the luck of birth rather than encouraging hard work and innovation. If the government has the fiscal headroom, then reducing taxes on earned income, instead of on wealth, should be its priority.

There needs to be a bold rebalancing of the tax system, and we urgently need to narrow the gap between taxation on earned and unearned income.
Thomas Nurcombe
Researcher, Bright Blue

• Besides the unfairness of making inheritance tax cuts “for a small number of wealthy estates” funded “by higher taxes on the incomes of 36 million people” as you report, there is another powerful reason why tax cuts for the wealthy are a bad idea. They don’t work. A modelling exercise on inequality, growth and unemployment across 18 OECD countries over 50 years found that reducing taxes for the rich produces higher rates of inequality in the long run, but has no discernible effect on economic growth. Tax cuts also tend to increase unemployment in the first four years after implementation.

By contrast, the eminent economic historian Brad DeLong, in his book Slouching Towards Utopia, says that progressive taxation was a key factor in the US’s recovery from the Great Depression in the 1930s.
David Murray

• Just as austerity was a political decision by David Cameron and George Osborne, so also are the options for deploying the unexpected headroom apparently available to the chancellor (What can Jeremy Hunt do with his £13bn headroom in the autumn statement?, 17 November). He should resist calls to use public money to gain partisan advantage – so that’s no cut to inheritance tax and no disproportionate targeting of people who rely on the social security system for support.

Using funds to strengthen the frail and faltering public realm would benefit us all. The case for fixing social care – long promised but still as far off as it has ever been – ought to be at the top of any wishlist.
Les Bright

• What alternative reality do Jeremy Hunt and the Conservative party inhabit? Has Hunt seen the state of our local authorities, the services they provide and the fresh cuts to those services that are approaching? If circumstances allow him a few billion more than expected, might he not at least consider the idea of using the extra cash for things that are desperately needed by ordinary people, rather than the already wealthy?
Richard Baynes
Blanefield, Stirlingshire

• Neither the Institute for Fiscal Studies report nor journalists seem to recognise the inheritance tax anomaly of the single, childless testator. We too would like to benefit family members and loved ones, but for us (or rather, our beneficiaries), inheritance tax begins at £325,000 rather than the much-quoted £1m. Time to level the playing field, chancellor.
Val Seddon

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