In a capitalist democracy, whether liberal or conservative, too much or too little in the way of lifetime capital gifts or inheritance is bad for anyone. Everyone, not just the few, should have some capital that they themselves have done nothing whatsoever to create, earn, save or make. If anyone deserves an inheritance, everyone deserves an inheritance.
Average wealth of every adult and child in the UK was £85,000 at the end of 2002, according to the Office for National Statistics. It may be about £90,000 now. All British-born UK citizens should receive at 25 the same basic minimum after-tax inheritance of ten per cent of average wealth - a British Universal Inheritance payment of, say, £10,000 less 10 per cent tax - to be broadly financed by reforming 'Inheritance' Tax into a 10 per cent flat tax on the luxury expenditure of giving and bequeathing and introducing a progressive lifetime Capital Receipts Tax on receiving, starting at 10 per cent.
Tax paid on giving would be deductible from tax due on receiving. Unlike the serially flawed Baby Bonds, the amount would be payable to young adults from now on, not in 18 years' time, be independent of parental means or generosity and means-tested by lifetime receipts of capital rather than parental income at the time of birth.
Who, when asked whether anyone they know should receive an after-tax £9,000 coming to them at 25, would say that they should be denied it? British Universal Inheritance would represent a transfer from rich areas of the country to poor areas in each new generation. It would enable and encourage bank accounts, enterprise, higher education, home ownership and opportunity for all. Such an Asset Welfare State measure would help reduce alienation, crime and policing costs, financial and social exclusion, poverty and Income Welfare State needism.
At this dangerous time of increasing inequality and terrorism, it would encourage a stronger sense of national community and identity. It became the policy of the nowadays EU-sceptic original and continuing Liberal Party (not the EU-fanatic LibDems) in 2005. It is a meritocratic, popular capitalist, progressive nationalist proposal, comparable with the Thatcherite sale of council houses, which deserves wider discussion in other political parties.
Yours sincerely
DANE CLOUSTON
Director,
OPPORTUNITY - The Campaign for British Universal Inheritance, Oxford
www.universal-inheritance.org
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