Ten reasons to hate the Tories (6) Part 2

Point 6 from Cameron's Blueprint for Britain was this:

"We will cut corporation tax to create jobs (1), reform inheritance tax to encourage saving (2) and build a stronger society by rewarding families in the tax and benefit system (3)."

As to (2), WTF?

Being a bit old-fashioned, I always understood "saving" to mean "spending less that you earn and building up cash reserves" i.e. "avoiding debt like the plague", however, as the military wing of the Home Owners' Party, I suspect that the Tories are desperately trying to palm off "owning a home" i.e. "borrowing as much as you can today in the vague hope that the next generation but two will be dumb enough to borrow an even higher multiple of their income in order to be able to buy your home off your heirs at a massive overall profit to your heirs but at a huge cost to themselves" as "saving", which is an abuse of language to say the least.

So I guess that this wasn't quite the way that the Tories mean it.

I agree that Inheritance Tax is, taken in isolation, a totally evil tax which is levied at a savage 40% on the value of estates above the nil rate band (but subject to a thousand exemptions) and raises about £3 billion a year, i.e. bugger all in the grander scheme of things, about half a per cent of total tax revenues or as much as the TV licence fee.

You can't reform it, all you can do is scrap it. But, as Inheritance Tax is a crude form of wealth tax and property wealth is the simplest, most easily taxable and least mobile of wealth, that would give us the golden opportunity to replace the existing eight Council Tax bands (A to H) with twenty six bands (A to Z).

At present, Council Tax on the smallest/cheapest homes in the UK (worth maybe £40,000) is £900 (about two per cent of the total capital value) and Council Tax on the most valuable homes is capped at three times that, £2,700 (about one per cent of one cent of the capital value of a top end mansions). So what's wrong with having twenty-six bands, starting at £100 and going all the way up to £10,000?* This would save people at the bottom a few quid, obviate the need for Council Tax Benefit or Council Tax Discounts and raise the extra £3 billion at the top end as well.

Job done, taxes simplified and collected, economic justice served, what's not to like?

* On a maths point, there are currently eight council tax bands, about 17% apart (1.17^7=3), I'd rather see twenty-six bands 20% apart (1.2^25=100). Or even better, a progressive property tax like in Northern Ireland (a flat rate of about three-quarters of a per cent on total market values without banding) or a flat tax on rental values like Business Rates in the UK. Or even better, a flat tax on pure location values. I can but dream ...