Wednesday, 10 August 2016

Doff your caps to the new lord

Yesterday the Duke of Westminster died. Apparently he had an £8.3bn estimated fortune.

Today's news is that there is a new Duke of Westminster, who has apparently got a £9bn fortune.

This is surprising news to anyone who is aware that there is a terrible estate tax which takes half of the wealth of the deceased.

The telegraph has conveniently told us how the Westminster's can avoid the taxes that 'regular' wealthy people pay using a trust for the benefit of future Westminster's. The Telegraph story isn't about how this is a huge scandal - a massive scam at the expense of you me and everyone else. It's about whether the reader could benefit from such a scheme (answer - no).

If the Westminsters (or Grosvenors or whatever) don't really own the money then they aren't actually worth the £9bn that is reported. But if they do really own the money they should be taxed like anyone else would be. It seems on the face of it like they do own it and benefit from it.

Not only does this structure avoid the £3.6bn in tax that anyone else would expect to go to the treasury but actually tax on unearned fortunes should be MUCH higher than it is. Unearned income is simply the best thing to tax from both an economic and a moral point of view. It doesn't really disincentivise economically beneficial behaviour.

The outgoing duke seemed to be aware of all this himself - showing a sense of humour about his investment acumen. No reports as yet that he decided to bequeath the £3.6bn to the UK treasury though.

It seems feudalism is alive and well in 21st century Britain and it is totally sickening.