Is it Time for a “Death Tax”?

Given there’s not much in the way of fish to fry during our parliament’s extended winter holiday, err, budgetary recalibration, or whatever Team Harper is calling it these days… thanks to the Internets, I’ve taken to watching and listening to a lot more British politics these days.

Aside from the inside baseball cricket, which is always lively and highly enjoyable, especially now as things are warming up in advance of the next general election, some of the issues being raised are quite interesting in the sense they might very well be precursors of future debates here in this country.

Recently, I mentioned the tentative steps towards proportional voting that have been introduced by the Labour government — a comparable move that may well attract considerable support from many people who presently feel alienated from the political process for whatever reason, not least of which, younger voters with less allegiance to traditional parties. Another interesting trial balloon being floated ahead of the upcoming election is that of a so-called “death tax” to fund long-term and terminal care of the elderly.

The epithet is unfortunate, of course, and naturally invites confusion with a completely unrelated debate in the US, albeit one that shares some common roots that seem to run quite deep in conservative soil, so to speak. Anyway… the scheme being considered in Britain, at least as I understand it, would impose a compulsory tax as a percentage of assets levied at the time of death (presumably in addition to the more onerous estate tax that applies only to a small fraction of extremely wealthy individuals) in order to fund healthcare programs for the elderly. Seems like an eminently reasonable idea to me, but as expected, all of the usual ideological divides are quick to surface in the debate.

All that quite aside — great fodder for heated discussion as it is — the primary reason I mention this, and what strikes me as most fascinating, is the glaringly different nature of the debates being waged on our political battlefield as opposed to those currently taking shape in Britain.


8 Replies to “Is it Time for a “Death Tax”?”

  1. CTV coverage of the Olympics was so bad I started clicking around for something to watch. On CPAC, for the first time, I saw the Australian parliament in session.

    They call it Questions without Notice. The Speaker, etc. do not wear the robes and it doesn’t have all the pomp.

    It looked like it was being held in an auditorium.

    No clapping, no heckling. Questions and then answers – what a novel idea.

    One person tried heckling and the Speaker called him out on it.

    Grown ups.

    After watching that and sometimes watching the British Question Time, our parliament is a disgrace.

  2. “You know where the Liberals stand on raiding seniors nest eggs. Whether it is death taxes, or taxing income trusts, a new Conservative government will never let this happen.” Stephen Harper 2006 Election Campaign Promise

    Listen for yourself:

  3. i never like the “tax for specific spending purposes”.

    Actually I’ll revise. i do like the idea of taxing for specific purposes, but governments regardless of their stripe have shown they can’t be trusted to do it consistently.

    The extra revenue always seems to find a way to make it into general revenue.

    And the oft hated phrase does apply here “we don’t have a revenue problem”.

    We keep trying to find ways to sneak around the elephant in the room: which is health care costs in canada will shortly consume 50% of every tax dollar collected.

  4. I’m in agreement with takedeadaim on this one. It’s always one thing to say that a specific tax will go to a specific program, but often is the case that the tax ends up in the general fund to be raided by politicians looking to get (re)elected.

    We had a similar thing here in Minnesota where we successfully sued the Tobacco industry. One of the conditions of the settlement was that that money was only to be used for “tobacco related” programs such as education, prevention, etc. Well guess what fund got raided when the state started having budget shortfalls…

  5. takedeadaim — I would certainly agree with that as a general principle. Unless some specific funding mechanism with an ironclad guarantee as to the disposition of taxation is established, the inbound revenues most usually end up going astray, leaving the coffers of the hapless “worthy initiative” ruthlessly plundered for other purposes.

  6. RT: Agreed, but to me there’s no better example than EI.

    Can there be a more obvious revenue-expenditure link than a universal payroll tax to fund employment insurance?

    What makes it such a great example is that goverments of both stripes had collected enormous EI surpluses for years (not now of course), allowing that surplus to flow into general revenue and fund “insert your pet cause here”.

    In particular, this is something that conservatives have seethed over for years. And in 4 years harper has done SFA over this universal conservative pet peeve.

    Any check and balance system put in place to tie revenue to expenditures would fall victim to the “we did it – no you didn’t” schoolyard argument that would ensue during a budget or election campaign, with the data far too complicated for a regular canadian voter to decide for him/her self.

    this could morph nicely into a conversation about the benefits of simplification of the canadian tax system.

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