Death duties are back

on the agenda it seems. The newly appointed head of the inaptly named "Productivity Commission" apparently believes we should reintroduce them. 

They were abolished in Downunder during the eighties. One state abolished them and the other states, fearing an exodus to the state in question, soon abolished them as well. It made sense.

Death duties are hated, loathed and feared. Reintroducing them would be highly unpopular but a government desperate for money might well consider it.

It is all very well to argue "there are no pockets in a shroud" but as a child I remember a woman who had worked very hard helping her husband build up a family business losing it to death duties. Quite how that happened I do not know but I do know the local MP came to see the Senior Cat about the situation. There was even a possibility the family would have nowhere to live. I know the Senior Cat wrote a reference for the woman in question. Like the MP, who worked hard to get the state legislation repealed, he was angry a grieving woman with children should be left in that situation. 

It was always an issue for many farmers too. They would work hard building up the productivity of the farm but knew that much of it would end up in hands of the tax man. Their assets were not able to be passed on to the next generation in the way that some city dwellers passed theirs on. 

I remember the "assessors" coming to look at the equipment in the workshop of my maternal grandfather. The workshop, a very large structure, was on the same site as the house. My maternal grandmother, a difficult woman at the best of times, was hysterical. My mother was trying to calm her as Mum's brother showed them around. It had to be done but it was cruel. There was no money in the bank at the end of it even after all but one of the small metal lathes was sold.  My brother and I witnessed all this. Later we realised, if relations within the family had been better, much of the equipment could have been put in our uncle's name and death duties would have been much lower. My grandmother would not have spent the next two (and last) years of her life on a tiny pension. 

You had to know how to work the system of course. Wealthy people were often much better off. Assets were passed on at appropriate times or family trusts were set up and death duties were minimised by people who knew what to do. The system simply did not work in a fair and equitable manner.

There are any number of people now who cheerfully say they are "spending the kids' inheritance". Yes, they often are spending money which might otherwise be passed on to their children. If their children are independent why not? Spending the money undoubtedly helps the economy. At the same time they can do so knowing that what they do have left will, if that is what they wish, go to their children. They won't leave their children struggling to sell what assets they have left in order to give the government money. 

And they won't leave a woman who has worked hard to build up a family business destitute.