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The Pamphlet Collection of Sir Robert Stout: Volume 14

The Death Duties

The Death Duties.

It will be seen from the table last given that these taken together constitute a heavy branch of the National Revenue. When compared with the Schedules of the Income Tax, for instance, we find that last year Probate Duty brought £4,103,644, Legacy and Succession brought £3,332,963; total £7,436,607, while Schedule A, at 8d. in the £ on all the Rents of the Kingdom brought in only £5,101,442, and Schedule D, at the same rate, on all the Profits of Trades, £7,502,109; and before we proceed to expose the anomalies in the incidence of the death duties, we deem it a public duty to affirm that the taxation of property at death and inheritance is taxation on a false basis. It is the system of the Robber chiefs of old, who stepped in after the death of a father and said to the son or widow :—"Now, you shall not have any of this man's accumulations unless you buy them from me,"—and that is what is called "Black Mail." Adam Smith long since pointed out that all taxes on the transference of property from the dead to the living fall finally and immediately upon the legatee. Ricardo said the same, adding that such taxes, like those on transfers and deeds, prevented the National Capital from being distributed in the manner most advantageous to society. There is an entire series of fiscal anomalies in the operation of these death duties, but we may point out only a few, viz.:—
1.Many corporations who own real estate escape paying altogether. Several Municipal and Ecclesiastical Corporations hold great landed estates, and the Charity Trusts alone (of which there are 50,000) hold 524,000 acres of land, with a gross rental of more than one and a half millions per annum.
2.The heirs of the great landlords pay but a trifling percentage, and that percentage is levied only on an estimated life-interest capitalized, instead of on the full value of the freehold. The Ducal Estate of £50,000 a year, and which is worth £1,500,000, descending to an heir-at-law aged 64, pays three per cent., or £12,800, Succession Duty but a merchant or manufacturer leaving personalty of the same value would have to pay £45,000 Probate Duty, and another £45,000 Legacy Duty—in all £90,000!
3.Small legacies of money are oppressively mulcted as compared with large fortunes.
4.Grossly unfair advantage is taken of intestacy, mainly to the vexation and detriment of persons of small means.
5.Foreigners holding personalty here escape Legacy Duty, but Englishmen leaving personalty abroad become liable to pay.
6.The scale based on consanguinity acts with cruel hardship upon many of our struggling people! A millionaire's child pays nothing to Legacy Duty for personal estate, but the adopted child of a mechanic pays ten per cent. A man marrying his deceased wile's sister would only pay three per cent, on any properly she might bequeath to him, but if he died first she would be charged ten per cent, on anything he left to her. A legacy from a stepmother pays ten per cent., but a legacy to a stepmother pays nothing—and so on.