Kwasi Kwarteng should scrap inheritance tax to show he means business – The Telegraph

New Chancellor must cull Britain's unproductive and pointless levies to free economy up for growth
The corporation tax rise will be binned. The bankers’ bonus cap will be scrapped. The sugar tax will be gently laid to rest, and the recent rise in National Insurance will be consigned to the section of the history books headed “really bad ideas”.
To paraphrase the old joke about what you call 20 lawyers at the bottom of the ocean, it’s a good start.
When the new Chancellor Kwasi Kwarteng delivers his ‘fiscal statement’, ‘mini-budget’, or whatever the heck they decide to call the thing, he will dedicate most of his time to scrapping stuff.
But why stop there? A quarter of a century after Gordon Brown took control of the Treasury, resetting British economic policy for a generation, there is an endless list of taxes, regulations, and rules that should be scrapped.
Such as? The 45pc tax rate, the limits on entrepreneurs’ relief, stamp duty, the crazy IR35 rules – and come to think of it, inheritance tax as well.
What we really need right now is a bonfire of all the bad ideas of the last three decades. Instead of coming up with new policies, the UK would very quickly be in a far stronger place if we could simply get rid of all the bad old ones. 
In his first major statement as Chancellor, Kwarteng will, quite rightly, put to rest the high-spending, high-taxing era of Conservative policy-making. Alongside details of the energy bailout, the National Insurance rise will be reversed, and the punishing increase in corporation tax to 25pc will be cancelled.
And it does not look as if things will end there. We have already learned that the cap on bankers’ bonuses, imposed by the European Union, will be scrapped. And so might the sugar tax. It will be a hatchet job, taking the axe to a whole series of tax rises.
There is nothing wrong with that. It was always crazy to raise both taxes and interest rates heading into what looks like it could be a deep recession, and reversing them is the right decision. But there is plenty more fuel for Kwarteng’s bonfire.
Since the Brexit referendum in 2016, Tory economic policy has been going in the wrong direction, doubling down on higher taxes and more state control. Even before that there was little sign of a commitment to business or enterprise. There are a whole series of really damaging taxes and regulations he could chuck on the scrapheap at the same time. 
First, the 45p top rate of tax. Levied on anyone earning more than £150,000 a year, the 45pc band was always way too high, and when combined with National Insurance charges it means a whole chunk of middle-to-high earners are effectively paying 60pc of whatever they earn to the Government.
You hardly need to be fully signed up to the Laffer Curve, which tells us that higher taxes depress revenue, to work out that is a major disincentive. The top rate should be 40pc, and no higher. 
Next, the lifetime limit on entrepreneurs’ relief. Rishi Sunak made so many poor decisions as chancellor it was sometimes hard to keep up with all of them.
But one of the worst was cutting the lifetime limit on entrepreneurs’ relief from capital gains tax, from £10m to just £1m.
It is hardly going to be a huge business that is only worth a million, and all the evidence tells us that the very best founders don’t just create one business but several.
Allowing anyone who goes through the pain and worry of creating a start-up to keep most of the wealth they create was one of the UK’s best policies. We should put it back to the old limit as fast as possible – and perhaps even take it up to £20m.
Thirdly, inheritance tax. A levy that was designed for the genuinely rich has steadily turned into a tax on anyone who happens to own a house. Absurd rules that allow you to give away anything so long as you live for another seven years create huge stress for elderly people.
We should simply scrap it, and replace it with a £1m tax-free lifetime limit on gifts and tax anything above that at 10pc. We would raise more money, and more fairly as well. 
Fourthly, the bonkers IR35 rules. The Revenue has used these regulations to hound the self-employed, with a diktat that those affected are classed as employees, even if they have all the worry and stress of looking after their own pensions and taxes. The result? A huge fall in the numbers of people working for themselves, which is only making labour shortages even worse.
Finally, stamp duty on property. For decades, we had a very simple system. When you bought a property you paid 1pc to register it.
Now we have a bewildering mess of different rates, depending on whether it is a first or second home, whether it is let out, whether you are British, and whether it has one of those smart-looking islands in the kitchen (OK, I might have made that last one up, but you get the idea). It has been a disaster. We could just go back to the 1pc rate. 
The list goes on and on. The plastic bag tax. Air passenger duty. The higher rates of car tax. We have spent 30 years cluttering up the system with endless levies and charges, none of which have made the economy more productive or done anything to increase output.
With his first major statement, Kwarteng will start to incinerate at least a few of them. Once he gets started on that, he should just keep going.
If the new Chancellor just reverses all the mistakes of the last 30 years, even without coming up with any ideas, the UK economy will be in a far better place.
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