Inheritance tax
The Conservatives big announcement at the start of their conference was a pledge to cut inheritance tax. A lot of the discussion over this has been about how few
(or how many) people will actually benefit from it. That's a discussion for somewhere else - here on UK Polling Report we don't care whether something is intrinsically a good or bad idea, we only care what the public think about it and how it's likely to affect public opinion.
Polls consistently show that inheritance tax is surprisingly unpopular even when compared to other taxes - I've posted before about it and it never fails to surprise me. Firstly it is seen as unfair. A Populus poll for the BBC back in 2006 found only 25% of people thought "having an inheritance tax on the value of the assets people leave when they die" was fair. A MORI poll in 2004 fund 69% of people thought it was unfair to tax property after death.
So what, you may say, most people don't like taxes anyway, what matters is whether it is seen as more unfair than other taxes. A YouGov poll for the Taxpayers Alliance earlier this year asked people to say whether they thought particular taxes were fair or unfair on a scale of 1 to 5 -
1 being very fair, 5 being very unfair.
Inheritance tax came out very near the top - 65% of people thought inheritance tax was unfair, just behind council tax on 67% and ahead of the BBC licence fee on 63%. Compare this to Air passenger duty 45%, income tax 41%, national insurance 34% and taxes on cigarettes and beer 29%. In other words, no one likes taxes, but people think it is fair to tax people based on their income, and based on doing things that are bad for them or the environment. They don't think taxes like the inheritance tax or council tax are fair.
Does that mean people would like to see it go? In Populus's 2006 poll they asked if people would prefer inheritance tax to be replaced by an extra penny on income tax, 59% of people said yes. 76% said if there must be inheritance tax, it should affect only the very rich. A YouGov poll last November asked people what they would about various suggested tax cuts - 70% approved of the abolition of inheritance tax.
Once again, it's easy to tell a pollster you want to see a tax repealed or cut - would they prefer to see inheritance tax cut rather than other taxes? An ICM poll for the Taxpayers Alliance last summer asked people to rate different taxes on how much they'd like to see them cut - again, unsurprisingly people wanted them all cut, butthe interesting bit is how they compare to each other. The tax people wanted to see cut most strongly was council tax (also the one they see as most unfair). It was followed by inheritance tax - a cut in inheritance tax being more popular than an basic rate income tax cut or an increase in personal allowances.
It's strange that a tax that affects so few people each year seems to be so resented. I suspect it is unpopular not because people actually pay it, but because they imagine they might have to pay it one day. People hope they might receive a great big inheritance one day or, less morbidly, that they'll be in a position to leave their children financially secure when they leave, they look at house prices now, think how high house prices might actually be when the day finally comes when the lawyers are looking at the value of their estate (or their parents' estate), and they don't like the thought of giving lots of it to the government.
So - that's answered the first part. An increase in the threshhold of inheritance tax is likely to be popular. On the second part of the question -
will it change public opinion? -
I should add the caveat that just because something is popular, doesn't mean it is an important issue for people. Inheritance tax is unpopular yes, but is it the sort of issue that really decides elections? Nope.
