Benjamin Franklin once said “In this world nothing can be said to be certain, except death and taxes.” But it seems that these days we pay both at the same time. Dying has become an expensive thing to do. And last week, Messrs Cameron and Osborne endeared themselves to the British electorate when they vowed to do something about it. They can’t stop us from dying, they can’t stop us from having to pay tax, but they can try and mitigate against the effects on the two things happening together.

But, here’s a piece of irony for you. Normally taxation, especially taxation that re-distributes income or wealth, is seen as bad for the economy. It hits incentives, discourages the work ethic. Often we have to weigh up these disadvantages, with the morality advantages it brings.

But, or so it could be argued, inheritance tax not only acts as a means of creating a more-even distribution of wealth, it’s good for the economy too.

Mr Cameron’s idea for upping the threshold on inheritance tax to £1 million is a vote winner. The current threshold sits at £300,000, which, according to the Nationwide, is actually below the cost of an average home in London. It seems quite possible Mr Darling will respond, and will tinker with this tax today. Maybe upping the threshold, or perhaps reducing inheritance tax from 40 to 30 per cent.

For many people currently renting, their only hope of getting on the property ladder is through inheriting their parents’ home. Inheritance tax, at its current level, makes this route onto the property ladder a whole lot harder, so in tweaking this tax, our chancellor will endear himself to many people.

Inheritance tax has also been called a cruel tax. It’s unfair on two people who live together, but are not legally partners. For example, the Observer ran a story of two elderly sisters who have lived together in the same home for most of their adult life. If one dies, the other will be forced to sell, because inheritance tax is just too high. Under these types of circumstances it is indeed a terribly cruel tax.

Inheritance tax goes against human nature too. It’s hardwired into us to want to provide a better standard of living for our children – it’s a basic human need.

But then again, inheritance tax helps reduce the extent that uneven distribution spans generations.

Inheritance provides people from wealthier families with huge advantages over others – advantages that many see as unfair.

But actually, think about it for a moment. Economically, inheritance can actually be quite damaging too.

Remember this, by working we create wealth. We make the economy bigger. And we are taxed on this wealth we helped create.

But, through inheriting money we contribute nothing to the economy, and yet Mr Cameron wants to see the first £1 million we inherit free of tax.

Money is the lubricant of society that makes people work and create value. If you receive more money for doing nothing (“inheriting”), then it is not promoting society’s value creation.

Okay, it could be argued that inheritance tax is a double tax. You are taxed as you earn income that pays for assets, and then when you die taxation occurs again as these assets are inherited.

But it could be argued this is not true. Money is not taxed, it is the movement of money from one person or entity to another that is taxed. In any case, much of the wealth that resides in property was not paid for at all, its value was created by a speculative bubble.

But, let’s assume for one moment you do accept the argument that inheritance tax is unfair because it taxes money that has already been taxed. The logical solution would be to replace inheritance tax with capital gains tax – which taxes that aspect of an asset’s value that was not paid for.Well, what do you think? Agree or disagree? Tell me what you think on the editor’s blog at Find.co.uk
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