Picture what the “obscenely” rich do with their money. Does an image of Scrooge McDuck come to mind? A vault somewhere. A pile of coins. Wealth as a thing that sits.
Almost nobody's wealth sits.
It’s recycled. It's invested in businesses. It's deposited in banks, which lend it to people buying houses and starting companies. It builds things, employs people, funds the awkward early years of ventures that may never work. The rich are not hoarding the pie. Mostly they are trying, with some talent and considerable risk to themselves, to make the pie bigger.
And here's the part that should interest a Chancellor. Every pound that grows becomes taxable again. The pound invested well becomes two pounds, and the government taxes the second one too. Dividends, capital gains, the PAYE of every person hired along the way, Corporation Tax on the profits. People who are good at turning one pound into two are the most reliable generators of future tax revenue this country has. The pie grows.
I've seen both versions up close. I grew up on a family farm that ran hand to mouth. Nothing spare, so nothing invested, so nothing grew, and the tax it generated sat flat for decades. Watch Clarkson's Farm and you see the other version. Taxed money poured back into land, and out the other side come a farm shop, a pub, a brewery, jobs, and a bigger tax harvest from the same acres than they ever produced before.
And he carries the risk of all of it. If it fails, the loss is his.
That's the part nobody says out loud when the state takes the pound instead. The taking comes with a claim attached. The claim is that the government will do more with that pound than the person who made it would have. Nobody ever tests it. And nobody in government loses their own money when that does not turn out to be the case.
We built high speed rail at £84 million a mile in 2007. The current attempt is running at roughly four times that, and half the line has been cancelled anyway. Same country. Different hands on the pound.
Inheritance tax sits at the sharp end of that claim. It doesn't tax growth. It takes the seed corn itself, at the precise moment it would otherwise be handed on and put back to work.
For most of my working life, governments of both colours broadly accepted the bigger pie idea. You could argue about rates at the edges, but the premise held: let wealth compound, tax the compounding. That premise has quietly been dropped. The question now is not how the pie grows but who has more than their share.
It sounds fair. It may even win votes. But a pound taken today is a pound that was never allowed to become two, and you can only take the same pound once. So slowly and surely the entire country becomes a little bit poorer. Fairer, more equal perhaps, but poorer all the same.