Inheritance tax: An age-old dilemma for Thai lawmakers

[wiki12]

 

 

 

Surely if the inheritor has no income or substantial savings they should be exempt.
You could even argue they didn't expect or want to have the land so why should they have to pay, even for something that came from a private individual and not state (i.e. publicly funded) source.
 
Less taxes for everyone will make any economy flourish, taxes are stolen, 'mis-allocated', abused, lost and wasted, and even worse, they are used to make government bigger.
 
What does government do to improve economies?
 
Answers on a postcard please!
 
 
 

 
- provide roads and infrastructure
- provides for a legal system to solve disputes (business)
- enters into treaties with other states for better trade
- healthcare (without good healthcare you have a bad populace)
- provides schooling
 
Taxes are never fun but necessary, and inheritance tax is normal if you don't want an inheritance or cant pay for it don't accept it.
 
Though I am normally against inheritance tax as i feel its double taxing, in Thailand with its rich that pay little tax its a real viable option if they have a 5 million threshold or so. 
 
 
 
 
You've made me think a bit here Robblok, my head is hurting!
 
Roads, private companies can built them and charge users as they use them, that would reduce tax, just pay a fee be it by mile or however.
 
Legal systems are made by lawyers, 99% of politicans are lawyers, they can look after this side of things granted. Of course we don't want a Group 4 or rococop (OCP) scenario where private companies own the police.
 
Trade agreements, if government didn't tax imports/exports this would be unneccesary.
 
Healthcare, even the Swiss (no offence to them!) are all private, the UK NHS is full of managers instead of doctors and nurses, let people decide what policy they want to buy, hospitals would be more efficient this way.
 
Schools/education is important, what's wrong with apprenticeships? Most degrees these days are not used for all their capabilities, industry can certainly contribute towards the cost of some forms of education if they stand to benefit.
 
I'll say it again, tax goes to the government and not too the poor. Cut taxes, let business grow, there are more jobs, more money in circulation and everyone benefits.
 
Inheritence tax is another tax on a property that was bought and paid for with earnings (toil and sweat) which were taxed at the time, how is it fair to tax it again?
 
How about after next christmas everyone has to pay the tax man for the gifts someone else gave them?
 
 

Please read this article;
http://www.businessinsider.com/study-tax-cuts-dont-lead-to-growth-2012-9

Strong evidence that, in regards to the USA where the 'low tax = economic growth' belief is very prevalent, this is factually incorrect.

Lower taxes only lead to higher inequality.

 

 

Look at France, big taxes on the super rich, they've all moved to London and that place is booming, lots more jobs for the service industry, car sales are up etc etc. The rich spend more and create work.

Perhaps the rich will get richer proportionally but if the poorest of folk has a raise in their standard of living is that bad?

Tax people too  much and the golden goose will be killed, the ones who can flee will. Never before have so many US citizens surrendered their nationality, why? Tax.

 

[arthurwait]

 

 

5m as a cut off, and tax it in stages like they do income. Not so difficult when you think about it.

 

There is no problem with how to do it, this is about whether it should be done.  A bit more difficult if you think about it.
 

 

 

How so? It's just about getting the levels right so you don't tax those who can least afford it. 

 

What the country can't afford it to let the '1%' (particularly Thai Chinese)  who have been steadily increasing their land holding all over the country to continue to hoard as they have been.

 

Tax land that sits idle without being used. Exempt that land from tax if it is turned into a public green space, even if only temporarily.

 

 

 

 

 There is worthless land everywhere in Thailand because there simply is so much land. If people need land they can buy this.

 

A public green space ?  There's loads of them but most Thais aren't interested in going anywhere near them or anywhere that doesn't have air con.

[bkk_mike]

I believe in an inheritance tax. The rich have successfully gotten the tax reduced in my own country but this is income and should be taxed as such. So many rich Thai pay no taxes at all from what I hear from rich Thais....

 

I believe that things like family farms, where several generations of the same family work alongside each other, shouldn't be forced to sell part of the farm simply because the person whose name is on the title deeds passes away.

 

I also believe that the threshold should be set high enough (or an exemption set) for the family home where the kids live in it. i.e. It's common in Thailand for several generations to live in the same house, and if that house is in Bangkok, the house can easily be worth more than 5m baht. Should the other family members be forced to leave "their" house after holding a funeral for the family patriarch.

 

"Family" farms where the children don't work there, or homes where the children don't live there - fine - tax away...

[bkk_mike]

Evidently the Thais have given up trying to tax personal income and instead are focussing on assets and consumption.  

 

I mean when you pay 300% on a bottle of wine and 250% on an imported car, what is this other than a consumption tax.  They have obviously worked out that the tax collection system is so corrupt when it comes to personal income that they can't be bothered to even try to get more that way.  So bring it on.  Land tax followed by inheritance tax.  

 

All fair and above board to me as long as it is set reasonably.

 

If you remember when Thaksin sold his company, he paid no tax on the sale.

And the courts ruled it wasn't illegal, because Thailand's tax rules are so riddled with loopholes.

 

However, it was the "straw that broke the camel's back" as far as getting people to protest against him, leading to his downfall in the coup in 2005.

 

And yes, I agree, that part of the reason imported cars are so expensive in Thailand is because it actually works as a method of collecting tax from the wealthy...

 

To get around tax evasion/avoidance, you need to have savvy lawmakers, like in Hong Kong, where with a nice letter signed by your landlord, confirming your rent, you get a small tax rebate on your rent (and the tax office gets the details on the rental income of the landlord, which they can then use to verify his tax return).

[firefox999uk]

Off topic a tad, but tax related.

My old man gets a pension from the army (22yrs service) and one from the cops (20yrs) and probaby a bog-standard government pension. I don't know how much it is but I bet there's 2 or 3 minimum wage earners working just to pay his retirement fund.

Cut taxes and make people look after themselves instead, why should others have to pay for his (and others in this way) I'm sure these pensions won't be around much longer though as the financial crisis is set to worsen, watch the taxes go up though!

 

So youre saying that your old man didnt pay anything into his pension fund.....

or pay any National Insurance contributions.

 

funny that, because i had to pay 12% of my wages every month for 30 odd years

 

into my pension fund, which incidentally is the same pension fund as the police.

 

 

 

Have a Nice Day.

[nisakiman]

I have never understood why the people simply allow their Government to tax them at every opportunity they can. You work and earn money and they tax you on it. Put any in the bank and earn a little interest and they tax you on it. Spend any of the money they have already taxed and they tax you again and then when you finally die they want even more of it. 

If people actually sat down and worked out just how much of their hard earned cash the Government takes there would be riots

 

In the UK, 'Tax Freedom Day', that is to say, the day on which peoples money started to go into their own pockets rather than the government coffers, fell this year on 30th May.

 

 

The date is calculated by measuring taxes and National Insurance Contributions as a proportion of the UK's net national income – producing a figure of 41.5pc, or 150 days as a share of the year.

In France, the equivalent date does not fall until July but in the US and Australia it comes as early as mid-April.

Institute director Eamonn Butler said the calculations included every tax, including stealth taxes – income tax, national insurance, council tax, excise duties, air passenger taxes, fuel and vehicle taxes to name a few – and show just how long the average person has to work to pay their share of them all.

He said: "The stark truth is that this burden costs us all 150 days of hard labour every year. That's not how long a rich person has to work – it is the time the average person must labour for the tax collectors."

 

http://www.telegraph.co.uk/finance/personalfinance/tax/10087413/Today-is-tax-freedom-day.html

 

I personally see inheritance tax as a pernicious double tax. However, having said that, it is an inescapable fact that those with the most money pay proportionately the least taxes, as they can afford the best 'creative' accountants to minimise their liabilities. If inheritance tax is to be deployed, then the entry level should be set quite high - certainly considerably more than 5 million Baht - so the scenario (as mentioned above) of a family home of several generations in central Bangkok doesn't fall into the tax net.

[Geordie59]

I have never really understood why if you have paid tax on money when you earned it you (or your dependants) should pay another tax when you die.

I do know that no country has ever taxed it's population into wealth.

[arjunadawn]

Personally I have always had some sympathy for the theory that humans enter this world as babies with no assets and entirely dependent, and with a normal lifespan should leave again with no assets and again entirely dependent, the state having taken on the role once taken by  "family" and spent the first 20/25 years nurturing and educating a productive member of society and the last 20/25 years using that persons accrued wealth to fund a gradually declining and dignified end to life.

 

However this argument fails to take account of life spans cut short early (with dependents left with no support), or human nature which mean some people will just refuse to become productive members of society, and of course forces populist governments to enact social safety nets which in turn must be funded by taxation.

 

The poster above who spoke of New Zealand's 1980's Labour government, the Finance Minster mentioned was a proponent of cradle to grave government intervention and "come into the world with nothing, leave with nothing" thinking

 

I first want to state I am not trying to provoke you; I am genuinely curious. Is this a real theory or yours? Doesn't matter, though. Most people don't even think enough to develop a theory of such weighty issues, so congrats to you- whether I agree or not. Philosophically, for my own life's priorities, I see your point. I came into this world with nothing and I will go out with nothing! But that is only philosophically. Rich or not, practically, I leave my family what the law calls an estate. I leave both bills, perhaps, and life insurance. I leave real property, and personal effects. Indeed, history is more defined by these behaviors then what you suggest in theory. People generally do not liquidate their effects prior to passing simply to encourage the next generation to be self made, or meet the requirements of a theory.

 

A common refrain for polling in the USA, for example, is "Are you better off than before?" and when asked what each generation wanted most for the children it is usually "A life better than my life?" These generations sought to transfer the product of their labor to their children as has Man in general since the dawn of time. It really is a recent invention of an ever increasingly hungry nanny state mentality that seeks to redress natural inclinations in human behavior into coerced redistribution of wealth. As with other programs similar to this the [un]intended consequence is to reduce industry and condone mediocrity. When the man who puts forth little effort is assured both equal opportunity and equal outcomes the entire principle upon which advancement pivots is corrupted. Policies like this assuredly destroy society. Estate taxation is just awful.
 

[arjunadawn]

 

I have never understood why the people simply allow their Government to tax them at every opportunity they can. You work and earn money and they tax you on it. Put any in the bank and earn a little interest and they tax you on it. Spend any of the money they have already taxed and they tax you again and then when you finally die they want even more of it. 

If people actually sat down and worked out just how much of their hard earned cash the Government takes there would be riots

 

In the UK, 'Tax Freedom Day', that is to say, the day on which peoples money started to go into their own pockets rather than the government coffers, fell this year on 30th May.

 

 

The date is calculated by measuring taxes and National Insurance Contributions as a proportion of the UK's net national income – producing a figure of 41.5pc, or 150 days as a share of the year.

In France, the equivalent date does not fall until July but in the US and Australia it comes as early as mid-April.

Institute director Eamonn Butler said the calculations included every tax, including stealth taxes – income tax, national insurance, council tax, excise duties, air passenger taxes, fuel and vehicle taxes to name a few – and show just how long the average person has to work to pay their share of them all.

He said: "The stark truth is that this burden costs us all 150 days of hard labour every year. That's not how long a rich person has to work – it is the time the average person must labour for the tax collectors."

 

http://www.telegraph.co.uk/finance/personalfinance/tax/10087413/Today-is-tax-freedom-day.html

 

I personally see inheritance tax as a pernicious double tax. However, having said that, it is an inescapable fact that those with the most money pay proportionately the least taxes, as they can afford the best 'creative' accountants to minimise their liabilities. If inheritance tax is to be deployed, then the entry level should be set quite high - certainly considerably more than 5 million Baht - so the scenario (as mentioned above) of a family home of several generations in central Bangkok doesn't fall into the tax net.

 

 

Argh! Confuses me a bit inside because I agree with you too- though I oppose inheritance tax. If people like me and you see this tax as pernicious, but we allow for it because (as another suggested) the rich will get richer and the wealth will consolidate, then what are we saying about our values? We agree its wrong but we should do it? Its not wrong because...? Perhaps if politicians declared it for what it is, a double tax, it would be more palatable because its at least honest?

 

[Thai at Heart]

By the time exclusions and gifts are removed from it only about one in 13 estates pay taxes in the UK.

Hardly a tax in all and sundry.

[mariner16]

 

Personally I have always had some sympathy for the theory that humans enter this world as babies with no assets and entirely dependent, and with a normal lifespan should leave again with no assets and again entirely dependent, the state having taken on the role once taken by  "family" and spent the first 20/25 years nurturing and educating a productive member of society and the last 20/25 years using that persons accrued wealth to fund a gradually declining and dignified end to life.

 

However this argument fails to take account of life spans cut short early (with dependents left with no support), or human nature which mean some people will just refuse to become productive members of society, and of course forces populist governments to enact social safety nets which in turn must be funded by taxation.

 

The poster above who spoke of New Zealand's 1980's Labour government, the Finance Minster mentioned was a proponent of cradle to grave government intervention and "come into the world with nothing, leave with nothing" thinking

 

I first want to state I am not trying to provoke you; I am genuinely curious. Is this a real theory or yours? Doesn't matter, though. Most people don't even think enough to develop a theory of such weighty issues, so congrats to you- whether I agree or not. Philosophically, for my own life's priorities, I see your point. I came into this world with nothing and I will go out with nothing! But that is only philosophically. Rich or not, practically, I leave my family what the law calls an estate. I leave both bills, perhaps, and life insurance. I leave real property, and personal effects. Indeed, history is more defined by these behaviors then what you suggest in theory. People generally do not liquidate their effects prior to passing simply to encourage the next generation to be self made, or meet the requirements of a theory.

 

A common refrain for polling in the USA, for example, is "Are you better off than before?" and when asked what each generation wanted most for the children it is usually "A life better than my life?" These generations sought to transfer the product of their labor to their children as has Man in general since the dawn of time. It really is a recent invention of an ever increasingly hungry nanny state mentality that seeks to redress natural inclinations in human behavior into coerced redistribution of wealth. As with other programs similar to this the [un]intended consequence is to reduce industry and condone mediocrity. When the man who puts forth little effort is assured both equal opportunity and equal outcomes the entire principle upon which advancement pivots is corrupted. Policies like this assuredly destroy society. Estate taxation is just awful.
 

 

In the context of UK the theory is usually attributed to Beatrice & Sydney Webb of The Fabian Society who influenced William Beveridge who authored The Beveridge Report in 1942 which studied social and economic conditions in the United Kingdom. Suggested that full employment and social security should be universal and cover citizens "from cradle to grave." To finance it the Labour government sharply increased income and inheritance tax. Even Conservatives maintained protections when they took office, arguing that universal coverage counteracted arguments against income redistribution. However the theory was nothing new as New Zealand had already passed into law in 1938 a Social Security Act very similar.

 

The  income gap and disparity in lifestyle of the class ridden society of 1930's UK meant that such social policy was inevitable once UK had emerged on the winning side of WW2, even if the country was bankrupted by the six years of war, the only alternative was class revolution and the violent overthrow of the landed gentry. In actual fact those who were upper class by means of birth were already on their knees, unable to maintain their stately homes and privileged lifestyles, rapidly being replaced by the newly enriched families of industry and commercial billionaires.

 

You are right that man has sought to ensure that his children and grandchildren would have a better life in succeeding generations, however many things changed during the 20th century, better health systems means people now live longer for a start, so in my case although I am 62 and eight years from the natural life span quoted in the bible of "three score years and ten" I still have a 87 year old parent so no inheritance has come my way, what I have I have acquired for myself, my children in their turn are entering their 30's and similarly making their own way in the world, however they have had the benefit of a university education, something which secondary schooling had only recently made available to a fraction of the working class of my generation and was basically confined to the upper classes of my parents generation. There was also in some communities a resistance to the younger generation getting educated and having ambitions which their parents had been denied, grammar school children were derided, girls were told they must leave school as being educated was a waste of time for a future of being a mother and housewife, all this was changed by government intervention providing compulsory education for all, women demanding equality and much more.

 

Seems however that the pendulum is swinging back nowadays and we hear the refrain "the rich are getting richer, and the poor are getting poorer". The wealth did not trickle down as we were told it would in the 1980's in fact it started defying gravity and moving back uphill, so why should the wealthy families of this world give their offspring a head start by buying position and privilege for them, let everyone start their life equal and end their life equal by government providing equally for all at the beginning and end. What happens in the middle is up to the individual, some will be winners and some will be losers, but at least provide a level playing field to be able to complete in the game.

[Thai at Heart]

I have never really understood why if you have paid tax on money when you earned it you (or your dependants) should pay another tax when you die.

I do know that no country has ever taxed it's population into wealth.

 

 

Stats in the UK show that only 1 in 14 estates paid death duties last year and most of that was due to the capital appreciation of property.  

 

So if it is done properly, and allowances implemented fairly, what is being taxed effectivly is above inflation increases in property.  It is hardly as though is impacting the meek and needy.  Yes people should make provision to avoid as much of it as possible, but this is not some pernicious tax on the poor.  And if you count sitting back and making huge wedges of money on property appreciation particularly entrepreneurial, well there we are.

Edited August 6, 2014 by Thai at Heart

[arjunadawn]

 

 

Personally I have always had some sympathy for the theory that humans enter this world as babies with no assets and entirely dependent, and with a normal lifespan should leave again with no assets and again entirely dependent, the state having taken on the role once taken by  "family" and spent the first 20/25 years nurturing and educating a productive member of society and the last 20/25 years using that persons accrued wealth to fund a gradually declining and dignified end to life.

 

However this argument fails to take account of life spans cut short early (with dependents left with no support), or human nature which mean some people will just refuse to become productive members of society, and of course forces populist governments to enact social safety nets which in turn must be funded by taxation.

 

The poster above who spoke of New Zealand's 1980's Labour government, the Finance Minster mentioned was a proponent of cradle to grave government intervention and "come into the world with nothing, leave with nothing" thinking

 

I first want to state I am not trying to provoke you; I am genuinely curious. Is this a real theory or yours? Doesn't matter, though. Most people don't even think enough to develop a theory of such weighty issues, so congrats to you- whether I agree or not. Philosophically, for my own life's priorities, I see your point. I came into this world with nothing and I will go out with nothing! But that is only philosophically. Rich or not, practically, I leave my family what the law calls an estate. I leave both bills, perhaps, and life insurance. I leave real property, and personal effects. Indeed, history is more defined by these behaviors then what you suggest in theory. People generally do not liquidate their effects prior to passing simply to encourage the next generation to be self made, or meet the requirements of a theory.

 

A common refrain for polling in the USA, for example, is "Are you better off than before?" and when asked what each generation wanted most for the children it is usually "A life better than my life?" These generations sought to transfer the product of their labor to their children as has Man in general since the dawn of time. It really is a recent invention of an ever increasingly hungry nanny state mentality that seeks to redress natural inclinations in human behavior into coerced redistribution of wealth. As with other programs similar to this the [un]intended consequence is to reduce industry and condone mediocrity. When the man who puts forth little effort is assured both equal opportunity and equal outcomes the entire principle upon which advancement pivots is corrupted. Policies like this assuredly destroy society. Estate taxation is just awful.
 

 

In the context of UK the theory is usually attributed to Beatrice & Sydney Webb of The Fabian Society who influenced William Beveridge who authored The Beveridge Report in 1942 which studied social and economic conditions in the United Kingdom. Suggested that full employment and social security should be universal and cover citizens "from cradle to grave." To finance it the Labour government sharply increased income and inheritance tax. Even Conservatives maintained protections when they took office, arguing that universal coverage counteracted arguments against income redistribution. However the theory was nothing new as New Zealand had already passed into law in 1938 a Social Security Act very similar.

 

The  income gap and disparity in lifestyle of the class ridden society of 1930's UK meant that such social policy was inevitable once UK had emerged on the winning side of WW2, even if the country was bankrupted by the six years of war, the only alternative was class revolution and the violent overthrow of the landed gentry. In actual fact those who were upper class by means of birth were already on their knees, unable to maintain their stately homes and privileged lifestyles, rapidly being replaced by the newly enriched families of industry and commercial billionaires.

 

You are right that man has sought to ensure that his children and grandchildren would have a better life in succeeding generations, however many things changed during the 20th century, better health systems means people now live longer for a start, so in my case although I am 62 and eight years from the natural life span quoted in the bible of "three score years and ten" I still have a 87 year old parent so no inheritance has come my way, what I have I have acquired for myself, my children in their turn are entering their 30's and similarly making their own way in the world, however they have had the benefit of a university education, something which secondary schooling had only recently made available to a fraction of the working class of my generation and was basically confined to the upper classes of my parents generation. There was also in some communities a resistance to the younger generation getting educated and having ambitions which their parents had been denied, grammar school children were derided, girls were told they must leave school as being educated was a waste of time for a future of being a mother and housewife, all this was changed by government intervention providing compulsory education for all, women demanding equality and much more.

 

Seems however that the pendulum is swinging back nowadays and we hear the refrain "the rich are getting richer, and the poor are getting poorer". The wealth did not trickle down as we were told it would in the 1980's in fact it started defying gravity and moving back uphill, so why should the wealthy families of this world give their offspring a head start by buying position and privilege for them, let everyone start their life equal and end their life equal by government providing equally for all at the beginning and end. What happens in the middle is up to the individual, some will be winners and some will be losers, but at least provide a level playing field to be able to complete in the game.

 

 

Great response; thanks. "Fabian Society.." "why did I cringe when I read that?"

 

Then I recalled something about Shaw and "Wolf in sheep's clothing." A cursory re review of this ideology says it all. It is hardly necessary to consider an extension of their product when the actual substance is so spoiled. Thank you for your response. I now see why I recoiled at the theory. My Best.

[JAG]

Question 1. Who is going to suffer the greatest losses if an inheritance tax is introduced in Thailand?

Question 2. Who are amongst the most enthusiastic supporters of the current regime?

Not going to happen is it!

Sent from my Nexus 7 using Thaivisa Connect Thailand mobile app Edited August 6, 2014 by JAG

[3NUMBAS]

those with the most have control of the puppets on a string lawmakers and judiciary ,the gulf between rich and poor gets wider

Edited August 6, 2014 by 3NUMBAS

[wiki12]

 

Off topic a tad, but tax related.

My old man gets a pension from the army (22yrs service) and one from the cops (20yrs) and probaby a bog-standard government pension. I don't know how much it is but I bet there's 2 or 3 minimum wage earners working just to pay his retirement fund.

Cut taxes and make people look after themselves instead, why should others have to pay for his (and others in this way) I'm sure these pensions won't be around much longer though as the financial crisis is set to worsen, watch the taxes go up though!

 

So youre saying that your old man didnt pay anything into his pension fund.....

or pay any National Insurance contributions.

 

funny that, because i had to pay 12% of my wages every month for 30 odd years

 

into my pension fund, which incidentally is the same pension fund as the police.

 

 

 

Have a Nice Day.

 

 

 Can't say you are wrong there Firefox, however the money paid as tax years ago wasn't paid into a high interest bank account, it would have been immediately spent on things that do not help the economy e.g. nuclear missles, bigger government, pensions for those already retired to name just a few. Indeed the monies were also used to buy more debt from overseas too.

The UK government (like most others) is skint and my point is that since there is no magic bank account with his entitlements in it, others are paying it for him with their taxes earned today.

A colleague of mine is ex Royal Navy, they took the UK government to court a few years ago when they tried to reduce their pensions, luckily they won, this is a sign of things to come, look at Detroit.

 

Back to inheritence tax, it is the same principle as you having to pay tax for the christmas presents you received.

 

[neverdie]

You are born, pay tax and then you die. Somewhere in between the first event and the last event you need to fit as much life in as possible. Don't take any of it too seriously.

MAny years ago, prior to 1978 in Australia they use to apply a death tax (Duty)....so effectively they taxed you after the last event too.

Of course one must file a tax return after ones death, so that any income one made prior to their death can be taxed.......then there's the issue of capital gains and so forth....so you see, even after death they're still at you.

Thailand can see an opportunity here.......they want your money, they need it to assign to special benefits for politicians.

After I die, I'm going to come back and haunt the [email protected] sleeping with the ghost of neverdie at your window. bloody lowlifes.