Death Duties

I was reading Martyn Bradbury’s post Generation X have been betrayed by neoliberalism and baby boomers.

I agree with many of the points he makes including some of the points made in the article he cites, insofar as economic inequality is a massive issue.

But I do not agree that we can attribute the cause of economic inequality to a birth cohort. The focus on generation ignores or at least treats as ancillary, an obvious cause, namely, speculation or rentseeking. It is not the fact of being born between 1946 and 1964 that destroyed free education, a robust welfare system and affordable housing in NZ. It is the speculative rentseeking behaviour of those – many born within that particular cohort, some before and some after – who were already privileged enough to participate in the speculative markets that created widespread economic inequality and preserved it through the 1980-1990 economic reforms through to today.

But I want to focus on the last statement Bradbury makes at the end of his post:

“A progressive Government coming into challenge this intergenerational theft should first consider reapplying death duties to redistribute all that boomer good luck to other generations”

The argument it stems from is more or less this: Baby Boomer’s (BB) were born into and lived through a unique economic boom that created many opportunities such as affordable housing (really it was cheap land), a robust welfare system and free education. This implies that during and as a result of the economic boom, BB’s were the recipients of the benefits that flowed from those opportunities without the struggle of repaying student loan debt and being priced out of the housing market unlike the generations following the BB’s. Therefore, BB’s should compensate future generations for the loss of opportunities by paying a tax on their death.

I understand why people romanticise about taxing the BB’s on their death (as morose as it is), because when faced with communities living in poverty, there is a whole generation to blame because we are told that BB’s had everything sweet.  In doing so, we neglect the highly unjust tax and monetary system.

Often missing from the debate also is that death duties will likely incentivise the wealthy BB’s (those these arguments usually target) to shift the funds of their estate to offshore tax havens.

So, in my view, changing the tax system to capture unearned income (during the lifetime of the individual) and targeting speculative behaviour is better than waiting for people to die.

An objection also worth noting (although highly unlikely and very slippery slope) is that wealthy BB’s may become targets of vigilante groups in extremely tough economic times, on the perception that they are worth more to society dead than alive [I don’t seriously think this is an issue, but its not an impossibility either].

The idea of death duties, in my opinion, is flawed for three key reasons (although this isn’t an exhaustive list).

Firstly, it is inefficient to (re)introduce another tax into an already complex tax machine.

Secondly, there is a simpler, more efficient and effective tax that could deal with speculative behaviour/rentseeking – land value tax (LVT).

Thirdly, death duties are hardly hallmarks of a progressive government, unless what we view as progressive is retro politics. Death duties were introduced in the 19th Century in NZ and by the mid-1950’s were (mostly) abandoned [see Michael Littlewood’s History of Death Duties and Gift Duty in NZ].

On the first point, I consider death duties inefficient for many reasons, including  that it is difficult to determine (even approximate) how much revenue will be raised in any given year and so that makes planning/budgeting on how to redistribute those funds uncertain. Also, no-one mentions how these funds might be redistributed back to society e.g. citizens dividend? or just paid into the states general fund? There is also the issue that the argument for death tax is intended to assist future generations, yet these are usually the direct beneficiaries of inheritance, so the tax takes from those generations. Although the suggestion is, it is fairer because it redistributes back to all. However, by putting back into the general fund, means that living BB’s still benefit from the deaths of their birth cohort, while the direct recipients have their inheritance taxed.

The uncertainty of fund levels also impacts on administrative costs such as staffing, office space, office equipment – noting that some of the revenue collected would be redistributed back into administrative costs, reducing the pool of funds available for social redistribution.  And the tax itself adds to the growing number of taxes (increasing bureaucracy) the government expects individuals to pay thereby increasing the reach of the state from the life of the individual into their death.

On the second point, the level of tax paid by the community is already excessive. Most people agree we need to reduce the tax burden not amplify it. The focus should not be on how many other taxes we can use to collect the revenue necessary to provide public services. I maintain my position that LVT and abolishing or significantly reducing all other productive taxes appears to be the fairest and most efficient way to deliver public services, alleviate poverty, disincentivise speculative behaviour and incentivise innovation and entrepreneurship.

So discussions on economic inequality ought to focus on how we can collect revenue efficiently and effectively while reducing the tax burden. Without reiterating previous posts, I have written on LVT  here and here and you can also view the LVT page of resources by clicking on the tab at the top of this page.

[Note: There are many Georgists/LVT proponents who do support inheritance taxes, so this post isn’t intended as a reflection of the broad church of Georgism/Geoism]

The third point is that NZ has had death duties in the past and they were abandoned. Calling a government progressive for reintroducing them is like saying a Beatles Tribute band is progressive. Death duties are retro politics. Admittedly, the same claim might be levied against LVT; however, LVT has not existed as a single tax and is currently being researched around the globe as economists and political and non-political groups look for ways to tame the speculative beast and ensure prosperity for all.

I’ll also point out, that some BB’s actually saved their earned income to pass on to their children. They may have struggled through their life for this specific purpose. Are their earnings something that we can justifiably tax? I’m not convinced it is at all.

I absolutely agree that we need to deal with economic inequality – and fast.  I also support the idea of redistribution, provided it is done in a manner that minimises hierarchy rather than reinforces it.  But if we unpack the phrase ‘death duties’ we see that it grants the state a ‘right’ to collect revenue from individuals on their death, since  individuals (would) have a correlative duty to pay the state on their death. Death duties are effectively a death tax, and taxes are collected through enforcement measures exercised through state hierarchy. So, death taxes reinforce state hierarchy through a perverse strategy for managing economic inequality by ‘waiting for people to die’ so that the state can ‘benefit from their death’.

I suspect many readers will disagree with me about death duties; however, my question is what does it say about humanity if there is not even freedom from the reach of the state in death?


End of Life Choice Bill withdrawn

Maryan Street has withdrawn her – End of Life Choice Bill from the ballot box. (H/t Mark Hubbard, blogger at Life behind the IRon Drape)

The Bill proposed to legalise voluntary euthanasia for people with terminal illness likely to cause death within 12 months, or to people with an irreversible physical or mental condition that renders their life unbearable – by their own assessment.

Street reasons that if the bill is drawn during an election year, that it risks not being given proper consideration, but she denies the withdrawal was a result of internal pressure from the Labour Party.

However, its reported that the Labour Party are divided over the euthanasia issue, and it seems rather convenient that when the Party is under pressure to unify that a dividing issue is expunged – perhaps to avoid any perception of disunity.

Euthanasia is a very difficult topic because of the risk of abuse and issues around competency and consent. Some argue that we already practice involuntary euthanasia when turning off life support machines.

I think Street is mistaken to presume that election year is a bad time for the euthanasia discussion, because, the public seem most attuned to politics in election year and are more likely (in my view) to participate in the discussion.

Street was promoting this bill up until as recently as August, so I’m not convinced that she didn’t cave to some internal pressure in withdrawing her bill.

If removing private members bills that might be internally controversial  is part of Labour’s strategy for unifying the party, then they risk annihilating the  democratic reforms the party has already undergone.

Media vs the Coroner

Section 71 of the Coroners Act 2006 is proving somewhat of an impediment to media who are anxious to report on the sudden death of high profile lawyer Greg King.

No person may, without a coroner’s authority, make public any particular relating to the manner in which a death occurred if the death occurred in New Zealand after the commencement of this section; and there is reasonable cause to believe the death was self-inflicted; and no inquiry into the death has been completed.

The resulting speculation from comments posted in the NBR article regarding a highly placed legal source suggesting that Greg King took his own life, is arguably in breach of this section, depending on how widely this section is interpreted. And my own reproduction of this statement might well be too. But I want to discuss some reasons that s71 of the Coroners Act 2006 exists. 
Depending on the type of post mortem directed, it can take a Pathologist up to 8 weeks to collate the final post mortem report for the Coroner. This is because often bodily samples and fluids are taken for further testing to determine any underlying or antecedent causes contributing to the death of the deceased person. There is an assumption that directly after a post mortem examination has been conducted that a cause of death is available. This is misleading. The only report available directly after the post mortem examination is a provisional post mortem result. It is provisional because bodily fluids and samples are often sent to ESR laboratories for toxicology and histology tests, which can take around 6 weeks before those tests, are complete.
So why is this important for the highly speculated Greg King case? Because, these are some of the reasons that Coroner’s are wary about making particulars of a death publicly available, there is not enough evidence to determine the cause of death at these early stages in the Coronial process.  
There is also some confusion about self-inflicted deaths and suicides. Note, not all self-inflicted deaths will be determined as suicides. There are many instances in which a self-inflicted death may be accidental.
I am going to list some examples but I wish to make clear that I am in no way suggesting that these examples are speculative in regards to the Greg King case. They are not exhaustive examples either but are for the purpose only of distinguishing where a death may be self-inflicted but not a suicide.
  • Aspiration of vomit – occurs when highly intoxicated persons choke on their vomit in their sleep.
  • Some recreational activities such as bridge jumping resulting in death
  • Self-administered illicit drug overdoses (or substance abuse in general) or medicinal overdoses
Suicides have a very high threshold. This means that there must be substantial evidence to show that the deceased person intended that their actions would result in their death. Some deaths that appear to have intended suicide are found to be accidental deaths; this is because there may be evidence suggesting that while the initial intention may have been suicide, at some point after the action but prior to death the person’s intention changed. An example of this might be when a person overdoses on medication intending to end their life, but then calls for medical assistance.
Again, because cause of death relies not just on physical evidence of the body but also the surrounding circumstances, it is premature and therefore irresponsible reporting to speculate on matters regarding an apparent self-inflicted death when someone is not privy to all the evidence available. This is part of the importance of s71. 
Of course, the restrictions made by the Coroner may be inconvenient for an anxious media, however, the family and friends of a deceased person are entitled to accurate reporting as anything else is likely to be highly distressing during such a sensitive and tragic time. Accurate reporting does not occur when all the facts and evidence are not available, it is an injustice to the family and to the process. 
***RIP Greg King “injustice anywhere is a threat to justice everywhere” (Martin Luther King).

Coronial Inquest: Kahui Twins

By now, the general public will be aware of the coronial findings issued by Coroner Garry (with two r’s) Evans. After some dispute from Chris Kahui and his Lawyer in the High Court, these findings have now become publicly available, albeit with some adjustments.
Whilst many are reappraising the opinions they held about Macsyna King, others are still hellbent on asserting her guilt in the death of these boys.
John Campbell’s interview received mixed reviews on various social media sites – those with open minds reflecting on their part in the demonising of Macsyna King, while others maintained their intial opinions still stand, and that she is ‘guilty as hell’.
Coroner Evans has determined that there is not a scintilla of evidence to suggest that Macsyna was in any way involved in the injuries that lead to the death of her twins. As the Coroner’s job is to determine all the factors contributing to unnatural and suspicious deaths, his determinations are made on all the available evidence from forensic reports, Police Statements, Expert evidence and so on. What the Coroner has revealed, is that after assessing all the information available to him is that the evidence suggests that that Chris Kahui contributed to the death of his twins.
The problem Macsyna now faces is that the many who still find her actions attributable to the boys death will continue to publicly discredit her. Its interesting that in spite of the detailed investigation into the twins deaths, by an experienced and objective adjudicator, with the full assistance of the Police who have an interest in prosecuting persons suspected of crimes,  Macsyna is destined for a life of verbal battering form the self-appointing public judiciary usually found wallowing in the  backwaters of talkback.
I’m not here proclaiming that she is a saint. I don’t know Macsyna or Chris. All I am saying is that the Coroner is the best position to determine her role if any in the death of the twins. If he found her actions to be negligent on the basis of the information he had available to him, then he would have said so. My point is that there is no rational basis for continuing to defame her character in light of the information now available to the public.

The findings can be found here:

Coronial Inquest: Iraena Asher

Public opinion and in particular the media attention in response to the findings of Coroner JP Ryan in respect of the accidental death of Iraena Asher are misguided. It is the role of the Coroner to ascertain the cause of death and any contributing factors to prevent future deaths in similar circumstances and to make recommendations where deemed necessary.
This process is inquisitorial and is not about apportioning fault or blame. The ‘unpopular’ finding relates to the Coroner’s determination that notifying emergency services may have prevented Iraena’s death and this finding was directed at the couple who assisted Iraena in her distressed and vulnerable state. The finding is not suggesting that the couple were required to do more than the good deeds that they did in fact do on that night, it is simply suggesting that there is a chance that if emergency services were involved the Iraena’s death may have been prevented. The point Coroner Ryan was making was for the benefit of the public, that if they find themselves in a similar situation then the best action to take is to notify emergency services rather than taking it upon yourself to provide care and assistance alone.  
Another point raised is that the Coroner ought to have given notice to the couple advising of the findings he intended to make public before actually making them publicly available. The Coroner is required to act in compliance with Coroners Act 2006 and as such it is at his discretion whether or not the findings will be made publicly available. Additionally, it is unlikely that Coroner Ryan intended for his findings to bring about the controversy that has transpired nor would he have come to his conclusions with the intention of causing any distress to the couple that he in fact commended for their actions in caring for Iraena on the night of her disappearance.
The last point I will address is the suggestion made by the media that the Coroner made these findings based on two days of hearing evidence. This is misleading. The investigation starts from the moment the death or in this case the report of the missing person is notified to the Coroner. Prior to the inquest, the Coroner undertakes a full and thorough assessment of the evidence and information provided by the various agencies, family members, friends and so on. The Coroner will then make requests for further information and will look to experts and anyone other person that the Coroner thinks may be able to assist in the inquiry. Coroner’s do not turn up cold to inquests. The finding that Iraena’s death was likely an accidental drowning is not just some assumption the Coroner plucked out of the air. It will be a rationally based conclusion in consideration of all the evidence he had available to him including the two days of evidence heard in the Coroners Court.