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Nothing but brutal robbery

o amount of praise is too high for the government of Premier Alex Scott for ruling that no Bermudian will ever again lose his or her family homestead to death taxes. I should know: my family is about to lose its British homestead to pay the tax on my father?s estate.

Taxing the dead is an age-old practice in Britain. In the Middle Ages, the nobles imposed the heriot, ?a tribute, originally the return of military equipment, later the best live beast or dead chattel, or a money payment, made to a lord on the death of a tenant.?

The noblemen were not exempt themselves. Henry VIII used a stratagem known as Morton?s Fork to tax their estates, which his Archbishop of Canterbury, John Morton, came up with. If a noble lived in luxury and was clearly spending money, then he obviously had so much that he could afford to give a great deal to the King. If he lived frugally, however, and did not appear wealthy, then he must have saved so much that he could afford to give a great deal to the King. Either way, the nobles paid up.

The British custom of removing half, more or less, of every estate makes wealth creation much more difficult. It is the single largest reason why Britain is permanently economically depressed. Those Britons who have had family money down through the generations have done so despite losing half of it every generation. Soaking the rich is a grand tradition among the left wing, and now that Britain has enjoyed 50 years of socialism, taxing the middle-class has become quite a sport, too.

My middle-class parents scrimped and saved for every penny. It was second nature. They were war children, who had learned to eat only if there was a coupon left that week, and never to waste one red cent. My Mum died 12 years ago. My Dad kept what was theirs, and few taxes applied. He died in October 2004, and left a simple estate, with a simple will. He prepaid his taxes, which was kind of him, by buying British Government bonds, and left just those bonds and his house. He paid for the house with taxes that at times ranged up to 97.5 percent of his earnings, although its value increased the longer he took the risk of owning it.

Socialists view wealth accumulation as an obscenity. ?Property is theft,? Friedrich Engels said (although the comment is usually attributed to Karl Marx). Socialist governments therefore set out to torment the bereaved and systematically rob them of as much as possible, dragging the process out for as long as possible.

Houses below a certain value are exempt from the Inheritance Tax, as the heriot is now known, but inflation has made a mockery of that exemption. The tax is 40 percent of the Government?s estimate of the value of everything in an estate above the exemption. In my Dad?s case, it boils down to half his estate, although by the time this is all over, my brother and I will see much less than half.

The taxes on the house could have been avoided, had my father irrevocably given up all rights to his house ? but why should he have? It was his security. He didn?t want to give it up, and we didn?t want him to. My gripe is not about the tax we will pay when our homestead, which we wanted to keep, becomes someone else?s. It is about the manner in which the taxes are levied, and the brutal robbery from the bereaved of what remaining dignity they can muster.

No matter how simple the estate, if it includes a house, the government has you by the financial throat. It must issue a series of permits to allow any of the estate to be released, and it is loath to do that. It intentionally fails to employ sufficient personnel to make the process work. So the years go by, and the estate sits in limbo.

If you?re lucky enough to see movement, you?ll be sorry you did. My father?s bonds could not be used to pay his tax. ?The government?s left hand is in Glasgow and its right hand is in Croydon,? a tax commissioner told me. ?There is no way the government can pay itself.? Glasgow, where the bonds were issued, is in Scotland. Croydon is just south of London, maybe 400 miles away. Socialists don?t use the telephone, the computer or the Internet, apparently.

The whole business was so ghastly that, at one point, I offered to just walk away, and give the whole thing to the Government. The tax commissioner told me, point blank: ?Oh, I wouldn?t do that, if I were you. We would pursue you to the ends of the earth to make sure that the correct process is followed.? Besides, he said, giving the government everything might not be enough. ?You may end up owing us more than 100 percent of the estate, as many do,? the commissioner said, ?and we never give up.?

I discussed personal bankruptcy with a lawyer, as a means of ending the nightmare, but it turns out, oddly enough, that to be declared bankrupt, you must actually be bankrupt. I suppose that?s fair. I could not declare bankruptcy, since I have what is described in legal terms as an expectation, should the matter ever be resolved.

You must pay the tax out of your own pocket before any estate assets can be released. If you have to obtain an open-ended bank loan to pay the tax, that?s too bad. We have had to. Interest on the loan is eating a nice hole in our expectation. The loan is the single most irresponsible financial action I have ever taken in my life, by a million miles, but the Gummint made me do it.

Some Bermudians, who have lived their lives in the local cocoon of comfortable innocence, think income tax would be a great idea for Bermuda, and are actively advancing that agenda. If this column does nothing else, let it show you what happens when governments are allowed to tax you as they see fit. It starts with income tax and ends with law-abiding citizens in mourning robbed of their rightful inheritance in the name of a social agenda.