Comment: The tax prize that no government dares claim

In an ideal world, politicians would not have to sit around debating ways to take more money off people. But we don't live in an ideal world. We live in a country that owes £1.4tn and spends over £49bn each year on interest payments, even with global interest rates at record lows.

The idea that the UK can start to make a dent in that debt pile without additional taxation is facile, as some more thoughtful politicians have pointed out. So the question becomes, where is the least-worst place for the additional burden to fall?

Inheritance tax looks ripe for reform. It raised just £3.4bn in 2012-13, largely because only 16,000 estates paid it. That number had looked set to rise as more estates were dragged into the net by rising house prices. But the Conservatives seem intent on doing the reverse, pledging to introduce a £175,000 family home exemption into the nil-rate band on the grounds that hard-working families should not be taxed on their houses.

Under their proposals, somebody inheriting a £1m estate could, under certain circumstances, pay not a penny in tax. But someone earning £100,000 a year for 10 years - the same total amount - would pay over £290,000 in income tax alone at current rates and thresholds. Some families may find themselves wondering what the point of working hard actually is.

Britain's love affair with property means that successive governments have found it especially difficult to work out a fair yet politically marketable way to tax the often enormous increases in the value of residential property over recent years - gains that are in most cases entirely accidental.

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Labour has promised a "mansion tax", a flawed policy that (like inheritance tax) will affect very few households and that is likely to be so riddled with reliefs and exemptions as to be ineffectual. Nobody seems much minded to touch council tax, which is based on property values almost a quarter of a century ago and is enormously regressive.

Many economists favour land taxes, but these are tricky to implement in practice. Until a compromise can be found, it seems that those who bought their homes at the right time can continue to count on bumper and largely tax-free gains, while everyone else wonders where the big tax hit will come - and when that debt will ever be reduced.

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