I posted Cameron's full "Blueprint for Britain" yesterday.
Point 1 was, "We will work with councils to freeze council tax for two years - saving more than £200 for the typical family."
Apart from the fact that "work with" falls far short of a guarantee, it reminds me of a gimmick that Labour thought up yesterday to try and avoid a humiliating defeat in London, namely, to, er, freeze council tax. The promised (but in no way guaranteed) £100 per household per annum "saving" pales into insignificance compared to the additional £400 VAT and £100 NI that a "typical family" will have to pay if the planned rises elsewhere in the tax system go ahead.
If the government wants councils to stop wasting money (and I'm sure most voters do), then why not scrap as many centrally imposed targets and regulations as possible; reduce Whitehall grants to local authorities (how about a flat sum per person of £500 or £1,000 per person?); reduce nationally collected taxes (VAT, income tax etc) by a corresponding amount; and tell councils that if they want to spend more they can collect it themselves?
We know that, rightly or wrongly, there is a huge opposition to property taxes in this country, so the chances are, councils would reduce spending to stuff that people actually agree is necessary. Like Peter Davies is doing in Doncastle.
Or as Brian, follower of Deornoth, put it, "Excuse me being stupid, but how does 'freezing' council tax save anybody money?"
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6 comments:
One poll, by Angus Reid Strategies ,shows 76% support for the Cable mansion tax,so taxes on property are spinnable as long as they leave Mr Average alone .The thing to do is promise those with average value houses they won't pay any more,then shift onto land values,presented as a minor technical amendment to Council Tax, ostensibly to tax all the equivalent sites with unused planning permissions.Somebody like Cable could spin this landwards shift as" we are not after the hard-working families but after the idle speculators who sit on the same value of land that you do but they won't build on it to provide your children's homes."
Bob's your uncle.
"...but they won't build on it to provide your children's homes."
Except we all know that the homes don't go to our children, so much as to other people's children, or to property speculators...
DBC, yup, even if we only shifted to a PPT (like in Northern Ireland) and applied the same rates to vacant and under-used plots, we'd be halfway there. That'd probably save the mythical "typical family" about £100 a year.
JM, don't worry - more houses = lower house prices.
The Mansion tax is really a further transfer of wealth from the south east - where public services are also very under funded - to Labour heartlands.
Money circulates - move it away and people suffer, not just the well off.
That was never going to play well in the seats the Lib Dems have to defend.
It was a very daft move on their part.
MIAs, daft it may have been to try and make a stand against the tide of Home-Owner-ism, but let us imagine that we absolutely have to increase tax revenues from wealthier people by £1 billion (for whatever reason).
Which is the better way of doing it:
a) Increase higher rate tax to 50%, which they claim would raise £3 billion, but if more people emigrate and fewer emigrate, net gains might be only £1 billion (let's say), or
b) Have a 0.5% "Mansion Tax"?
Think about it:
If we go for option a) if people in mansions worth £1m plus want to sell them, they will be selling them to people who are well in to the 50% income tax bracket; but if the latter see their income fall by up to one-sixth (i.e. instead of keeping 60% net they only keep 50% net), won't the selling price of such mansions tumble by about a sixth?
Alternatively, we can go for b) and leave higher paid people paying 40% tax and have a 0.5% mansion tax, which will reduce the selling price by about one-tenth of the amount by which it exceeds £1 million. So those in big mansions who are thinking of selling up should prefer b) to a)* and higher earners should prefer b) to a) and the economy in general should prefer b) to a), so I make that three-nil.
* A 0.5% annual tax collects about a tenth of the long run average increase in UK residential property values, so it's hardly excessive; and until we scrap IHT the real cost is only 0.3% anyway.
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