David Davis: obviously not a quantity surveyor

DD sets a new record for cramming Home-Owner-Ist lies into one paragraph:

It is said the Lib Dems (1) want a "mansion tax" instead [of the 50p tax rate]. Since cutting the top rate will generate revenue, (2) this is a political (3) and not an economic demand (4). It is a tax (5) on bricks and mortar (6) not on wealth, and as such makes about as much sense as a window tax.(7) It would probably hit elderly widows (8) harder than billionaire banker. If was precisely to avoid penalising people who are cash-poor (9) but for reasons of history, family or sentiment (10) still live in large houses that the whole council tax system was designed. (11)

1) It is not "said that", they quite clearly want it.

2) Not proven and irrelevant. The best guess is that it is revenue neutral, i.e. makes some people poorer without making other people richer. We can oppose the 50p rate in principle whether or not it is a net revenue raiser (the top of the Laffer Curve is not where we want to be).

3) Particularly ironic, given his later sentences, see 11).

4) There is every economic argument for taxes on the rental value of land, at which the Mansion Tax is a crude attempt, instead of taxes on income, profits or output. The only counter arguments are political.

5) The Mansion Tax is not a tax, it is a user charge on the community-generated rental value of land, continues in footnote*.

6) Woah! For £2 million, you could build a twelve-bedroom mansion with more ensuite bathrooms that you can count, with underground parking for six Porsches and a home cinema. That's not what we are talking about here. Ninety-nine per cent of homes worth £2m or more are worth that much because of the location value alone.

The fact that the Mansion Tax would not apply to physical houses in some locations but would apply to physically similar houses in other locations is the clue here - it's not a tax on the "bricks and mortar" it's a tax on the location (or the amount of the location they are consuming).

7) A Window Tax is a tax on improvements, it's vaguely land-related but (proveably) a bad tax for all that. Stamp Duty Land Tax is also vaguely land related but that's a bad tax because it discourages efficient use of land; it achieves the same as the Window Tax and the opposite of a Mansion Tax. but DD goes on to say that "we should close the offshore company house-purchase loophole", so he's the Window Tax supporter here.

8) Poor Widow Bogey. Just exempt them and make everybody else pay a bit more, see if I care. By his own admission, the "billionaire banker" can easily afford it (very few bankers are billionaires, there are only a few dozen billionaires in the whole world). Of course, the Poor Widow Bogey illustrate again that a Mansion Tax is not a tax on real wealth, as the truly wealthy can easily afford it.

9) Another Poor Widow Bogey.

10) Aha, that's priceless logic. The more that people want something, the less they should have to pay for it? Isn't one of the basic rules of free markets that people are prepared to pay more for things which are of value to them; and isn't there a behavioural rule that people value things more if they have to pay for them? A childless Poor Widow could be exempted anyway (her estate reverts to The Crown) and if she has, er, family, couldn't they step up the oche? Or is the idea that 'everybody else' chips in a bit more tax to keep these "families" in the style to which they have become accustomed?

11) That's historically a huge great lie, they introduced Council Tax in a hurry because their Poll Tax backfired on them so spectacularly; what he should have said is that they got rid of Domestic Rate to pander to the Home-Owner-Ists.

But isn't this waffling completely at odds with his principles at 3) and 4) that taxes should be based on economic not political logic? What on earth do "history, family or sentiment" have to do with a small-government, free-market, liberal economy? If people are willing to spend their own money on keeping their Poor Widowed Mother in a house that's far too big for her, then fine, each to his own, but don't go round spending other people's money on it.

* And it's not a tax (or a user charge) on private wealth either, as the rental value of land can never represent net private wealth, it only represents real wealth at national level. For example, a good local rail service boosts output, hooray, that's additional national wealth, and those people who can earn more by using the railway earn or create more private wealth. But the money that is transferred from those extra earnings to landlords (or vendors, or mortgage banks, same thing) is not net private wealth as the income and expense net off. It is merely a forced transfer payment, like taxpayer funded welfare and pensions, and I doubt that anybody would count pensions liabilities as wealth.