From today's Evening Standard:
Nearly £1 billion of the government's national insurance and VAT [increase] has been spent spent on bribing councils into capping Council Tax, so the net effect is to transfer wealth to those who own high value homes.
By Eric Pickles' own admission, a full Council Tax revaluation would only cost a few pounds per home, which would be an ideal opportunity to introduce more bands, so that a back-to-back in Band A costs £100 a year and a £1 million-plus mansion in Band Z costs £10,000 a year.
This could easily generate the extra revenue needed to replace taxes on real wealth (Inheritance Tax, Stamp Duty and the 50p income tax rate), as well as obviating the need for Council Tax benefit on low value homes.
Mark Wadsworth, Chartered Tax Adviser.
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The one above mine was much better, actually:
A scheme allowing payment of mansion tax in equity share would ensure the proverbial "old lady in a big house" would not lose her home through it.
In reply to Malcolm Rifkind's question "Why should homeowners be singled out?", other forms of wealth can be multiplied, but housing land cannot. A tax which would bring London house prices down is a pro-family measure. Aren't the Conservatives supposed to be the party of the family?
Matthew Huntbach
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11 comments:
Excellent. Well done, that man!
Lol at the 'labels'. :)
"In reply to Malcolm Rifkind's question "Why should homeowners be singled out?", other forms of wealth can be multiplied, but housing land cannot."
This is why it's important to emphasise that LVT is a tax on the land, not on the property as a whole. It is easy to increase the value of a house by improving or extending it and it's easy to argue that to increase the tax because of such expenditure is unfair.
I'm beginning to think that the Mansion Tax is another AV - dodge reform by offering the electorate a crap version that won't make any real difference and has many of the disadvantages of the existing system.
D, CD, thanks.
B, unsurprisingly, people like taxes which 'other people' have to pay, so according to some survey, there was 66% support for a Mansion Tax starting at £2 million but only 50% support for a Mansion Tax starting at £1 million.
Apparently, there is also 77% support for taking Child Benefit away from higher earners. And so on (all figures from memory).
Nice one.
We're caught between Wince's pathetic proto-communistic envyism and Pickles self serving home-owner-ism.
It fair makes you want to weep.
Flanders did an interesting article on the Mansion Tax, estimating that it could raise half as much as the 50p rate but from a fraction of the number of people, so hitting those few people harder than the 50p rate does, or something.
The political landscape appears to be shifting towards a Mansion Tax because of the realisation that the 50p rate is counter-productive and a bit of pure envy politics.
How long can it be until people can be offered a free swap of income taxes and land taxes?
L, in defence of Vince, he has said time and again that he's happy to trade 50p rate for the Mansion Tax. The morbidly obese one just wants to pander to the South East Tories - he;s overcompensating of course because he is from Bradford.
BE, that's another thought experiment - cap people's tax bills at whatever their LVT would be. Two thirds of people would probably pay less.
Mortgage interest relief on income tax was a bad idea. However I'm inclined to think that property tax relief might actually be quite good. Inasmuch as it would make the transition from income tax to LVT smoother since an increase in LVT due would automatically be balanced by a drop in income tax due.
D, I did that thought experiment with full credit for LVT against income tax here.
Or we could offer people that they can choose whether to pay tax on their income or on the land they own, or give full credit for income tax against LVT, all sorts of combinations.
Inheritance tax is not "real wealth". It comprises mostly of land values today.
What muppet wrote that?
RS, get real, IHT applies to non-land real wealth as well as land values. It is probably the case that the bulk of IHT is raised from land values, but so what?
There's a lot of innocent real wealth being caught as well, and amazingly* enough, IHT has had absolutely no effect on reversing the concentration of land ownership.
* That's sarcasm by the way, as agricultural land is IHT exempt.
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