Somewhat hampered by their complete incapacity to recognise opposites or compare like with like.

From TPA's email of the day:

This week also saw the launch of a powerful new documentary from Jeff Randall about the terrible economic situation facing many young people.

Unfortunately Nick Clegg has proposed a new wealth tax which would make that situation a lot worse. We need to stop yet more gesture politics undermining Britain's economic future.

I watched that programme too, and the underlying message was that the Baby Boomer generation have helped themselves, firstly via overly generous pension promises (which burden future taxpayers and business sector) and secondly via the housing market (which burdens future generations with higher debts, and of course this spills over into higher public sector debt when governments bail out banks).

So the two parties involved here are:
- The Baby Boomers (perp's)
- Younger people (vic's).

A "wealth tax", or more precisely, "land value tax" would neatly go a long way to reversing these massive wealth transfers; it would help match assets and liabilities, so that the Baby Boomers end up paying off their own debts, thank you very much.

Or do the TPA think that young people own most of the "wealth" (i.e. land)?
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The responses to Clegg's vague ideas about a "wealth tax" (i.e. land value tax) equally failed to identify the two competing and opposite parties involved:

In the case of the mansion tax, it is a double taxation and ignores the very essence of fairness. As the attraction of foreign investments into the UK is focused around multinational companies, an alignment of tax policies to attract high net worth individuals could be more beneficial to the economy, as most high net worths have influence on multinational decision making.

1. What these people are talking about is really expensive houses in central/west London and the people who might live in them. There's a very limited number of such houses and there is a limited number of potential occupants.

2. To make a true like-for-like comparison, let's identify one single house, which is owner/occupied by a Poor Widow*, who bought it for tuppence half a century ago, and it's now 'worth' millions. And then there is one "wealth creator" (i.e. oligarch, kleptocrat or banker) who'd like to move to London, but only if he can buy that house. The interests of these two parties are direct opposites - they both want to live in that house.

3. Let's assume that the wealth-mansion-land value tax finally nudges the Poor Widow into cashing in and moving a bit further out of town (she is now a very wealthy widow in a still-very-nice house instead of a Poor Widow In A Mansion). So that's one extra house on the market for the "wealth creator" to move into. The price of the house will adjust down for the future tax liabilities (and because there are more such houses now on the market), so the "wealth creator" is still happy to buy it, and now at least he can buy it at all, at whatever price.

4. Feel free to argue that a wealth-mansion-land value tax "hits" Poor Widows In Mansions (my opinion is that she will be much happier with her still-very-nice house a bit further out of town and millions in the bank, she is allowed to tell her relatives and friends her new address and nowadays, she can take her telephone number with her so that people don't lose touch).

5. But do not then argue that such a tax discourages "wealth creators" from moving to London; quite the opposite - with the tax, we'll get more of these people moving to London - the amount they spend on housing dwarfs the amount of publicly collected tax they pay, so if housing costs are knocked down a bit, that's a big win as far as they are concerned.

6. Just to nail this down: sure, those "wealth creators" who are already here will have to pay the tax as well, but this will not drive them away; and even if it did, a new "wealth creator" will be happy to take their place. And if the tax nudges a few non-resident "investors" to finally rent or sell their vacant homes, the same applies.

7. Of course, if the proceeds of the tax are used to reduce taxes on actual wealth creation (rather than wealth accumulation) then so much the better.
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* People who wail about LVT being "double taxation" are alluding to Poor Widows, who "bought their cherished family homes full of treasured memories out of taxed money". Firstly, LVT is not double taxation, income tax is. Secondly, she only paid tuppence out of taxed money. Thirdly, that house was liable to Schedule A tax/Domestic Rates when she bought it, which together were considerably higher than Nick's suggested 0.5% rate.

Fourthly, would she still have bought the house if she'd somehow known in advance that Domestic Rates were to be scrapped, that she'd be able to sell the house for £ millions fifty years later and that a modest Domestic Rates would be re-introduced in fifty years' time?

Methinks yes, whichever way you look at it, the Poor Widow has had her money back a hundred times over, having paid off her mortgage in ten years or so and lived rent-free ever since.

Even with a full-on LVT which would see the selling price of the house tumble, she has already banked a lifetime's rent savings, nobody's suggesting that we go back and try and tax those (so LVT is clearly not double taxation). And even if she'd known in advance about LVT, she would still have been happy to buy the house for tuppence when she did.