The Sun Says:
Axe, not tax
The Tories will be playing with fire if they bump up council tax to keep Nick Clegg happy. Council tax is already crippling.(1) And the Lib Dem argument for an increase is deeply flawed.(2)
Higher property valuation bands would hammer many working families (3) and retired people (4) who do not see their ordinary semis and terraced houses in the South as mansions.(5) Instead of raising taxes, let the Government cut overseas aid, reduce Whitehall overmanning and axe quangos.(6)
Who cares about keeping the idiot Clegg happy anyway? The Sun doesn’t.(7)
1) Outright lie. The total taxes raised from the productive economy are about £400 billion a year, borne mainly by fewer than 20 million working households; the overall effective tax rate on earnings is at least fifty per cent. Council Tax raises £25 billion-odd from 27 million households and is not income-related so does not discourage people from working (although Council Tax benefit probably does). No business has ever shut down because its customers or employees paid higher council tax - or are you more likely to get made redundant if you get a promotion and move into a nicer house in a higher council band?
2) No it's not. Their argument is quite sensible: "You can't take land abroad or hide it from the taxman."
3) Outright lie, see (1).
4) The interests of working age are completely at odds with the interests of retired people. If you're on the side of Poor Widows In Mansions, then you are quite maliciously acting against the interests of working age people. And the interests of landowners and bankers in 'the South' are diametrically opposed to the interests of the rest of the country anyway.
5) So what? The Queen probably thinks that Balmoral is a modest holiday cottage. A tax on rental values is a tax on rental values; for these purposes, a home on a large plot in a cheap area is equivalent to a home on a small plot in an expensive one. Market prices and market rents tell us this.
6) True but irrelevant. That's the spending side, not the tax raising side. It's like a school pupil going to the careers advisor and asking him whether he should spend his future earnings on cars or holidays.
7) Neither do I, but occasionally even Nick Clegg is right.
Monday, 19 November 2012
Killer Arguments Against LVT, Not (251)
Subscribe to:
Post Comments (Atom)
11 comments:
"1) Outright lie."
A journalist friend of mine was off on holiday when a colleague asked him "Are you going to lie in the sun?" to which he was able to reply "No, I leave that to their own staff".
Is this a new one? 'They own land, give them residency'
http://www.reuters.com/article/2012/11/19/us-spain-houses-idUSBRE8AI0S120121119
B, nice one.
DS, also nice one. But Spain is so desperate, that might be more a question of "They have money, sell them land, with right of residence as a bonus".
Because "right of residency" and "owning land" is much the same thing, if you don't own land, you are basically a foreigner in your own country and are forced to pay to incumbents merely for the privilege of being here. And if you own land but have no right to be on it, that's of limited use to you.
Council tax on private individuals bears very hard on some because it is paid out of income which has already been taxed.
So, on those who pay tax and/or National Insurance contributions, it is at an astronomical Wilson/Healey sort of rate - "making the pips squeak" and all that.
It may not make that much difference to the average politicians or financiers who can insulate themselves from inflation but it is a resented pain for the generality -
particularly to pensioners who are not on fixed incomes but may have seen the permitted "draw down" from their pension pots reduced by as much as 40% because the rate allowed by the government actuary is based on the yield of government stock,which is at a deliberately low level, whilst the rate of interest on their cash deposits is negative after inflation.
I agree with taxes on fixed property. It doesn't move about - but this is tax on tax on top of plunder.
Ed S: "Council tax on private individuals bears very hard on some because it is paid out of income which has already been taxed."
For a given tax take, it can either be on earned income or the rental value of land. For sure, taxation of incomes is theft, but it seems bizarre to twist that round as an argument against taxes on the rental value of land, it is not a question of either-or, we can have more of one and less of the other.
So if taxes on income were reduced by £x billion and taxes on the rental value of land increased by £x billion, that seems to me like a step in the right direction but the Homeys would still trot out the argument that LVT has to be paid out of taxed income.
Would the Homeys only stop squealing once we shift to a full on, LVT-only system with zero VAT, zero NIC, zero Income Tax and zero Corporation Tax?
Nope.
They will still say "But I bought my house out of taxed income", at which stage I say "OK, you go back and work out to a penny how much income tax you have paid, and I'll work out how much LVT you would have paid, and if you paid more income tax than you would have paid LVT, then you get a refund, but if you paid less income tax than you would have paid in LVT then you are liable to a large catch-up charge"
at which stage they come up with some completely different argument, and then you refute that, and then they never ever acknowledge that you make a good point they just invent yet another argument and so on ad infinitum
Ed S: "So, on those who pay tax and/or National Insurance contributions, it is at an astronomical Wilson/Healey sort of rate - "making the pips squeak" and all that."
Well, no its not. Yer average working age household with two working adults is paying, bearing or generating something like £40,000 a year in tax (the median is less than that but I don't know the figure) and out of that £40,000, only £1,000 or so is Council Tax. So it might tip the overall rate from 58.5% to 60% or something, but not a massive difference.
The other 58,5% is deducted at source, added to prices or some other stealthy manner, and hence will not attract the same resentment, unfortunately. Interestingly enough, when the Homeys charge people rent, or sell their houses at a price which is way above what they are actually "providing" to anyone, now those are OK lump sums to pay.
Kj, it's OK for the Homeys to get money for nothing because "it's their land paid for out of taxed income and they are providing a service to tenants unlike the government which provides nothing to anybody"
I meant to say the other 97,5% ofcourse. Yes, when income has been taxed, it's sacred money, at least when it's been used on property, not actually when used for anything else, saved, invested in something productive, it's fair game then.
Kj, "it's sacred money, at least when it's been used on property"
Don't say "property" when you mean "land and buildings", that's another clever bit of Home-Owner-Ist DoubleThink.
"Property" includes ALL "property", your earnings, your CD collection, your car, shares in a company etc etc.
Yes yes, land and buildings. Agreed on the co-option of the word.
Post a Comment