Tuesday, 26 March 2013

Sometimes it all gets a bit too much

From today's FT:

Alistair Darling, former Labour chancellor, has warned that the package of mortgage guarantees announced last week could create “a housing bubble” and risked repeating mistakes of the US subprime crisis. Speaking in a Commons debate on the Budget, Mr Darling claimed that George Osborne had largely “given up on doing anything” and that his housing package could – if anything – create more problems. He claimed a chronic housing shortage meant that extra state support for mortgages could pump up prices.

Pots, kettles.

Arch Homey Allister Heath in today's Telegraph (h/t Bob E):

The recent tax review chaired by Sir James Mirrlees, the Nobel prize-winning economist, described stamp duty’s structure as “especially perverse” and argued that there “is no sound case for maintaining stamp duty and we believe it should be abolished”.

It is often thought that stamp duty is paid for by the buyer of a property. They are indeed the ones who have to find the cash and cough up – but the bulk of the real burden actually ends up falling on the seller. Supply and demand always rule: the price of a home, and what the seller gets, is determined by the total cost of the transaction.

Hiking stamp duty means that buyers have less money to spend on the home, which pushes prices down compared with what they would have been in an untaxed market. Most of the loss is thus passed on to the existing owner, even though it is the buyer who actually hands over the cash to HMRC.


Correct, SDLT is a bad tax. But having explained, quite correctly that SDLT pushes down selling prices (anathema to the Homeys) it's particularly shitty of him to refer to the Mirrlees review which explained in depth why taxes on the annual rental value of land are vastly preferable to any other kind of taxes, be that SDLT or taxes on earned income.

And the whole shitty article is headed "George Osborne's aspiration nation is a sham - and stamp duty proves it". Hang about here, you shit, I thought the official Homey line is that "aspiration" refers to the desire to buy a home (and we are agreed that buyers don't actually bear the SDLT), whereas our Homey friend sees "aspiration" as being the "aspiration" to sell the home you already own for a higher price.

Then in rapid fire quick succession, from today's Evening Standard (probably the most Home-Owner-Ist outlet of all):

Page 2: George Osborne’s new help for homebuyers could push up house prices, the country’s budget watchdog warned today. Steve Nickell, of the Office for Budget Responsibility, gave a cool welcome for schemes that will see the Government guarantee a share of some people’s mortgages.

It's not "could" it's "will".

Page 6: Children are being damaged by readily available pornography and books such as Fifty Shades of Grey teachers warned today. Members of the Association of Teachers and Lecturers called for extra training to help them give lessons about pornography.

OK, that's not directly housing related but infuriating nonetheless.

Page 11: The wife of the new Bank of England Governor has sparked fury by suggesting that the couple are struggling to find a place to live in London despite receiving a £5,000 a week taxpayer-funded housing subsidy.

The irony being that it is her husband's job to drive up rents and house prices for his mates in the One Per Cent.

Page 15: Conservatism is a project of social ecology, whose semantic link with conservation is explicit. Both habits share, as Roger Scruton puts it, the aim of husbanding resources: in the former case, love; in the latter, land. The true conservative sees his relationship with the Earth not as one of ownership and exploitation but temporary custodianship. Our planet, being both our inheritance and our legacy, is a conservative cause, a gift that secures the contract between the living, the dead and the unborn. So steward it.

WTF. The true conservative sees his relationship with the Earth as a neat way of sweating the working classes for every penny he can get; it is a gift that secures the benefits of trickle-up economics for himself and his descendants.

Page 23: The Duchess of Cornwall today expressed concern at the plight of Londoners fighting to survive on low wages and benefits. Camilla was on a fact-finding mission to two charities in east London to highlight their work helping people who run out of money before pay day. She has taken a growing interest in the financial problems of people who struggle to survive on State hand-outs and low wages and has earmarked the issue as a priority for 2013.

Well then how's about getting your husband and his family to campaign to replace taxes on earnings with LVT so that these people don't have to pay income tax and get a Citizen's Income as a bonus?

Page 28: This Easter, will you be turning your home into a hotel? Thanks to a growing breed of London home-rental agencies, your house no longer needs to sit empty and attract burglars when you go on holiday. Instead, it can be hard at work, posing as a boutique getaway, earning you a nice contribution to your travels. A week’s rental can pay for a family to fly to Europe and back. It’s money for old rope.

Indeed.

8 comments:

The Stigler said...

They get the porn bit the wrong way around. Its not that boys look for girls that fit the porn standard, its that the porn that sells is of the body shapes that boys like to look at.

Go back to Mesopotamian erotica and you find that blokes liked T&A.

Bayard said...

"Well then how's about getting your husband and his family to campaign to replace taxes on earnings with LVT"

Why not write to Charlie boy about it? He may be one of the country's richest landowners, but you never know, he might just be for it; after all, it won't affect him.

Lola said...

"Members of the Association of Teachers and Lecturers called for extra training to help them give lessons about pornography. Wonderful double meaning opportunity there...

Mark Wadsworth said...

TS, apparently, and I wouldn't know this first hand but I've been told, there are porn sites showing fat women, old women, hairy women, anything you like. There is no "male ideal" porn standard. I think it's what they do which is important, not what they look like.

B, he's mad as a hatter but he is not that mad.

L, I was tempted to re-write that one but was overwhelmed by the permutations.

Kj said...

Camilla was on a fact-finding mission to two charities in east London to highlight their work helping people who run out of money before pay day.

Solution in line with the current government logic: enact "funding for payday lending".

Mark Wadsworth said...

Kj, that is a wonderful idea. You should write to them.

L fairfax said...

Doesn't stamp duty stop people from downsizing so also makes prices stay high?
Stamp duty gets rid of 10% of the benefit of going from a £400k to a £300k house more than all other costs together.

Mark Wadsworth said...

LF, SDLT is a terrible tax, agreed, and your point is perfectly valid.

But the Homeys don't oppose SDLT because it leads to inefficient allocation of housing, they oppose it because it relates to housing.

Clearly, annual LVT is infinitely better than SDLT, fiscally neutral would be a 1% annual tax on the top ten or twenty per cent of housing, but the Homeys would oppose this even more violently than they oppose SDLT.