Wednesday, 27 April 2016

It's not "is equivalent to", it "is".

From Yahoo:

The rocketing cost of housing over the last two decades is equivalent to a 10p tax hike for a typical family, according to research. About one fifth, 21%, of income was spent on covering the cost of a home last year, up from 17% in 1995, the Resolution Foundation analysis showed.

It amounts to £1,500 a year for a typical dual-earning couple with a child and works out the same as a 10p increase in the basic rate of tax, rising to 13p tax in London and Scotland, it said. Low and middle income earners have been hit hardest, with the proportion rising from 18% to 26%, while the cost for those on higher salaries went up from 14% to 18%.

As far as I am concerned, rent and mortgage payments are a tax on tenants and home buyers. It's called "land value tax" and what's wrong is that it is being siphoned off privately because the government is too corrupt or cowardly to collect it publicly (instead of fining people and businesses tax for working and making profits via income tax etc).


Ben Jamin' said...

Yep, and just like a tax that is all dished out again in benefits, it doesn't increase overall "costs". Although it certainly does increase them for one group and lower them for another.

The State does already collect most of the potential rental value of land (still leaving £250bn to go). Only it does so indirectly, thus unfairly and inefficiently, by taxing output.