He can do maths (see previous post), but he's a bit timid in going against the status quo. From page 16 of his presentation on "Mortgages, housing and monetary policy – what lies ahead?" of November 2011 (pdf):
The natural way of addressing the tax distortions is to change the tax treatment of rental versus owner-occupied property. The recent Mirrlees Review* describes how this might be done. But changing the tax system is not easy. Losers are invariably created. No one should expect change to come quickly. But so long as the tax system favours owner-occupation we should recognize that – other things equal – this will make the owner-occupation rate inefficiently high.
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* The Taxation of Land and Property in J. Mirrlees et al (2011), ‘Tax by Design: the Mirrlees Review’, Oxford University Press.
The Mirrlees Review includes far bolder statements such as: "... deciding exactly how to tax land and property is particularly complex, because they combine a number of characteristics that each suggest different tax treatments. Take a house. It sits on land, the value of which we might want to tax because the land is completely fixed and the return to it is an economic rent
But the house also provides services that are consumed by the occupier—just as a fridge or a car does. So it is natural to think that the value of this consumption should be subject to VAT. The house is also a valuable asset, whose value rises and fluctuates like those of stocks and shares. So we might see homeownership as a form of saving that should be taxed consistently with other savings.
Also important is the distinction between owner-occupied and rented property. Ideally, we would want to treat these consistently. But, at present, their tax treatments are quite different in the UK, providing a clear bias towards owner-occupation.
They’re economically illiterate
7 hours ago
