Uk Council tax,. Reform. Needed?

[Countdown]

Rovinghawk said:

oyster said:

I would prefer more emphasis on wealth taxing than income taxing

I was already taxed on the income to accumulate this wealth- now you think it should be taxed a second time?

You get taxed on all your income at least twice, and potentially more often.

[Rovinghawk]

Countdown said:

You get taxed on all your income at least twice, and potentially more often.

All the more reason to not add another layer of taxation.

[oyster]

Rovinghawk said:

oyster said:

I would prefer more emphasis on wealth taxing than income taxing

I was already taxed on the income to accumulate this wealth- now you think it should be taxed a second time?

I have paid zero tax on the unearned wealth I've gained through inflation in my principal private residence.
Yes, some of that asset value was paid for out of already-taxed income, but a large proportion wasn't.

In any case, I didn't say I wanted more wealth taxing on top of income taxing, I suggested it could replace some of it.

[Rovinghawk]

oyster said:

I have paid zero tax on the unearned wealth I've gained through inflation in my principal private residence.
Yes, some of that asset value was paid for out of already-taxed income, but a large proportion wasn't.

So people should be taxed for matters beyond their control? May I presume that in the event of falls in property prices people will be eligible for refunds? I doubt it.

oyster said:

In any case, I didn't say I wanted more wealth taxing on top of income taxing, I suggested it could replace some of it.

Not great for the retired, is it? All the more reason to piss it all up the wall & expect the government to keep us in our old age rather than providing for our futures.

[oyster]

Rovinghawk said:

oyster said:

I have paid zero tax on the unearned wealth I've gained through inflation in my principal private residence.
Yes, some of that asset value was paid for out of already-taxed income, but a large proportion wasn't.

So people should be taxed for matters beyond their control? May I presume that in the event of falls in property prices people will be eligible for refunds? I doubt it.

oyster said:

In any case, I didn't say I wanted more wealth taxing on top of income taxing, I suggested it could replace some of it.

Not great for the retired, is it? All the more reason to piss it all up the wall & expect the government to keep us in our old age rather than providing for our futures.

Most asset gains are taxed beyond our control. I can't control the share price of xyz corporation, but if I make enough profit on it then I pay CGT (subject to allowances).

Your retired point is very moot. Part of the whole council tax versus other tax for local services debate revolves around the folk who are asset rich but cash or income poor. We've already seen it on this thread.

[NDA]

Rovinghawk said:

All the more reason to piss it all up the wall & expect the government to keep us in our old age rather than providing for our futures.

Yes quite.

Taxing people out of their homes may appeal to people of a more Marxist persuasion, but it's not going to help anyone. Less tax will be collected - as has been seen as a consequence of the huge rise in Stamp Duty.

My house is worth less than I paid for it a few years ago, I would very much like a refund on the Stamp Duty I paid on the sum that's been lost. Fat chance.

None of the proposed tax hikes help stimulate wealth creation - which would be a far better aspiration than merely trying to grab more money from those that contribute the most.

[Ian Geary]

Rovinghawk said:

0ddball said:

Rovinghawk said:

0ddball said:

You seem to be confusing financial success with effort expended.

If you think all of the high earners got there through hard work you must see fluffy bunnies and unicorns on a daily basis.

Would not not agree that effort & success have a very high correlation?

I would agree that success and people of nefarious personality have a high correlation.

In relation to my question, would you agree or disagree?

My thoughts are that whilst the chance of success without effort are virtually zero (so very well correlated, with lottery win or reality tv gig being exceptions) it doesn't necessarily follow that effort always results in success, or success is a measure of effort put in.

So to say anyone who isn't materially successful has just "not put in the effort" would be a massive over simplification.

I guess the challenge for those structuring our tax system (and our delivery of public services) is what to do about instances where over simplifications just don't cut it.

Tax has to be seen as fair of course, and the lesson Thatcher learnt about local taxes is still in Westminster's mind.

Ultimately, the baby boomer equity that came from nowhere will eventually be cashed in to the care home operator, or iht will get a chunk.

I can't see another generation of adults gaining so much so easily again any time soon, which to me makes it not worth the pain of moving to a proper wealth tax.

I haven't worked out whether I would be better off or worse off yet, and obviously need to do that before I "pick a side" to argue ad nauseam about forever more.

[anonymous-user]

oyster said:

I have paid zero tax on the unearned wealth I've gained through inflation in my principal private residence.

You didn't earn any of the profits in your pension scheme either, and you got to pay into it tax free. Should you be charged CGT on that too? In any event I'd argue you made an investment, took a risk, you made money, you earned it. It might have been easy, accidental even but it's still yours and wouldn't have been if you'd chosen to rent.

[turbobloke]

oyster said:

I have paid zero tax on the unearned wealth I've gained through inflation in my principal private residence.

As indicated previously, risk-reward. It's not all about effort expended.

[edh]

turbobloke said:

Opinions are ten a penny, including ours and particularly politicians' and activists'.

Do demonstrate, as opposed to opine, how LVT isn't a postcode lottery of a nonsense tax - Oxford showed (see earlier post) that it is just that.

Ah - is this BBC "balance"?

I would suggest it's you that's happy with a lottery where people win or lose from externalities that drive land prices? LVT acts to balance out that "lottery". It would recover an element of windfall gains and repay an element of losses.

You didn't provide a link to the single study you quoted. Over the years I have linked to many reports, articles etc.. (btw I think it's much simpler. The biggest losers would be the people with lots of high value land, not homeowners with big gardens that "might" have a chance of having houses built on it)

How would you like me to "demonstrate"? Is the Oxford paper a "demonstration" or an "opinion"? What's the difference in your view?

LVT promotes efficient allocation of capital. It's not "socialist". If you think high land values, runaway land value inflation and large amounts of capital tied up in land speculation are good things, then LVT isn't for you.

Even just replacing business rates with LVT would be beneficial as it wouldn't penalise investment in premises. Economic development at the margins would be promoted, even more so if EER's NI was removed.

[turbobloke]

edh said:

turbobloke said:

Opinions are ten a penny, including ours and particularly politicians' and activists'.

Do demonstrate, as opposed to opine, how LVT isn't a postcode lottery of a nonsense tax - Oxford showed (see earlier post) that it is just that.

Ah - is this BBC "balance"?

Is it?

My happiness is unrelated to the non-prospect of the coin tossing postcode lottery nonsense of LVT.

Never rely on a politician. It's worse with more than one politician.

[NDA]

edh said:

LVT acts to balance out that "lottery". It would recover an element of windfall gains and repay an element of losses.

It's only a 'lottery' when you cash in. Taxing the assumed value of a home is taxing an asset the owners haven't realised - one that is not liquid and one they may not want to realise. Introducing a tax on this assumed wealth could be disastrous for many families. It's an envy tax.

[turbobloke]

NDA said:

edh said:

LVT acts to balance out that "lottery". It would recover an element of windfall gains and repay an element of losses.

It's only a 'lottery' when you cash in. Taxing the assumed value of a home is taxing an asset the owners haven't realised - one that is not liquid and one they may not want to realise. Introducing a tax on this assumed wealth could be disastrous for many families. It's an envy tax.

It's also (still) a random tax strongly impacted by random beneficial / popular / detrimental / unpopular developments adjacent / nearby to a given plot, unrelated to the landowner and likely unknown at the time of purchase - which encapsulates the double postcode lottery aspect arising from council planners' attitudes differing from location to location to location and the developments arising (or not).

[Halb]

edh said:

I would suggest it's you that's happy with a lottery where people win or lose from externalities that drive land prices? LVT acts to balance out that "lottery". It would recover an element of windfall gains and repay an element of losses.
LVT promotes efficient allocation of capital. It's not "socialist". If you think high land values, runaway land value inflation and large amounts of capital tied up in land speculation are good things, then LVT isn't for you.

Even just replacing business rates with LVT would be beneficial as it wouldn't penalise investment in premises. Economic development at the margins would be promoted, even more so if EER's NI was removed.

It sounds good.

[otolith]

oyster said:

I have paid zero tax on the unearned wealth I've gained through inflation in my principal private residence.

Has your house had babies, or do you still own exactly one house, which presumably you still need?

[turbobloke]

Halb said:

edh said:

I would suggest it's you that's happy with a lottery where people win or lose from externalities that drive land prices? LVT acts to balance out that "lottery". It would recover an element of windfall gains and repay an element of losses.
LVT promotes efficient allocation of capital. It's not "socialist". If you think high land values, runaway land value inflation and large amounts of capital tied up in land speculation are good things, then LVT isn't for you.

Even just replacing business rates with LVT would be beneficial as it wouldn't penalise investment in premises. Economic development at the margins would be promoted, even more so if EER's NI was removed.

It sounds good.

And overall works bad.

[anonymous-user]

edh said:

...The biggest losers would be the people with lots of high value land, not homeowners with big gardens that "might" have a chance of having houses built on it)
...

Of course the biggest losers will be people with high value land, that is a given. Is land that ''might'' have houses built on it not such high value land? Yes, obviously. The land value of a small garden with no access is minimal. The land value of a large garden with access is substantial with any likelihood of PP. Furthermore, the value of a land in, for example, greenbelt or on a village boundary could change by a factor of 10 or more with a relaxation of planning rules. In my mum and dads rural village almost every house, all built around the 60's, has a thin strip of garden about 1/3 of an acre behind them. The farm track along the back could be paved and voila... now your garden is going to cost you 10k a year in tax. Of course LVT isn't a ''garden tax'' but it's very easy to see how many people would be forced to sell their gardens.

[turbobloke]

fblm said:

edh said:

...The biggest losers would be the people with lots of high value land, not homeowners with big gardens that "might" have a chance of having houses built on it)
...

Of course the biggest losers will be people with high value land, that is a given. Is land that ''might'' have houses built on it not such high value land? Yes, obviously. The land value of a small garden with no access is minimal. The land value of a large garden with access is substantial with any likelihood of PP. Furthermore, the value of a land in, for example, greenbelt or on a village boundary could change by a factor of 10 or more with a relaxation of planning rules. In my mum and dads rural village almost every house, all built around the 60's, has a thin strip of garden about 1/3 of an acre behind them. The farm track along the back could be paved and voila... now your garden is going to cost you 10k a year in tax. Of course LVT isn't a ''garden tax'' but it's very easy to see how many people would be forced to sell their gardens.

As long as it's other people suffering then, as happens with taxes, that's OK (Jack).

Random postcode lottery tax is random - and not worth the effort. It would add to, not replace, in time.

[98elise]

Rovinghawk said:

oyster said:

I have paid zero tax on the unearned wealth I've gained through inflation in my principal private residence.
Yes, some of that asset value was paid for out of already-taxed income, but a large proportion wasn't.

So people should be taxed for matters beyond their control? May I presume that in the event of falls in property prices people will be eligible for refunds? I doubt it.

oyster said:

In any case, I didn't say I wanted more wealth taxing on top of income taxing, I suggested it could replace some of it.

Not great for the retired, is it? All the more reason to piss it all up the wall & expect the government to keep us in our old age rather than providing for our futures.

Agreed. A tax on wealth is a tax on savings. My brother and I are similar ages and earn similar money. I have overpaid my mortgage to pay off my house, saved into a pension, and have savings. My brother has a large mortgage, new cars on PCP and whenever he has any money he will spend it on a holiday. He lives on credit cards and every few years just whacks it on the mortgage so he can start the cycle again.

A tax on on wealth would see me taxed more for having a sensible approach to my finances.

Edited by 98elise on Friday 22 February 19:11

[edh]

fblm said:

edh said:

...The biggest losers would be the people with lots of high value land, not homeowners with big gardens that "might" have a chance of having houses built on it)
...

Of course the biggest losers will be people with high value land, that is a given. Is land that ''might'' have houses built on it not such high value land? Yes, obviously. The land value of a small garden with no access is minimal. The land value of a large garden with access is substantial with any likelihood of PP. Furthermore, the value of a land in, for example, greenbelt or on a village boundary could change by a factor of 10 or more with a relaxation of planning rules. In my mum and dads rural village almost every house, all built around the 60's, has a thin strip of garden about 1/3 of an acre behind them. The farm track along the back could be paved and voila... now your garden is going to cost you 10k a year in tax. Of course LVT isn't a ''garden tax'' but it's very easy to see how many people would be forced to sell their gardens.

No. I'd suggest that land with established PP in areas with high land prices is "high value land" As you have hinted at in your post, once PP is granted, land value increases dramatically. Any valuation would deal with "permitted" use not "possible" use. The additional value for a garden with potential for PP is speculative and I don't believe would be assessed because in LVT terms, as the site value is associated with the notional annual ground rent, rather than any speculative premium.

I think the rest is conjecture and a dash of sensationalism.

Here's an example of how the thinking is developing in Scotland (not sure if this is an "Opinion" or "Demonstration" )
http://slrg.scot/wp-content/uploads/2018/02/pathto...