Cable's mansion tax
Discussion
Either I don't get it.. or Vince Cable doesn't get it.
How does the value of your house being over a certain value make you "wealthy" and therefore a worthy target of paying more tax?
3 things (or examples) don't make sense
1) Regional variation. A million quid gets you a very average sized house in parts of the south east - often not even a house. Where I used to live in London, a house starts at £1.6m so a million only gets you a 3 or 4 bed flat. In Scotland, it would get you a mansion no doubt. So is someone living in a flat equally as "wealthy" as someone in a real mansion? Is "wealthy" really an absolute or relative measure, and should it be for Vince to decide? There's a strong argument that wealth is relative - it would be odd to call someone wealthy (based on their property) when that property is average.
2) Price appreciation. If you were lucky/canny enough to buy in the right area and prices have risen a lot, does that really make you richer? If one day your house is worth £990k and the next day £1.001m, does that mean you suddenly have more income or a bigger bank balance with which to pay this proposed tax? No, of course not. My next door neighbour has a 9-bed mansion, but a struggling business due to the recession and non-paying clients, and no cash or income, selling cars in order to pay the bills. Is he "rich"? How is he supposed to pay a new mansion tax? It would be a conundrum if he had to sell the mansion to pay the mansion tax.
3) Inheritance. Tax on this inherited "wealth" has already been taxed - it's called inheritance tax. Should someone that inherits a house and has paid the inheritance tax, also pay a mansion tax? Dunno what size this tax will be, but it could be that it's enough to force more stately homes out of the hands of the families that may have owned them for generations, and into the hands of the National Trust, or developers turning them into yet more bloody golf courses or spas or venues for corporate group hugs and weddings.
Now there's certainly an argument for some sort of value added tax payable by these serial developers that buy a house and "move into" it (for cap gains reasons) while they do it up (knock it down and build a hideous McMansion in its place) and then flog it again immediately to their gain and the neighbours' expense. But mugging a retired couple because their house of 30 years has slipped over some arbitrary price threshold seems bang out of order.
rant over..
How does the value of your house being over a certain value make you "wealthy" and therefore a worthy target of paying more tax?
3 things (or examples) don't make sense
1) Regional variation. A million quid gets you a very average sized house in parts of the south east - often not even a house. Where I used to live in London, a house starts at £1.6m so a million only gets you a 3 or 4 bed flat. In Scotland, it would get you a mansion no doubt. So is someone living in a flat equally as "wealthy" as someone in a real mansion? Is "wealthy" really an absolute or relative measure, and should it be for Vince to decide? There's a strong argument that wealth is relative - it would be odd to call someone wealthy (based on their property) when that property is average.
2) Price appreciation. If you were lucky/canny enough to buy in the right area and prices have risen a lot, does that really make you richer? If one day your house is worth £990k and the next day £1.001m, does that mean you suddenly have more income or a bigger bank balance with which to pay this proposed tax? No, of course not. My next door neighbour has a 9-bed mansion, but a struggling business due to the recession and non-paying clients, and no cash or income, selling cars in order to pay the bills. Is he "rich"? How is he supposed to pay a new mansion tax? It would be a conundrum if he had to sell the mansion to pay the mansion tax.
3) Inheritance. Tax on this inherited "wealth" has already been taxed - it's called inheritance tax. Should someone that inherits a house and has paid the inheritance tax, also pay a mansion tax? Dunno what size this tax will be, but it could be that it's enough to force more stately homes out of the hands of the families that may have owned them for generations, and into the hands of the National Trust, or developers turning them into yet more bloody golf courses or spas or venues for corporate group hugs and weddings.
Now there's certainly an argument for some sort of value added tax payable by these serial developers that buy a house and "move into" it (for cap gains reasons) while they do it up (knock it down and build a hideous McMansion in its place) and then flog it again immediately to their gain and the neighbours' expense. But mugging a retired couple because their house of 30 years has slipped over some arbitrary price threshold seems bang out of order.
rant over..
You make some good points which I agree with.
However it appears politcially and economically the "mansion tax" is part of the Con/Lib negotiations to get rid of the 50% tax rate. On balance ,for the good of the economy, I would rather see a tax on wealth than on income. Would prefer niether but it isn't going to happen.
Currently income earned between £100k and £120k is taxed at around 62%. I beleive that is doing emormous damaged to the economy (as well as the tax take).
However it appears politcially and economically the "mansion tax" is part of the Con/Lib negotiations to get rid of the 50% tax rate. On balance ,for the good of the economy, I would rather see a tax on wealth than on income. Would prefer niether but it isn't going to happen.
Currently income earned between £100k and £120k is taxed at around 62%. I beleive that is doing emormous damaged to the economy (as well as the tax take).
Greenie said:
You make some good points which I agree with.
However it appears politcially and economically the "mansion tax" is part of the Con/Lib negotiations to get rid of the 50% tax rate. On balance ,for the good of the economy, I would rather see a tax on wealth than on income. Would prefer niether but it isn't going to happen.
Currently income earned between £100k and £120k is taxed at around 62%. I beleive that is doing emormous damaged to the economy (as well as the tax take).
Absolutely do not want a tax on wealth - what next? Other luxury items? Cars? or any other possessions or collections you can think of? Pension funds? Share portfolios? Where does it stop?However it appears politcially and economically the "mansion tax" is part of the Con/Lib negotiations to get rid of the 50% tax rate. On balance ,for the good of the economy, I would rather see a tax on wealth than on income. Would prefer niether but it isn't going to happen.
Currently income earned between £100k and £120k is taxed at around 62%. I beleive that is doing emormous damaged to the economy (as well as the tax take).
Why should someone who invests in a property be treated differently to someone who invests in the stockmarket or in an art collection etc?
A mansion tax is the thin end of the wedge - the whole idea is just insideous, socialist nonsense.
I thought that Cable's official title was "Business Secretary". So,
a - what does imposition of a socialist envy wealth tax have to do with the Business brief
b - what is Cable's policy on actual business issues, like small company exemptions from regulation, help for new start-ups, corporation tax, the use of business as a tax collection device etc etc
c - why isn't Cable in the papers every day promoting UK Industry, including financial services, and celebrating factories opened, contracts won, and jobs created ?
a - what does imposition of a socialist envy wealth tax have to do with the Business brief
b - what is Cable's policy on actual business issues, like small company exemptions from regulation, help for new start-ups, corporation tax, the use of business as a tax collection device etc etc
c - why isn't Cable in the papers every day promoting UK Industry, including financial services, and celebrating factories opened, contracts won, and jobs created ?
Greenie said:
You make some good points which I agree with.
However it appears politcially and economically the "mansion tax" is part of the Con/Lib negotiations to get rid of the 50% tax rate. On balance ,for the good of the economy, I would rather see a tax on wealth than on income. Would prefer niether but it isn't going to happen.
Currently income earned between £100k and £120k is taxed at around 62%. I beleive that is doing emormous damaged to the economy (as well as the tax take).
But, as much as I dislike the 50% rate, at least a tax on income means there is an income. A tax on second homes in the UK or worldwide? Fine. But a tax on one's sole residence, regardless of income, based on some arbitrary notion of "wealth", is utterly unfair.However it appears politcially and economically the "mansion tax" is part of the Con/Lib negotiations to get rid of the 50% tax rate. On balance ,for the good of the economy, I would rather see a tax on wealth than on income. Would prefer niether but it isn't going to happen.
Currently income earned between £100k and £120k is taxed at around 62%. I beleive that is doing emormous damaged to the economy (as well as the tax take).
I work with a number of French people, all paying UK income tax, VAT and council tax. The common answer they give as to why they're living in London (apart from the superior food, fashion, culture and weather here, naturally) is the French wealth tax.
a much easier target is non-resident and/or non Brit passport property owners (who have been driving up property prices in London and the S East )
... Just implement a 10% stamp duty surcharge on ALL properties bought by anyone who neither holds a Brit passport or is not domiciled in the UK.
And consider doing it retrospectively (say 2%/ annum for 5 years)
The 10% surcharge has just been introduced in singapore for foreigners even if resident here - idea is to dampen demand and prices and also raise some revenue.
Even though it adversely affects me...I can see the logic.
... Just implement a 10% stamp duty surcharge on ALL properties bought by anyone who neither holds a Brit passport or is not domiciled in the UK.
And consider doing it retrospectively (say 2%/ annum for 5 years)
The 10% surcharge has just been introduced in singapore for foreigners even if resident here - idea is to dampen demand and prices and also raise some revenue.
Even though it adversely affects me...I can see the logic.
munky said:
Either I don't get it.. or Vince Cable doesn't get it.
How does the value of your house being over a certain value make you "wealthy" and therefore a worthy target of paying more tax?
3 things (or examples) don't make sense
1) Regional variation. A million quid gets you a very average sized house in parts of the south east - often not even a house. Where I used to live in London, a house starts at £1.6m so a million only gets you a 3 or 4 bed flat. In Scotland, it would get you a mansion no doubt. So is someone living in a flat equally as "wealthy" as someone in a real mansion? Is "wealthy" really an absolute or relative measure, and should it be for Vince to decide? There's a strong argument that wealth is relative - it would be odd to call someone wealthy (based on their property) when that property is average.
2) Price appreciation. If you were lucky/canny enough to buy in the right area and prices have risen a lot, does that really make you richer? If one day your house is worth £990k and the next day £1.001m, does that mean you suddenly have more income or a bigger bank balance with which to pay this proposed tax? No, of course not. My next door neighbour has a 9-bed mansion, but a struggling business due to the recession and non-paying clients, and no cash or income, selling cars in order to pay the bills. Is he "rich"? How is he supposed to pay a new mansion tax? It would be a conundrum if he had to sell the mansion to pay the mansion tax.
3) Inheritance. Tax on this inherited "wealth" has already been taxed - it's called inheritance tax. Should someone that inherits a house and has paid the inheritance tax, also pay a mansion tax? Dunno what size this tax will be, but it could be that it's enough to force more stately homes out of the hands of the families that may have owned them for generations, and into the hands of the National Trust, or developers turning them into yet more bloody golf courses or spas or venues for corporate group hugs and weddings.
Now there's certainly an argument for some sort of value added tax payable by these serial developers that buy a house and "move into" it (for cap gains reasons) while they do it up (knock it down and build a hideous McMansion in its place) and then flog it again immediately to their gain and the neighbours' expense. But mugging a retired couple because their house of 30 years has slipped over some arbitrary price threshold seems bang out of order.
rant over..
1 Who cares if you can afford to live in a decent area then you can afford the tax, if you live in a hellhole where houses don't cost a million pounds then you are probably a street sweeperHow does the value of your house being over a certain value make you "wealthy" and therefore a worthy target of paying more tax?
3 things (or examples) don't make sense
1) Regional variation. A million quid gets you a very average sized house in parts of the south east - often not even a house. Where I used to live in London, a house starts at £1.6m so a million only gets you a 3 or 4 bed flat. In Scotland, it would get you a mansion no doubt. So is someone living in a flat equally as "wealthy" as someone in a real mansion? Is "wealthy" really an absolute or relative measure, and should it be for Vince to decide? There's a strong argument that wealth is relative - it would be odd to call someone wealthy (based on their property) when that property is average.
2) Price appreciation. If you were lucky/canny enough to buy in the right area and prices have risen a lot, does that really make you richer? If one day your house is worth £990k and the next day £1.001m, does that mean you suddenly have more income or a bigger bank balance with which to pay this proposed tax? No, of course not. My next door neighbour has a 9-bed mansion, but a struggling business due to the recession and non-paying clients, and no cash or income, selling cars in order to pay the bills. Is he "rich"? How is he supposed to pay a new mansion tax? It would be a conundrum if he had to sell the mansion to pay the mansion tax.
3) Inheritance. Tax on this inherited "wealth" has already been taxed - it's called inheritance tax. Should someone that inherits a house and has paid the inheritance tax, also pay a mansion tax? Dunno what size this tax will be, but it could be that it's enough to force more stately homes out of the hands of the families that may have owned them for generations, and into the hands of the National Trust, or developers turning them into yet more bloody golf courses or spas or venues for corporate group hugs and weddings.
Now there's certainly an argument for some sort of value added tax payable by these serial developers that buy a house and "move into" it (for cap gains reasons) while they do it up (knock it down and build a hideous McMansion in its place) and then flog it again immediately to their gain and the neighbours' expense. But mugging a retired couple because their house of 30 years has slipped over some arbitrary price threshold seems bang out of order.
rant over..
2 Who cares if the house has appreciated and you can't afford the tax then sell it and down size
3 Who cares if you can't afford to keep it then sell it and down size
What does worry me is it will start with 2 million pound houses and by a week next tuesday it will be all houses and by the following thursday all assets worth more then 50 pence
munky said:
Either I don't get it..
The main point behind a land or location tax is that, in general, the price you pay for a property or piece of land (ie, the value the market gives it) is not about the land itself, but about where the land is. A house sitting on a piece of land might cost more or less the same to put up in Wales and London, and as a structure, be worth the same in both places. But the house in London still sells for 20 times the one in Wales because of the wealth of activity around the land on which it sits. The community, the infrastructure, the buses, the airports, the schools, the hospitals, the ease of doing business – the price you pay for the land is a function of all these social rather than private goods. As Nick puts it, “the mud beneath our feet is only worth what it is because of what goes on around it”.
This suggests that the value of a piece of land should perhaps be divided into two. The first part should be the value of whatever sits on the land (its houses, sheds, factories and the like). The second should represent the value given it to buy the surrounding civilisation (its 'location value').
There is a neat little example of the existence of location value in today’s FT. According to letter writer Charles Bazlinton, when a bypass is built around a town, residential property values in that town will rise by an average of 15% as a direct result.
This 15% uplift in capital values - which is effectively a 15% rise in the location value of the properties - accrues instantly to private property owners in the town. But given that the bypass will have been paid for by everyone’s taxes, why does it make sense that one group of people (freehold property owners) should make money out of it when everyone else does not?
From this comes the idea that the 15% uplift should be shared out among the community as a whole via a property value tax – or a location value tax (LVT). That way, something the community has provided benefits the community rather than just the private landowners within the community
http://www.moneyweek.com/blog/scrap-income-tax-int...
Do you not understand the tax or do you not understand why the state needs to raise taxes?
Current position:
- Buy a house for £100,000 - pay no tax.
- Buy a house for £1m - pay £50,000 tax (Stamp Duty) out of income which has alreday been taxed. So a high earner making £150k pa needs to earn £100,000 (that's 8 months salary!!) just to pay the government's "moving house tax".
Ozzie Osmond said:
Current position:
He is an idiot of epic proportions. - Buy a house for £100,000 - pay no tax.
- Buy a house for £1m - pay £50,000 tax (Stamp Duty) out of income which has alreday been taxed. So a high earner making £150k pa needs to earn £100,000 (that's 8 months salary!!) just to pay the government's "moving house tax".
Fittster said:
This 15% uplift in capital values - which is effectively a 15% rise in the location value of the properties - accrues instantly to private property owners in the town. But given that the bypass will have been paid for by everyone’s taxes, why does it make sense that one group of people (freehold property owners) should make money out of it when everyone else does not?
Same reason as when properties get blighted by some construction or other, the owners seldom get full value compensation.Greenie said:
You make some good points which I agree with.
However it appears politcially and economically the "mansion tax" is part of the Con/Lib negotiations to get rid of the 50% tax rate. On balance ,for the good of the economy, I would rather see a tax on wealth than on income. Would prefer niether but it isn't going to happen.
Currently income earned between £100k and £120k is taxed at around 62%. I beleive that is doing emormous damaged to the economy (as well as the tax take).
The fundamental problem is that the government needs to spend less money. This is the thin end of the wedge as the threshold will slip down or new bands will be introduced. What are we supposed to do in retirement? What is the incentive to better ourselves? At least income tax falls straight after you earn money. Cameron should man up on this one - present the evidence for abolishing the 50% bracket and just do it with no concessions to these lib dem idiots.However it appears politcially and economically the "mansion tax" is part of the Con/Lib negotiations to get rid of the 50% tax rate. On balance ,for the good of the economy, I would rather see a tax on wealth than on income. Would prefer niether but it isn't going to happen.
Currently income earned between £100k and £120k is taxed at around 62%. I beleive that is doing emormous damaged to the economy (as well as the tax take).
anonymous said:
[redacted]
Not sure, but most of them are junior and/or recent grads, so 35k would be more than they'd pay in income tax anyway.If there really, really has to be a 'mansion tax' then set the bar at £10m and target the oligarchs with trophy properties in London, or objectionable Egyptian shop-owners that weren't allowed a UK passport...
Wombat3 said:
As someone I know just put it, its basically a tax on inflation.
Insideous idea.
Hardly a new idea. Since when have income tax thresholds been adjusted to match wage inflation?Insideous idea.
For example:
George Osborne announced that direct taxes would move up or down with inflation according to the Consumer Prices Index (CPI) rather than the Retail Prices Index (RPI) from April 2012.
As a result, the thresholds above which individuals pay taxes will rise less quickly than they would have done – because CPI traditionally runs behind RPI. Figures this week showed CPI at 4.4 per cent and RPI, which includes housing costs, at 5.5 per cent
MrCheese said:
Greenie said:
You make some good points which I agree with.
However it appears politcially and economically the "mansion tax" is part of the Con/Lib negotiations to get rid of the 50% tax rate. On balance ,for the good of the economy, I would rather see a tax on wealth than on income. Would prefer niether but it isn't going to happen.
Currently income earned between £100k and £120k is taxed at around 62%. I beleive that is doing emormous damaged to the economy (as well as the tax take).
The fundamental problem is that the government needs to spend less money. This is the thin end of the wedge as the threshold will slip down or new bands will be introduced. What are we supposed to do in retirement? What is the incentive to better ourselves? At least income tax falls straight after you earn money. Cameron should man up on this one - present the evidence for abolishing the 50% bracket and just do it with no concessions to these lib dem idiots.However it appears politcially and economically the "mansion tax" is part of the Con/Lib negotiations to get rid of the 50% tax rate. On balance ,for the good of the economy, I would rather see a tax on wealth than on income. Would prefer niether but it isn't going to happen.
Currently income earned between £100k and £120k is taxed at around 62%. I beleive that is doing emormous damaged to the economy (as well as the tax take).
Another thread (about squatters I think) brought up land value tax.
http://en.wikipedia.org/wiki/Land_value_tax
As a way to replace current taxes.
http://en.wikipedia.org/wiki/Land_value_tax
As a way to replace current taxes.
Gassing Station | News, Politics & Economics | Top of Page | What's New | My Stuff