Oooh mansion tax! Labour have recently said that they
support a 1% levy on property over £2 million – the so-called mansion tax that
the Lib Dems pretend to like (how very liberal of them). There could even be a
vote soon on this issue in the Commons (which wouldn’t actually achieve much,
even if it passed, by the way).
This is basically an entire policy based on schadenfreude. I am amazed how long it
has taken to get to this politics-of-envy point, to be honest, but I suppose
this is down to the fact that most people on mortgages actually are doing just
fine thankyouverymuch.
Before I start, I would like to point out that I am more prone
to this envy than most, as I spend my working days as a surveyor waddling
around the houses of the super rich and I
don’t even own a property at all.
The principle of the tax is based around two starting
points: a) lots of people are really rich, especially foreign people, and they
are buying all ‘our’ houses in London and now elsewhere, and b) young middle
class families can no longer easily afford to buy houses in London, even if
they cut back on Ocado deliveries and pay their nanny less (“can I just pay you
directly in Zloty?”).
Squaring the circle by Ed Milibrain, we get to c) let’s
hammer the rich foreigners! Wouldn’t it be great fun if squillionaires buying
these ‘mansions’ (tiny, badly built over-priced rabbit hutches) in central
London suddenly had to pay hundreds in thousands in tax? Hehe! That’d be
brilliant. And it would also solve b) as well (I am being SARCASTIC on “b)” Nick
Clegg, keep up).
Now, I have long suspected that flogging off all our central
London property
for insane amounts of money to gullible foreigners has been part of a really
terribly clever sting. This sting involves us hoovering in billions from abroad
selling this stuff off and then, once we have hoovered in these billions, turn
around and tell them it’s all going to incur loads of taxes etc etc we were
just joking before on the whole ‘safety deposit box’ thing – and now it looks
as though Labour have given the game away too soon, and the plan has been
ruined before we have extracted all the petro-dollars we could have done.
However, what is clear is that this tax will do nothing to alleviate our housing
shortage in the short term – in fact, foreign money coming into the market is
the only thing propping up the market at all at the moment, if we choke that
off then the housing market could well have to face up to reality – and do
people really want to do that, right now? Really?
The schadenfreude could be great in the short term, I agree,
and a really good national mood-lifter – but then we might suddenly realize
that – whoops! – they have lowered the tax to include houses worth £1 million,
and now £500k, and now all houses… wasn’t income tax meant to just be a
temporary tax on the really rich, originally? I guess this is my main objection
– ignoring practicalities etc.
So what do we do instead? Something must be done, after al!
I know that under the law of un-intended consequences, every single
intervention in the housing market at any level by government recently has,
without exception, made the housing market worse. But something MUST BE DONE!
Well, how about imposing Capital Gains Tax on a main
residence, and abolish inheritance tax? Thus instantly stabilizing the housing
market, removing the possibility of all future un-sustainable housing booms and
creating a balanced, sustainable economy, with incentive to put money into
productive areas of the economy, rather than sinking all available funds into
stagnant, depreciating bricks and mortar assets.
Wait…did I just solve the entire housing AND financial
crisis?
I believe I did.
You’re welcome, Britain .
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