|
Source: (consider it)
|
Thread: Mansion tax
|
seekingsister
Shipmate
# 17707
|
Posted
quote:
Originally posted by chris stiles:
There are plenty of ways in which those who are rich benefit - in monetary terms - far more than on the poor from things like; the rule of law, legal institutions, intellectual property rights and the police. To a large extent those tax havens also remain law abiding because of the global reach of developed nation states.
But they don't use the NHS more (or at all), which is what the mansion tax is supposed to be funding.
Posts: 1371 | From: London | Registered: May 2013
| IP: Logged
|
|
chris stiles
Shipmate
# 12641
|
Posted
quote:
Originally posted by seekingsister:
But they don't use the NHS more (or at all), which is what the mansion tax is supposed to be funding.
.. but they would if they were impoverished grannies.
The context of the quoted remark was that of what the overall aim of the tax system should be - in response to the question you raised here:
http://forum.ship-of-fools.com/cgi-bin/ultimatebb.cgi?ubb=get_topic;f=2;t=019191;p=1#000040
It wasn't intended as a guideline on particular taxes. In general I don't think hypothecation of taxes is a good thing.
Posts: 4035 | From: Berkshire | Registered: May 2007
| IP: Logged
|
|
chris stiles
Shipmate
# 12641
|
Posted
quote:
Originally posted by seekingsister:
My suggestion was to exclude the property you live in, if you earn an income in Britain.
I think you are completely missing the point. The problem is in your proviso; if such a thing was enacted anyone who was living off returns from investment alone could just seek to have part of that paid as 'income' in order to avoid tax on the property they live in. It's simply what many contractors used to do - but in reverse.
[ 20. November 2014, 09:47: Message edited by: chris stiles ]
Posts: 4035 | From: Berkshire | Registered: May 2007
| IP: Logged
|
|
seekingsister
Shipmate
# 17707
|
Posted
quote:
Originally posted by chris stiles:
quote:
Originally posted by seekingsister:
My suggestion was to exclude the property you live in, if you earn an income in Britain.
I think you are completely missing the point. The problem is in your proviso; if such a thing was enacted anyone who was living off returns from investment alone could just seek to have part of that paid as 'income' in order to avoid tax on the property they live in. It's simply what many contractors used to do - but in reverse.
Earned income as in someone who pays taxes through PAYE. Not capital gains or investment income.
Perhaps you can explain how the mansion tax is avoidance free but my wealth tax idea is a terrible idea that would never work ever?
Honestly, do you think Ed Miliband is the only person to have an idea of how to tax wealth? Think outside of the box here.
Posts: 1371 | From: London | Registered: May 2013
| IP: Logged
|
|
Matt Black
Shipmate
# 2210
|
Posted
quote:
Originally posted by Doc Tor:
quote:
Originally posted by Matt Black:
The prime reason why I am against it is that it is unnecessary. We have enough taxes in this country.
A properly levied LVT - one that rich people can't avoid - should mean we can do away with many of the taxes - CGT, IHT, etc - that they avoid already, and allow the tax inspectors to concentrate on two important things: who owns this piece of land and what is its value?
Abolishing several taxes to create a new one would involve even more costly internal reorganisation for HMRC than just creating a new tax! I ask again: why does Ed(other than blatant electioneering) see the need to reinvent the wheel rather than use the existing system more effectively?
--------------------
"Protestant and Reformed, according to the Tradition of the ancient Catholic Church" - + John Cosin (1594-1672)
Posts: 14304 | From: Hampshire, UK | Registered: Jan 2002
| IP: Logged
|
|
quetzalcoatl
Shipmate
# 16740
|
Posted
It's not Miliband's or Labour's idea anyway; it was first put forward by Vince Cable, I think, and was adapted as a higher 'Stamp Duty Land Tax' by the coalition. In fact, Clegg has been replying to Myleene Klass in the last few days.
You can contribute, if you like, to an appeal fund for multi-millionaire Myleene Klass, so that she can pay her mansion tax (heavily sarcastic of course).
--------------------
I can't talk to you today; I talked to two people yesterday.
Posts: 9878 | From: UK | Registered: Oct 2011
| IP: Logged
|
|
chris stiles
Shipmate
# 12641
|
Posted
quote:
Originally posted by seekingsister:
Earned income as in someone who pays taxes through PAYE. Not capital gains or investment income.
So just create a shell company, register yourself as a part-time employee, pay yourself a nominal wage of £100 per month for consultancy. Use levels of indirection as appropriate.
In general a wealth tax is a good idea as long as it applied to all wealth, not just property holdings.
I don't see that a mansion tax is a terribly bad idea though - so far all the arguments seem to be either poorly thought out or some variant on the okay being the enemy of the perfect.
[ 20. November 2014, 10:30: Message edited by: chris stiles ]
Posts: 4035 | From: Berkshire | Registered: May 2007
| IP: Logged
|
|
seekingsister
Shipmate
# 17707
|
Posted
quote:
Originally posted by quetzalcoatl:
You can contribute, if you like, to an appeal fund for multi-millionaire Myleene Klass, so that she can pay her mansion tax (heavily sarcastic of course).
I oppose the mansion tax not because I think the rich shouldn't pay taxes, but because it's a blunt and ineffective instrument, and it will not stop at £2m properties.
Enforce the taxes we already have and if necessary tax assets for people who don't earn wages as their primary source of income, because physical assets can't be taken offshore. No one has responded to what happens to the guy who owns three £1m properties in London - he isn't going to get hit by the mansion tax but he certainly has more than £2m in assets.
[ 20. November 2014, 10:34: Message edited by: seekingsister ]
Posts: 1371 | From: London | Registered: May 2013
| IP: Logged
|
|
Doc Tor
Deepest Red
# 9748
|
Posted
quote:
Originally posted by seekingsister:
Earned income as in someone who pays taxes through PAYE. Not capital gains or investment income.
"So I can avoid paying tax on my £2million property if I'm paying PAYE on a £12k pa job someone's just invented for me? Sweet."
And that's why your idea won't work.
--------------------
Forward the New Republic
Posts: 9131 | From: Ultima Thule | Registered: Jul 2005
| IP: Logged
|
|
Leorning Cniht
Shipmate
# 17564
|
Posted
quote:
Originally posted by Doc Tor:
An LVT is really what we want. A Mansion tax is simply the first stage in getting it.
But the "mansion tax" is wrong - it's taxing the value of the (building + land), not the land. To get to an LVT, you have to start with the right assumptions.
[ 20. November 2014, 10:37: Message edited by: Leorning Cniht ]
Posts: 5026 | From: USA | Registered: Feb 2013
| IP: Logged
|
|
seekingsister
Shipmate
# 17707
|
Posted
quote:
Originally posted by Doc Tor:
quote:
Originally posted by seekingsister:
Earned income as in someone who pays taxes through PAYE. Not capital gains or investment income.
"So I can avoid paying tax on my £2million property if I'm paying PAYE on a £12k pa job someone's just invented for me? Sweet."
And that's why your idea won't work.
It will work, it just means that guy is exempt. If the person is actually doing a job and earning that money, then fine. The reality of course is that the type of job a very rich person would take would pay far more than £12k pa and then yield even more income tax revenue.
And if I own multiple properties with a combined value more than £2m but each is worth less than £1m, your mansion tax doesn't work.
Posts: 1371 | From: London | Registered: May 2013
| IP: Logged
|
|
quetzalcoatl
Shipmate
# 16740
|
Posted
quote:
Originally posted by seekingsister:
quote:
Originally posted by quetzalcoatl:
You can contribute, if you like, to an appeal fund for multi-millionaire Myleene Klass, so that she can pay her mansion tax (heavily sarcastic of course).
I oppose the mansion tax not because I think the rich shouldn't pay taxes, but because it's a blunt and ineffective instrument, and it will not stop at £2m properties.
Enforce the taxes we already have and if necessary tax assets for people who don't earn wages as their primary source of income, because physical assets can't be taken offshore. No one has responded to what happens to the guy who owns three £1m properties in London - he isn't going to get hit by the mansion tax but he certainly has more than £2m in assets.
Surely, one reason that taxes like this are being proposed, is that the rich will always find ways to dodge taxes, either through loop-holes, or clever accountancy, or just hiding the cash off-shore, or whatever. Properties are more difficult to hide, although just give it time, they will find a way.
I am just enjoying my Mrs Merton moment in relation to millionaire Myleene Klass.
--------------------
I can't talk to you today; I talked to two people yesterday.
Posts: 9878 | From: UK | Registered: Oct 2011
| IP: Logged
|
|
Doc Tor
Deepest Red
# 9748
|
Posted
quote:
Originally posted by Matt Black:
I ask again: why does Ed(other than blatant electioneering) see the need to reinvent the wheel rather than use the existing system more effectively?
Because the existing system relies on chasing money that is inherently difficult to pin down, especially when the same people who consult for HMRC on tax legislation are the same people who advise very rich people on how to find the loopholes in tax legislation. Bluntly put, the existing system can easily find all the "hard working families" but it sucks at grappling with complex shell companies deliberately designed to obfuscate.
And furthermore, that's exactly how the system's been designed: to find the low and medium wage workers, and look the other way for the rich and unearned wealth-getters.
So, given that's what the system does, you either make a system that penalises labour even better at penalising labour, or you do something different. I choose the something different.
--------------------
Forward the New Republic
Posts: 9131 | From: Ultima Thule | Registered: Jul 2005
| IP: Logged
|
|
Doc Tor
Deepest Red
# 9748
|
Posted
quote:
Originally posted by seekingsister:
If the person is actually doing a job and earning that money, then fine. The reality of course is that the type of job a very rich person would take would pay far more than £12k pa and then yield even more income tax revenue.
Your naivety is sweet, but oh so very easily exploitable.
--------------------
Forward the New Republic
Posts: 9131 | From: Ultima Thule | Registered: Jul 2005
| IP: Logged
|
|
seekingsister
Shipmate
# 17707
|
Posted
quote:
Originally posted by Doc Tor:
Your naivety is sweet, but oh so very easily exploitable.
Please do not condescend. I disagree with you and have proposed an alternative, not out of naivete but out of own education and understanding, thank you very much.
Posts: 1371 | From: London | Registered: May 2013
| IP: Logged
|
|
chris stiles
Shipmate
# 12641
|
Posted
quote:
Originally posted by seekingsister:
It will work, it just means that guy is exempt. If the person is actually doing a job and earning that money, then fine. The reality of course is that the type of job a very rich person would take would pay far more than £12k pa and then yield even more income tax revenue.
![[brick wall]](graemlins/brick_wall.gif)
'type of job' - the whole point is that the job is not 'real' in any sense of the word, it's just a mechanism used for tax arbitrage.
Posts: 4035 | From: Berkshire | Registered: May 2007
| IP: Logged
|
|
Doc Tor
Deepest Red
# 9748
|
Posted
quote:
Originally posted by Leorning Cniht:
But the "mansion tax" is wrong - it's taxing the value of the (building + land), not the land.
And for a triple post, that doesn't make it "wrong".
--------------------
Forward the New Republic
Posts: 9131 | From: Ultima Thule | Registered: Jul 2005
| IP: Logged
|
|
quetzalcoatl
Shipmate
# 16740
|
Posted
I think Doc Tor is bang on - PAYE and VAT nail the poor to the barn door; while the rich hire a clever accountant to make money disappear. But I don't expect Labour to correct this, as they are quite content with the filthy rich getting richer.
[ 20. November 2014, 10:56: Message edited by: quetzalcoatl ]
--------------------
I can't talk to you today; I talked to two people yesterday.
Posts: 9878 | From: UK | Registered: Oct 2011
| IP: Logged
|
|
seekingsister
Shipmate
# 17707
|
Posted
quote:
Originally posted by chris stiles:
'type of job' - the whole point is that the job is not 'real' in any sense of the word, it's just a mechanism used for tax arbitrage.
You do realize that the mansion tax doesn't exist yet, right?
You are bashing your head against the wall because my imaginary alternative has a method of avoidance. Well, that's what enforcement is for.
Mansion tax is just as avoidable. I split my £2m property into flats and rent them out, then buy a £1.9m property to live in.
Or I arrange to sell my £2m house to a shell company that employs me for £1.9m and then that shell company buys me a £1.9m house that I rent from it.
Posts: 1371 | From: London | Registered: May 2013
| IP: Logged
|
|
chris stiles
Shipmate
# 12641
|
Posted
quote:
Originally posted by seekingsister:
Please do not condescend. I disagree with you and have proposed an alternative, not out of naivete but out of own education and understanding, thank you very much.
No, you misunderstand the way in which the tax system could be used. The 'job' doesn't have to be real in any sense of the word.
It used to be common practice for contractors to operate inside a company in which they were the owner and director. This was for both reasons of limited liability as well as tax efficiency. They would pay themselves just enough income to stay under a particular threshold of their choosing - and then withdraw anything else by paying themselves dividends (taxed via CGT and not subject to NI). In no sense were those dividends the product of capital gains in the formal sense, it was just a mechanism used to arbitrage between different tax regimes for incomes vs investment returns.
Posts: 4035 | From: Berkshire | Registered: May 2007
| IP: Logged
|
|
seekingsister
Shipmate
# 17707
|
Posted
quote:
Originally posted by chris stiles:
No, you misunderstand the way in which the tax system could be used. The 'job' doesn't have to be real in any sense of the word.
I'm not misunderstanding anything.
Some rich guy owns three properties and doesn't want to be taxed on the one he lives in, which is the most expensive. He asks his buddy at a FTSE company to throw him a non-exec board or advisory position that pays £40K per year. He'll still be taxed on all of his other assets. So yes he avoids one part of my suggestion but not the other.
If his main residence was worth £1.5m, he wouldn't pay mansion tax at all even if his combined assets exceeded £2m.
So again - why is my idea so terrible and naïve?
Posts: 1371 | From: London | Registered: May 2013
| IP: Logged
|
|
|
|
Eutychus
From the edge
# 3081
|
Posted
quote:
Originally posted by leo:
quote:
Originally posted by Martin60:
What did Jesus' hard man do to he who buried His wealth?
The slave who buried his wealth was thrown out of the city - therefore the slave was Jesus himself who kept torah and was crucified outside the city.
![[Paranoid]](graemlins/paranoid.gif)
That has to be the most, um, original interpretation of that parable I have ever stumbled across.
--------------------
Let's remember that we are to build the Kingdom of God, not drive people away - pastor Frank Pomeroy
Posts: 17944 | From: 528491 | Registered: Jul 2002
| IP: Logged
|
|
leo
Shipmate
# 1458
|
Posted
quote:
Originally posted by Gwai:
Yes! Why should their money be immune to tax when other people who don't have the money to save as much have to pay taxes?
Because all I own is tied up in my house - which i paid for out of earned income, not inherited income, which had already been taxed.
Why pay tax twice - and pay again a third time when I die?
If I thought tax was redistribution to the poor, I'd be Ok with it. But it isn't - it goes to private contractors who run what used to be public services.
--------------------
My Jewish-positive lectionary blog is at http://recognisingjewishrootsinthelectionary.wordpress.com/
My reviews at http://layreadersbookreviews.wordpress.com
Posts: 23198 | From: Bristol | Registered: Oct 2001
| IP: Logged
|
|
|
|
Matt Black
Shipmate
# 2210
|
Posted
quote:
Originally posted by Doc Tor:
quote:
Originally posted by Matt Black:
I ask again: why does Ed(other than blatant electioneering) see the need to reinvent the wheel rather than use the existing system more effectively?
Because the existing system relies on chasing money that is inherently difficult to pin down, especially when the same people who consult for HMRC on tax legislation are the same people who advise very rich people on how to find the loopholes in tax legislation. Bluntly put, the existing system can easily find all the "hard working families" but it sucks at grappling with complex shell companies deliberately designed to obfuscate.
And furthermore, that's exactly how the system's been designed: to find the low and medium wage workers, and look the other way for the rich and unearned wealth-getters.
So, given that's what the system does, you either make a system that penalises labour even better at penalising labour, or you do something different. I choose the something different.
But I don't see how the mansion tax will be any different - avoidance will still abound.
--------------------
"Protestant and Reformed, according to the Tradition of the ancient Catholic Church" - + John Cosin (1594-1672)
Posts: 14304 | From: Hampshire, UK | Registered: Jan 2002
| IP: Logged
|
|
Doc Tor
Deepest Red
# 9748
|
Posted
quote:
Originally posted by Matt Black:
But I don't see how the mansion tax will be any different - avoidance will still abound.
How do you propose avoiding paying tax on a piece of property I can physically point to? The only quibble might be who to send the bill to, but that's what an updated Land Registry will sort out.
--------------------
Forward the New Republic
Posts: 9131 | From: Ultima Thule | Registered: Jul 2005
| IP: Logged
|
|
Angloid
Shipmate
# 159
|
Posted
quote:
Originally posted by leo:
quote:
Originally posted by Gwai:
Yes! Why should their money be immune to tax when other people who don't have the money to save as much have to pay taxes?
Because all I own is tied up in my house - which i paid for out of earned income, not inherited income, which had already been taxed.
Why pay tax twice - and pay again a third time when I die?
If I thought tax was redistribution to the poor, I'd be Ok with it. But it isn't - it goes to private contractors who run what used to be public services.
But I didn't think your house was worth £2million, Leo. Of course everyone deserves somewhere to live and that basic provision shouldn't be taxed. But nobody needs a mansion. Even in (most parts of) London £2 million will buy a fairly decent family home. And the big problem for places like Kensington and Chelsea isn't that well-off people might be taxed, but the scandalous price inflation which means that poor and ordinary people can't afford to live there. Yes, perhaps some interim provision could raise the tax threshold in places like that, but government action is needed urgently to curb prices and provide genuinely affordable housing for those who need to live there.
To say 'why should I pay tax on my property when I have already paid it on my income?' is reminiscent of those who whinge about 'having' to pay private school fees when they have already paid for state schools through their taxes. If they choose to buy superior provision they can't complain about having to pay for it.
Posts: 12927 | From: The Pool of Life | Registered: May 2001
| IP: Logged
|
|
Anglican't
Shipmate
# 15292
|
Posted
quote:
Originally posted by Angloid:
Even in (most parts of) London £2 million will buy a fairly decent family home.
Given the rise in property prices in London, perhaps we should call this the 'Central London Family Home Tax'?
Posts: 3613 | From: London, England | Registered: Nov 2009
| IP: Logged
|
|
seekingsister
Shipmate
# 17707
|
Posted
quote:
Originally posted by Angloid:
But nobody needs a mansion. Even in (most parts of) London £2 million will buy a fairly decent family home. And the big problem for places like Kensington and Chelsea isn't that well-off people might be taxed, but the scandalous price inflation which means that poor and ordinary people can't afford to live there. Yes, perhaps some interim provision could raise the tax threshold in places like that, but government action is needed urgently to curb prices and provide genuinely affordable housing for those who need to live there.
1. How does making an expensive place to live more expensive - by adding a tax - provide any relief to people who can't find affordable housing?
2. You find it wrong to spend money on more house than one needs. If instead of spending £2m on a home, a rich family spends £1m on it, where is the additional revenue to HMRC or benefit to the economy? A £2m home generates £140,000 in stamp duty (7%); a £1m home £50,000 (5%). The rich family will stick that second million in Jersey or the Caribbean. So where's the benefit?
3. Again no one has addressed how the mansion tax has any impact on someone who owns multiple very expensive properties across the country as long as they all fall below the £2m threshold. (Hint: it doesn't have one).
Posts: 1371 | From: London | Registered: May 2013
| IP: Logged
|
|
Angloid
Shipmate
# 159
|
Posted
quote:
Originally posted by seekingsister:
How does making an expensive place to live more expensive - by adding a tax - provide any relief to people who can't find affordable housing?
It doesn't. That's why I said that an urgent problem is to tackle criminal price inflation. A mansion tax is probably a crude instrument but at least it is aimed at those who are able to pay. The bedroom tax is not only crude, but cruel and immoral.
Posts: 12927 | From: The Pool of Life | Registered: May 2001
| IP: Logged
|
|
no prophet's flag is set so...
Proceed to see sea
# 15560
|
Posted
I kind of get the idea of taxing windfall profits. But the windfall doesn't have to be realized until you sell from what I understand upthread. Same thing in Canada for dwellings that are not your primary residence.
We bought life insurance on a second property, such that all taxes owing will be paid by the life insurance.
So my question is why not buy life insurance on the potential tax owing. Which is what we did with the cottage. A "second to die" policy (meaning it pays only when both wife and I are both dead) for $1 million (close to €600,000) costs about $3,800 per year, and we bought this in the 6th decade of our lives. Thus, our children can decide to keep or sell when we're gone.
If you cannot afford the life insurance, then can you get a line of credit against the value of the property? This again is how we bought the cottage. A line of credit is a demand loan such that you can pay just the interest and leave the principal. It's kind of like a mortgage you pay back to yourself.
( A financial planner or tax advisor can be your friend. )
--------------------
Out of this nettle, danger, we pluck this flower, safety.
\_(ツ)_/
Posts: 11498 | From: Treaty 6 territory in the nonexistant Province of Buffalo, Canada ↄ⃝' | Registered: Mar 2010
| IP: Logged
|
|
Matt Black
Shipmate
# 2210
|
Posted
quote:
Originally posted by Doc Tor:
quote:
Originally posted by Matt Black:
But I don't see how the mansion tax will be any different - avoidance will still abound.
How do you propose avoiding paying tax on a piece of property I can physically point to? The only quibble might be who to send the bill to, but that's what an updated Land Registry will sort out.
We can already physically point at property; it doesn't stop avoidance.
--------------------
"Protestant and Reformed, according to the Tradition of the ancient Catholic Church" - + John Cosin (1594-1672)
Posts: 14304 | From: Hampshire, UK | Registered: Jan 2002
| IP: Logged
|
|
seekingsister
Shipmate
# 17707
|
Posted
quote:
Originally posted by Angloid:
quote:
Originally posted by seekingsister:
How does making an expensive place to live more expensive - by adding a tax - provide any relief to people who can't find affordable housing?
It doesn't. That's why I said that an urgent problem is to tackle criminal price inflation. A mansion tax is probably a crude instrument but at least it is aimed at those who are able to pay. The bedroom tax is not only crude, but cruel and immoral.
They're both terrible policies.
Posts: 1371 | From: London | Registered: May 2013
| IP: Logged
|
|
L'organist
Shipmate
# 17338
|
Posted
Any mansion tax is going to be unworkable for the simple reason that 99% of the country won't have property that falls into the £2,000,001 price range.
Don't believe me? I did a simple search looking at: Hastings, Rhondda-Cynon-Taff, Burton-on-Trent and Warrington and there were no properties in the house bracket in any of those areas. In fact most didn't have anything over £1.75m.
The point mentioned above about people who've been in the same house for decades is worth bearing in mind: why should the elderly - and it will mainly be older people - be penalised for living in a family home that the insane property market now prices at more than £2m?
The whole idea of a mansion tax is pandering to the politics of envy: it is the sort of proposal that goes down well in sixth form common rooms and should be consigned to file 13. The fact that those clamouring for the mansion tax say it is for the NHS doesn't make it anymore sensible or acceptable.
What the NHS needs more than anything else is a coherent strategy and list of priorities, setting out clearly the limits of what state funding will cover. Unfortunately, the NHS has become such a sacred cow that any suggestion that it may not be perfect or that certain services should be restricted, curtailed or charged-for immediately gets a knee-jerk reaction that people are out to 'destroy' the institution. (The same can be said of the welfare system as well.)
--------------------
Rara temporum felicitate ubi sentire quae velis et quae sentias dicere licet
Posts: 4950 | From: somewhere in England... | Registered: Sep 2012
| IP: Logged
|
|
chris stiles
Shipmate
# 12641
|
Posted
quote:
Originally posted by seekingsister:
3. Again no one has addressed how the mansion tax has any impact on someone who owns multiple very expensive properties across the country as long as they all fall below the £2m threshold. (Hint: it doesn't have one).
There are a number of answers for this; firstly that a so-called mansion tax is a start, not an end goal. In the longer term, wealth in general will be probably have to be taxed in some way/
Secondly any tax will have a threshold below which you are tax exempt (yes we could set the limit for a single house lower - but then you were complaining about taxes being expanded earlier in the thread).
The tax itself would kick in fairly gradually - and is a fairly small fraction of the rent for a property of that size (which is why the argument about possible children who may work as teachers and nurses made very little sense).
And yes, we probably need to shift the burden of taxes towards non-primary residences.
Posts: 4035 | From: Berkshire | Registered: May 2007
| IP: Logged
|
|
Doc Tor
Deepest Red
# 9748
|
Posted
quote:
Originally posted by L'organist:
The whole idea of a mansion tax is pandering to the politics of envy
'Politics of envy' was invented by very rich people so that poor people would hate destitute people.
quote:
A banker, a Daily Mail reader and a benefit claimant are sat at a table. On a plate in the middle are 12 biscuits. The banker takes 11 biscuits for himself, then turns to the Daily Mail reader and says – “watch out for that benefit claimant, he’s after your biscuit."
That's the politics of envy, right there, and it has nothing to do with expecting very rich people to pay their taxes.
--------------------
Forward the New Republic
Posts: 9131 | From: Ultima Thule | Registered: Jul 2005
| IP: Logged
|
|
leo
Shipmate
# 1458
|
Posted
quote:
Originally posted by Angloid:
But I didn't think your house was worth £2million, Leo. Of course everyone deserves somewhere to live and that basic provision shouldn't be taxed.
Nowhere near - it's the principle - and if I'd bought a house in London, the price would creep up - and if I'd bought it 50 years ago rather than 35, I could be in that bracket yet unable to afford to heat it etc.
--------------------
My Jewish-positive lectionary blog is at http://recognisingjewishrootsinthelectionary.wordpress.com/
My reviews at http://layreadersbookreviews.wordpress.com
Posts: 23198 | From: Bristol | Registered: Oct 2001
| IP: Logged
|
|
Doc Tor
Deepest Red
# 9748
|
Posted
quote:
Originally posted by leo:
it's the principle - and if I'd bought a house in London, the price would creep up - and if I'd bought it 50 years ago rather than 35, I could be in that bracket yet unable to afford to heat it etc.
So you'd rather freeze to death than realise your very significant assets? I'm really not sure what to make of that.
--------------------
Forward the New Republic
Posts: 9131 | From: Ultima Thule | Registered: Jul 2005
| IP: Logged
|
|
itsarumdo
Shipmate
# 18174
|
Posted
The mansion tax is possibly one idea that might work if value creep was not an issue. But it detracts attention fro all these big corporations squirrelling money away from taxation through complex offshore ownership arrangements.
--------------------
"Iti sapis potanda tinone" Lycophron
Posts: 994 | From: Planet Zog | Registered: Jul 2014
| IP: Logged
|
|
L'organist
Shipmate
# 17338
|
Posted
Value creep is a serious issue: look at the so-called Christmas Bonus that Edward Heath introduced in 1972.
Seet at £10 in 1972 it is still £10 - but to keep pace with inflation it should be somewhere around £98.
The other issue is just how are these mansions going to be valued? We all know just how out-of-date the notional Rateable Values used for calculating Council Tax are; can you see local government (for it will come down to them) having the means or resources to undertake a reliable survey?
--------------------
Rara temporum felicitate ubi sentire quae velis et quae sentias dicere licet
Posts: 4950 | From: somewhere in England... | Registered: Sep 2012
| IP: Logged
|
|
Doc Tor
Deepest Red
# 9748
|
Posted
quote:
Originally posted by L'organist:
The other issue is just how are these mansions going to be valued? We all know just how out-of-date the notional Rateable Values used for calculating Council Tax are
Well, given that Rateable Values were actually a thing once, it's not much of a leap of imagination to believe they could be a thing again in the future.
--------------------
Forward the New Republic
Posts: 9131 | From: Ultima Thule | Registered: Jul 2005
| IP: Logged
|
|
Penny S
Shipmate
# 14768
|
Posted
Whenever I hear someone invoke "the politics of envy" I feel the urge to bust into a certain piece by Cole Porter. The one which has had the point blunted by being applied to a quiz show with a large prize. The one which does down the wanting of millionairish stuff.
Most people complaining about the inadequate taxing of the rich aren't doing it for themselves. They are doing it for others. Like the inhabitants of an estate built to house the less well off which has been bought by a very rich Tory*, who first put up the genuinely affordable rents to "market level", and then, possibly because of the bad publicity, sold it on to an American property company which is in bad odour west of the Atlantic, and which is now evicting people who have lived their lives there and do not want to be forced into hostels where entire families live in rooms designed for single nurses waiting for ever receding chances to move into council housing.
I don't want to live in any of his country estates (that's something I'd hate), but I don't want him to live off the penury of the inhabitants of urban estates, either. That isn't envy. That's the politics of justice.
*Richard Benyon
Posts: 5833 | Registered: May 2009
| IP: Logged
|
|
L'organist
Shipmate
# 17338
|
Posted
Cole Porter's song was nothing at all to do with a quiz show, it was about choosing True Love over money - it was written for High Society and sung by Frank Sinatra and Celeste Holm.
Your bit about Richard Benyon MP is not quite correct.
First, the family company only bought a 10% share of the New Era Estate company a matter of months ago, and that was as part of a contract to manage the properties - commercial as well as residential - on behalf of the US owners of the remaining 90%, Westbrook Partners Investment Group. Since the action group decided to target the Benyon family through the MP they 10% share has been sold and the Benyon family have withdrawn from any involvement with the New Era Estate.
The New Era share was not part of the Benyon family's long-standing property holdings in North London which are nearer the de Beauvoir estate and out towards Gidea Park; NE was meant to be an investment by a subsidiary property management company only.
As landlords around Englefield the Benyon family have a good record as landlords, which is why richard Benyon's father was on the board of the Peabody and Ernest Cook trusts.
No, I'm not an apologist for Mr Benyon but one should get one's facts right.
--------------------
Rara temporum felicitate ubi sentire quae velis et quae sentias dicere licet
Posts: 4950 | From: somewhere in England... | Registered: Sep 2012
| IP: Logged
|
|
seekingsister
Shipmate
# 17707
|
Posted
quote:
Originally posted by chris stiles:
quote:
Originally posted by seekingsister:
3. Again no one has addressed how the mansion tax has any impact on someone who owns multiple very expensive properties across the country as long as they all fall below the £2m threshold. (Hint: it doesn't have one).
There are a number of answers for this; firstly that a so-called mansion tax is a start, not an end goal. In the longer term, wealth in general will be probably have to be taxed in some way/
Secondly any tax will have a threshold below which you are tax exempt (yes we could set the limit for a single house lower - but then you were complaining about taxes being expanded earlier in the thread).
The tax itself would kick in fairly gradually - and is a fairly small fraction of the rent for a property of that size (which is why the argument about possible children who may work as teachers and nurses made very little sense).
And yes, we probably need to shift the burden of taxes towards non-primary residences.
OK, so now we're getting somewhere.
If the government wants to tax wealth, then it should come up with a policy that achieves this as effectively as possible. There's public support for it, and the most popular economics book in recent history addresses this as well (Piketty's Capital in the 21st Century).
It is wrong to tax people for owning expensive houses as a random attempt to get at rich people. Because owning an expensive house in and of itself is not a great indicator of liquid wealth, especially if that is someone's primary residence and only property owned in the UK. (This doesn't even get into the issue of financing an expensive house with a hefty mortgage).
It's not OK to implement a bad tax because you can't think of or figure out a way to implement a good one.
What we all want is to make sure that people who make a lot of money on non-productive activity cannot squirrel that money away offshore to avoid tax. So taxing physical assets is a good idea, but why is it limited to houses? What about land, businesses, investments? Don't we know who really is wealthy by weighing all of this in aggregate?
The mansion tax as proposed would go after someone who bought a house in London in the 1970s and doesn't own any other major asset, but would totally miss out on a person from abroad who owns 5 flats in Chelsea, none of which is occupied. So it is wrong, in my view. The second person is wealthy, the first just bought property a long time ago.
Posts: 1371 | From: London | Registered: May 2013
| IP: Logged
|
|
itsarumdo
Shipmate
# 18174
|
Posted
The fact is that (particularly) after the financial crisis, the expectations of the general population as to shat should be provided, maintained, cared for and supported by the state is unrealistic compared to the wealth that can be easily generated through reasonable taxation. None of the parties really have a solution, because they are not prepared to bite the bullet and tell their voters that the state cannot fund e.g. universal health care to the extent to which we have become accustomed. We can't provide pensions to an increasingly old society with the generosity that has marked the past 40 years. Something has got to give. The NHS could save about 1/3 of its budget if it stopped believing manufacturers drug claims, but there are so many pharma-sponsored "user" lobby groups that the public outcry would be politically unsustainable. We could probably pay off the national debt once more if we really taxed corporate profits as we should instead of the tax office doing sweet deals to claw a few pennies back. But both the last labour govt and this govt seem to have the idea that it's better to go for the small fish than risk (what?) with the bigger ones. Mansion tax is in many ways another small fish tax. The people who have a lot of money will continue to be able to adjust their account books so that they don't pay it.
--------------------
"Iti sapis potanda tinone" Lycophron
Posts: 994 | From: Planet Zog | Registered: Jul 2014
| IP: Logged
|
|
seekingsister
Shipmate
# 17707
|
Posted
quote:
Originally posted by itsarumdo:
The fact is that (particularly) after the financial crisis, the expectations of the general population as to shat should be provided, maintained, cared for and supported by the state is unrealistic compared to the wealth that can be easily generated through reasonable taxation.
This is the crux of it and a very bitter pill for many to swallow.
The flip side of "How can we raise the revenue to fund the programs that we want?" is "How can we fund the programs that we need with the revenue that we have?"
Posts: 1371 | From: London | Registered: May 2013
| IP: Logged
|
|
la vie en rouge
Parisienne
# 10688
|
Posted
seekingsister, what you’re not explaining is why liquid wealth should be more taxable than other assets.
In France (where we get taxed into the ground, but that’s another story), wealth tax (impôt de solidarité sur la fortune) has existed for so long no one considers it all that controversial. It is calculated on the basis of all of a person’s (or a couple’s) assets, including real estate, cars, artworks, jewellery etc. IIRC, you get a certain amount of credits for your primary residence. You are liable for it if your net assets are 1.3M€ or more.
ISTM that the crux of the issue is this: is a person to be considered wealthy if their money is tied up in non-financial assets? I would argue that they should. As Doc Tor pointed out to leo, a person living in a £2 million home who finds themselves short of cash for other things has a rather simple solution available to them: sell the house and move into a cheaper one. In the case of the hypothetical granny who bought her house for 2’6” back in the day, she can buy a perfectly nice smaller house for a cool million quid (she most likely lives alone) and then put the rest in the bank for a *very* comfortable retirement. Her wealth is tied up in assets, but my hypothetical granny looks pretty wealthy to me.
OTOH there are plenty of people living in much smaller and less salubrious properties who can’t afford their heating, and they have no assets which they can potentially realise to do anything about it. Their options are considerably more limited. They are the people who should be regarded as genuinely impoverished.
All that said, I do think mansion tax is rather too blunt an instrument. If the government really wants to tax wealth, I think a properly thought-out wealth tax that takes into account all of a person’s assets is probably better than simply looking at their home.
--------------------
Rent my holiday home in the South of France
Posts: 3696 | Registered: Nov 2005
| IP: Logged
|
|
Anglican't
Shipmate
# 15292
|
Posted
quote:
Originally posted by la vie en rouge:
In the case of the hypothetical granny who bought her house for 2’6” back in the day, she can buy a perfectly nice smaller house for a cool million quid (she most likely lives alone) and then put the rest in the bank for a *very* comfortable retirement. Her wealth is tied up in assets, but my hypothetical granny looks pretty wealthy to me.
This argument also completely ignores the emotional involvement one might have with a house. The house could be the one where our hypothetical granny first lived with her husband and brought up her children and which brings her a lot of treasured memories. The effect of the Central London Family Home Tax is to say ‘Tough. Pay up or get out’.
Posts: 3613 | From: London, England | Registered: Nov 2009
| IP: Logged
|
|
Sioni Sais
Shipmate
# 5713
|
Posted
quote:
Originally posted by Anglican't:
quote:
Originally posted by la vie en rouge:
In the case of the hypothetical granny who bought her house for 2’6” back in the day, she can buy a perfectly nice smaller house for a cool million quid (she most likely lives alone) and then put the rest in the bank for a *very* comfortable retirement. Her wealth is tied up in assets, but my hypothetical granny looks pretty wealthy to me.
This argument also completely ignores the emotional involvement one might have with a house. The house could be the one where our hypothetical granny first lived with her husband and brought up her children and which brings her a lot of treasured memories. The effect of the Central London Family Home Tax is to say ‘Tough. Pay up or get out’.
Believe it or not, the 'Bedroom tax' also has that emotional tie to the home, but while the granny you mention has realisable assets the benefits climaants are unlikely to have the resources to do that.
--------------------
"He isn't Doctor Who, he's The Doctor"
(Paul Sinha, BBC)
Posts: 24276 | From: Newport, Wales | Registered: Apr 2004
| IP: Logged
|
|
Printer-friendly view
