What is it with this country and a willingness to tax anything apart from income, accompanied by an insistence that anything else is somehow not a tax at all? Ed Balls might get away with the Mansion Tax if he insists on calling it the Spare Home Subsidy.
It was and is obscene to tax elderly people out of their homes because it had arbitrarily been decided that those were now too big for them.
It is no less appalling a proposal to tax people on what, unless it happens to be for sale, is the purely notional value of an asset which they might not necessarily own anyway, and which in any case they could not possibly sell unless they were expected to go and live up a tree or something.
But we sold the pass on this one more than 20 years ago, when we effectively restored the hated rates, and with them all their impeccably middle and upper-middle-class exemptions for students, clergy, second homes, and so on. Paid for by a hike in VAT, which was hardly the obvious way of helping the poor.
Instead, among other things, we need a tax on the productive value of land per acre, other than that occupied by the homes of the less well off, perhaps making possible the abolition of stamp duty, and in any event establishing and enforcing the principle that no one should own land other than in order to make use of it; this was proposed by Andy Burnham when he was a candidate for Leader of the Labour Party.
There must also be a statutory requirement of planning permission for change of use if it is proposed to turn a primary dwelling into a secondary dwelling, a working family home into a weekend or holiday home.
In answer to your first question, it's called behavioural economics. Income tax is a "visible tax" since it comes straight out of your wages and people are thus more conscious of it, whereas indirect taxes (VAT etc) or "stealth taxes" are more hidden as they're bundled in with other things such as the price of alcohol petrol etc and you technically don't have to buy these things. Politicians therefore prefer them as they're less visible and thus less contentious with voters than income tax rises.
ReplyDeleteIt's outright fraud of course since you're paying the same amount either way.
Gordon Brown was a master of this smoke-and-mirrors economics as Chancellor; the Mail used to do a run-down of all the "stealth taxes " he introduced in every Budget while making a song and dance of the promise "not to raise the basic rate of income tax".
Brown would have taxed fresh air if he could.
Bless.
DeleteI do love that first paragraph. Imagine truly believing that you are the first person ever to know these things.
And still getting them ever so slightly wrong.
Bless.
I am surprised Ukip haven't gone for a land value tax. It is very lower middle class insurgent and anti-Bullingdon. Some of their populist policies this week have been amazingly left wing, Reckless must not have got the memo.
ReplyDeleteThey do not know what they are cheering at UKIP events. They just cheer anyway. I honestly cannot think of any other explanation.
DeleteDid you see that presentation of medals, half of them to people who had not even turned up? It was like a parade of characters from a very bad early 1990s sitcom.
"enforcing the principle that no one should own land other than in order to make use of it"
ReplyDeleteOnce a theologian, David.
Indeed. The Universal Destination of Goods.
DeleteParagraphs 2401 to 2463 of the Catechism of the Catholic Church, with their copious Biblical and other footnotes.