#mansiontax

[taxtherich100]

Say yes to mansion tax! #taxtherich #mansiontax #ferrari

[countymn]

Hundreds of St. Paul Property Owners to get $2M Light Rail Tax Assessment | minnesota.allembru.com

[mattburrows24-blog]

Mansion Tax is a Mistake

The Labour opposition has submitted a motion on the Mansion Tax to be voted on next week.  I understand why LibDem MPs will be sorely tempted to vote for it.

It is superficially attractive and comes from a good place. It will raise money helping to fund either tax cuts for the less well-off or to help pay for services (maybe).  It will be popular for this reason especially at a difficult time in which public expenditure is most stretched and incomes of ordinary people are being squeezed. To be fair it also deals with the issue of an accumulation of unproductive wealth from a relatively small set of people.

The first problem with the Mansion Tax is that it won’t remain a Mansion Tax for long. Once the principle of this tax has been introduced, bit by bit, I expect Governments will find a way to raise further revenues, using this tax, by lowering the threshold and ultimately nearly every homeowner will be paying it. I favour the principle of progressive taxation, but this is not the one to choose.  

Secondly, there is the obvious point about the asset wealthy, cash poor retired widow being caught by this tax and it is no less valid for that. Why should she have to move from her home to which she has a sentimental attachment?

Thirdly, where I come from in South West London there are many properties that will be over the £2m threshold and four seats in this area are held by LibDem MPs. Simon Jenkins alluded to the political difficulty of the tax in a piece in the Guardian a few months ago.  Since the LibDems support comes largely (but not exclusively) from the middle-class, this policy is likely to be politically disadvantageous in seats the Party needs to hold in 2015. 

I should suggest what I would choose in its place.  An introduction of an additional "I" band for Council Tax is not perfect, but to me it sits more easily with instinctive and balanced sense of fairness. As Jenkins has said, the Welsh Assembly Government has already embarked on this. Such a move would not obviate the need for a resetting of the property values (set in 1991) in due course.        

Enlightened as it is, Mansion Tax is a mistake and I hope LibDem MPs will vote against Labour´s motion on Tuesday.