The Taxcollector's Alliance have churned out more misinformation in The Times:
It’s not just incomes that politicians have increasingly helped themselves to. The amount that people have had to pay the government to buy a home has hugely increased over the past half century.
According to the building society Nationwide, in 1958 the average house price was £2,050. Stamp duty wasn’t payable until you bought a house for £3,500 — 71 per cent more than the average. Even then it was levied at 0.5 per cent.
If that were still the case today, you wouldn’t pay any stamp duty on homes worth less than £323,000. Instead, even after the reforms made at the autumn statement, families buying the average house today for £271,000 have to write the government a check for a whopping £3,550.
a) Does this man not think about what he writes? He describes £3,550 in SDLT when you buy a house to be a "whopping" amount of money. Fair enough, that's his opinion and he's entitled to it. But what about the other £271,000 a buyer has to hand over? Is that a mere trifle?
b) Adjusted for inflation, £2,050 in 1958 is £43,144 today, i.e. close to build cost and the land was more or less free. Two-thirds of the £271,000 today is land value, it is privately collected tax.
c) He fails to mention that for all but the cheapest homes, Council Tax is considerably less than 1958 Domestic Rates would be, adjusted for inflation. Thus completely disproving his next point...
... a YouGov poll late last year showed 72 per cent of the British public in favour of a so-called mansion tax. Given that Labour has already allocated to the NHS the projected £1.2 billion that it will raise, if revenues fall short they will have to either cut NHS spending, or increase the tax. There’s no doubt which option they’d go for.
If the mansion tax is introduced, it will be here to stay and most of the 72 per cent in favour will end up paying the price. We must ensure it’s never allowed to see the light of day.
a) If this were a Poll Tax, then yes, the 72 per cent ought to be worried about it. But the Mansion Tax is an ad valorem tax. So even if it were 1% or 2% of the price of a house, people in average houses wouldn't be paying that much. Just like people on low to average incomes don't pay much income tax (they pay far more in NIC and VAT than in income tax).
b) House prices would fall by the amount of the tax, so future buyers will be unaffected and, after a few decades, everybody will be unaffected. You could argue that some people who inherit in future will be worse off than they would have been, but other people will be better off, so that cancels out.
c) The Mansion Tax or LVT or whatever has exactly the opposite effect to government deficits. LVT shifts taxes from the future to the present (and ultimately, into the past), government deficits shift taxes from the present into the future.
Call me boring, but I actually do worry about government deficits* and the national debt, and I do support LVT over other forms of taxation, so I'm at least consistent.
* I voted Labour in 2001 because from 1997 - 2001, they managed to reduce the national debt as a % of GDP slightly. History proved me wrong on that one.
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