Hugo Rifkind

Why my friends love the idea of a nasty, stupid mansion tax

Plus: nightwear visions of MPs in their PJs

4 October 2014

9:00 AM

4 October 2014

9:00 AM

I see all the flaws with a mansion tax, I really do. And yet some little piece of me, some tribal chip within my soul, rejoices at the thought of one. So do not expect the sympathy of the young, you owners of ‘perfectly normal houses’, now classed, however bizarrely, as the homes of the super-rich. For they will turn away from you when the taxman comes knocking, with a sudden geronticidal steel in their eyes. And you may be hurt, and you may feel righteously aggrieved. But do not be surprised.

I live in London, in a house which is not a mansion. Indeed, it is probably not even half of a mansion. For seasoned watchers of property in London — which is many people in London — that brief description (particularly the ‘probably’) will be enough for you to pinpoint my circumstances. It’s a terrace in a decentish part of London, near a goodish school. A hundred miles north they would keep goats in a tumbly wreck like this, or more likely have knocked it down to build something more sensible and less picturesque. Yet here and now, I am among the golden elect. Yes, I have a handful of peers who live in better homes. But I have many, many more who live in worse.

These are not society’s disadvantaged, not even nearly. Nor are they the very young, with unknowable futures full of possibility. They are graduates and professionals in their thirties or forties. Often they have a kid or two and they cram themselves into garden flats, if they are lucky. Barring massive inheritance or lottery win, these people — and there are legions of them — will never afford the likes of my probably-not-even-half-a-mansion, unless they leave their city, go north and kick out the aforementioned goats. Work hard, strive, save; nope, it just isn’t going to happen. And that’s not prophesy. That’s maths.

So if you are to take anything from this column, then let it be a simple appreciation of the sheer infuriating, dangerous tactlessness — there is no other word; it is tactlessness — of telling these people that a £2 million house is a perfectly normal one. Because in doing so, you are also reminding them that something so mundane as perfect normality has become a thing they will never, ever, even nearly afford.


That’s it. That’s my whole point. I don’t defend Labour’s mansion tax ­proposal — I think it is nasty and stupid. ­Clearly, it will widen inequality, not diminish it, for London has no shortage of people prepared to buy £2 million houses, tax or not. Enforcement will be an expensive disaster. Worst of all, it will tangibly bugger up some people’s lives, and I’m not a fan of the state buggering up lives, be it through mansion taxes or bedroom taxes or other taxes in between. Fix the farce of council tax, by all means, but don’t do this. It is the politics of envy. Of course it is. Of course.

Yet envy isn’t always irrational. So whether this ever happens or not, you happy old folk in your perfectly normal houses, spare a thought for the world you have left behind. And if HMRC ever does come scraping at your door, try to understand the curled lip of your exact counterparts 30 years down the line. Who may see your problems and acknowledge them, but who will also struggle, in all brutal honesty, to give any sort of a damn.

The pyjamas of power

Anyway, enough of all that. Let’s talk pyjamas. Specifically, let’s talk paisley pyjamas. Never mind what poor Mr Newmark had hanging out of his; concentrate on the garment itself. You never think of politicians in pyjamas. Although now I’ve started, and I just can’t stop.

David Cameron, I suspect, used to sleep in tracky bottoms and a Smiths T-shirt until really quite recently. These days, though, it’ll be a suit of something expensive and slinky, maybe black satin, or green. While Ed Miliband’s pyjama situation you just know will be chaos. Possibly he still wears the now tight and farcical Thomas the Tank Engine ones he had when he was 11. Keeps meaning to buy new ones, never does.

Ed Balls will sleep in black shorts and string vest. I am certain of this, but cannot say why. Likewise, I think we can all be sure that William Hague has — if only ­latterly — taken to sleeping in a kaftan. George Osborne, if he does not sleep in a dinner jacket, in a coffin, probably wears boxer shorts and a T-shirt he owned as a Young Conservative. Chuka Umunna will sleep in only Calvin Klein briefs, all the better to catch a glimpse of himself in the mirror on his ceiling. Eric Pickles I see in a giant romper suit. I wish I did not see this. But I do.

Nigel Farage will sleep in his clothes, probably in a chair. Theresa May will not sleep, so this will not be an issue. Alex Salmond may have some sort of slimy cocoon, as larvae do. Nick Clegg will sleep nude, for all Liberal Democrats do. Except for Vince Cable, who will wear a sensible BHS buttoning two-piece, unironed and probably maroon.

Hugo Rifkind is a writer for the Times.

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Show comments
  • sarah_13

    You are right the “mansion tax” is nasty. The reality is that it will hit, as their bad intentioned taxes always do, those who cannot afford it most. Real millionaires and billionaires will be unmoved by an extra £12k per year tax but everyone else will struggle terribly and be forced to sell.

    • Des Demona

      What percentage of people living in 2million plus homes do you think are not millionaires?

      • sarah_13

        I don’t know, do you? How many are mortgaged up to the hilt in order to live where they live? How many have only their homes and would have to have to sell to get money to pay their?

        • Des Demona

          Odd. the same people demanding that poor council house tenants who can’t afford the bedroom tax should move are the same ones crying foul when something similar hits the rich.

          In any event, the proposals include provisions for those who are cash poor but asset rich.

          • Someone

            The provisions you speak of, include sticking a lean on someone’s estate when they die. That’s not a provision. That’s outright theft.

            Here’s the difference between the poor council house tenants who can’t afford the bedroom tax you point out, relative to the ‘something similar’ hitting the rich:
            1) The bedroom tax isn’t a tax. It’s a reduction in subsidy. A state benefit isn’t earned income. It’s something the state (read taxpayer) gives out benevolently to help people with the cost of housing. We have a spending problem not a tax problem, therefore you cut benefits you give out to reflect the fact that you’re spending more than you’re getting in tax.
            2) A tax on the value of a property is extremely difficult to do given how values of property fluctuate. If we were to ever go through a housing crash (and granted the BoE doesn’t look likely to let that natural market cycle occur), the number of properties caught by the tax would reduce. Ergo, the tax revenue would reduce. Therefore the government would then have not just a spending problem, but a revenue problem too. The only option would be to move the threshold for this tax down the value ladder, catching more people.
            3) In the event of house prices continuing a precipitous rise, you will catch more people than the tax was originally intended to catch. So all of a sudden you’ve got Granny Thelma who bought a home back in the 60s who is sitting in a family home which has risen dramatically in value. They are cash poor, asset rich. Why not simply walk around high streets in Britain and demand a punitive tax on anyone wearing Gucci / Prada / Rolex? They must be rich right?
            4) The house that someone lives in, is only seen by some as a financial asset. For most it is a home. A home which they have through their own endeavour, bought with their own money, after tax. Why should we tax something they have bought when they have already paid stamp duty / inheritance tax / VAT / income tax / capital gains tax etc? Someone who owns a home isn’t preventing someone else getting a home. They pay their tax so government can either build more, or pay service charges to builders / developers to build more homes.

            The claim the state has on private property, assets and wealth is already significant. I would rather the state was cut back rather than providing further funding profligate state spending.

          • Des Demona

            Utter rot.
            ”Subsidy” was invented by the Tories to disguise what this actually is – a penalty on those least able to afford it. When someone is allocated a council house they take what is given. They have no choice in the matter. Especially bearing in mind the acute shortage of one bed properties.
            However the fact they have no choice is given no credence. They still have to find the extra money from somewhere – either that or get into the ridiculous situation of having to get a one bed private rental which will be much more expensive but likely to be paid for in full. Oh and who benefits? Why the property owning landlords of course.
            A ridiculously stupid policy.

          • Someone

            Sorry Des, I’m not a tax-and-spender. I believe in low taxes and another tax on property is the last thing which will help anyone get their own house.

            Some of the assertions you make in your reply are simply inaccurate.

            1) Subsidy – it is a subsidy. It is a taxpayer funded benefit. It subsidises someone who would otherwise not be able to afford to live where they do. There is a choice in the matter. They can move to somewhere affordable for their means. That’s what everyone else not receiving housing benefit does.
            2) House price changes is not a red herring at all. Any tax introduced has an expected revenue generation figure. Generally, the government of the day, will spend that (and then some). In fact good ol’ Marxist Miliband has already earmarked the money the ‘Mansion Tax’ will raise to spend on the NHS. What happens if the tax take drops and all of a sudden NHS funding drops? The only alternative would be to move the tax threshold to ensure the same amount of money is generated at a minimum. A tax introduction is rarely temporary. See income tax for details.
            3) Sorry but the tax argument still stands. Why should someone pay MORE tax than they do now? The problem in this country isn’t the tax take, it’s that we’re spending too much. You can’t tax your way to economic health. That is a bogus claim if ever there was one.
            4) Why should Grandma have to sell up? The property is hers by right. She bought it. She paid the mortgage on it. She owns it lock stock. Like all socialists you believe this is a great wheeze to get money out of people you object to. Well you know what? That same person you’re planning to squeeze could one day be you or me and I’ve no interest in paying more tax than I currently do.

            Next stupid response please.

          • Des Demona

            I don’t think you got the fact that they can’t move somewhere more suitable to their means if there is no smaller place available. They are trapped.
            More red herrings I’m afraid. You assume that the tax take will drop, you assume that if it does the only alternative is to lower the limit – it is not.
            Why should someone pay more tax than they do now? Have you not listened to your dear leader? We’re all in this together. The poor are shouldering cuts, the rich should share the burden also. You don’t think Google or Amazon or Vodaphone or Boots should pay more tax than the pittance they get away with? The rich with their expensive accountants? The non-doms oligarchs?
            You don’t think a millionaire should pay more towards local services than the postman?
            You know what, we actually live in a civilised society, in recent years money has continually been sucked upwards towards the rich while living standards and services for the poorer has continually gone down. – should the rich therefore pay more of a share? In my book yes, your mileage unsurprisingly will vary.
            Next stupid response? Charming. |But unsurprising from a greedy, grasping I’m all right Jack, Tory .
            How d’you like them apples?

          • Someone

            Yes they can move elsewhere. They can move out of the area to somewhere more affordable. That’s what everyone else not receiving housing benefit does and tries to live on their own steam. Hell I’d love to have a property in K&C but I can’t afford to live there, therefore I live outside London and commute in.

            No I’m not assuming anything with regards to tax except this: once there is a potential tax revenue stream available to government, very few governments then seek to reduce it for the simple reason that it would curtail their ability to spend money on their own pet projects. Therefore given the state’s general inability to be financially incontinent, I don’t think giving them any more money is the answer.

            ‘We’re all in this together’. Yes we are, which is why VAT went up. It’s a consumption tax – the more you consume, the more you pay. Simples. The Mansion Tax deliberately targets people who you PERCEIVE (note – perceive, not necessarily are, but perceive) to be rich because their bricks and mortar has a value they have no control over. House price inflation will mean more and more houses are caught by this tax. Limited land, limited housing supply, increasing demand = price rises. That means more people not less will pay this tax, many of whom aren’t cash rich. If you want to hit millionaires and billionaires specifically, you need to think carefully about how to do that because as sarah_13 mentions, taxes like this don’t actually impact them. They will find someway of getting out of the tax because usually the drafting of such a law enables these people to dodge the bullet through financial advisors / accountants / financial planners etc. That is just the nature of the beast.

            The poor aren’t the ones on the end of spending cuts. The poor are our kids who will end up paying taxes on debt interest because we are spending too much money as a country, creating continued deficits and pushing up the national debt. It’s really very simple. You don’t like squeezing public spending now? Well if we go bust and the IMF get called in, we won’t have much of a welfare state left to service!

            More money has vacuumed upwards – Actually over the last few years, there’s been a narrowing of social inequality. In fact, irony of ironies, inequality widened under Labour and is shrinking under the Tories.

            I’m alright Jack? How about you envious Marxist toad instead?

          • Des Demona

            I’m actually quite well of thanks, I just happen to have a social conscience.
            You appear to be quite ignorant about housing benefit. Many poorly paid but essential workers rely on housing benefit, only a small proportion actually goes to the unemployed. Therefore moving from London to Stoke on Trent is not an option. Unless, and here’s an idea, companies maybe actually start to pay a decent living wage rather than their profits, bonuses and dividends being subsidised by the taxpayer in the form of state benefits that have to be paid out to keep a roof over their workers heads? How’s that for a good way of cutting benefits? Like it? Didn’t think so even though you no doubt have a thing about spongers and shirkers.?

            The poor aren’t the ones on the end of spending cuts? Pretty much the most stupid and ignorant thing you’ve said yet.

            Yes there has been a narrowing of equality in recent years – but look at the figures, it is because the middle earners have been made poorer while the top 10% are sailing off into the distance.! Another lie nailed.

          • Someone

            Because I like to humour you, I’m going to give you a list of London Labour MPs who have written to Ed Miliband saying they have doubts about the policy:

            Glenda Jackson; Diane Abbott; David Lammy; Margaret Hodge; Tessa Jowell and Nick Raynsford. In fact Jackson said in this morning’s Guardian no less it would, “impact disastrously on people who are asset rich but revenue poor, particularly pensioners, who bought their houses many years ago and through no fault of their own have seen the value rise because of the ludicrous London house prices.”

            You can dismiss Lammy, Hodge and Jowell as New Labour stoogies if you like but Jackson and Abbott are hardly blue Labour!

            This is bad policy plain and simple.

            All for living wage. No problem with that whatsoever, particularly if it means the state not needing to pay quite so much in benefit terms.

            Thanks for playing though.

          • Des Demona

            Humour me? I’d have thought humouring me would have involved actually replying to the points, like VAT hitting the poorest hardest or your contention that the poor aren’t the ones on the end of the cuts?
            Then again, I guess you can’t really.

          • Someone

            20% on a £1 product (assuming people are on a low budget) is 20p. 20% on a £1,000,000 boat meanwhile is £200,000. Either way, everyone has had to pay more. Your relativism aside, this is a fact whether you like it or not. The poorest people are the ones who have yet to be born because you seem to genuinely believe that we can continue to live beyond our means.

            Even at the end of this parliament, the budget deficit will still be around £75bn per year (according to the OBR). The national debt will be around £1.5 trillion. If as a household I spend more money than earn, I need to do one of two things – earn more money (i.e. get a better paying job) or cut what I spend. Otherwise someone comes round and demands money / stuff from me.

            Now Labour has come up with this great idea whereby to plug that gap, they will raise £2.5bn through taxing people’s homes. So to be clear, Labour has managed to find enough money to plug 2.5% of the total amount it needs in order to cut the deficit. Except, it’s not going to use that money to plug the deficit, it’s going to use it by spending it on the NHS. Brilliant idea! So rather than receiving £110 billion per year, the NHS will NOW receive £112.5 billion per year.

            The costs of implementing this new tax will shake out at about £500 million, meaning that the take on this measure for the first year reduces to £2 billion.

            The numbers you’re talking about amount to b*gger all in those contexts, but the that money means a lot to Granny Smith who hopes to hand down some money to her own family.

            This is p*ss poor policy. Anyone who is economically literate and financially savvy can see that. If you can’t I’m sorry but there’s no helping you.

          • Des Demona

            I’m afraid there is no helping you if you can’t see that the increase in VAT is regressive. I’ll try to make it really simple for you.
            If you earn £1500 pounds a month and out of that after paying rent/mortgage utilities, council tax etc you have £500 of disposable income which by necessity has to pay for vatable consumables then 20% of your total disposable income goes in VAT
            If you are earning £15,000 a month and have £10,000 of disposable income of which £500 has by necessity to pay for consumables then only 1% of your disposable income goes in VAT. The rest is down to choice. Something the poorest don’t have.
            Geddit?
            Oh please don’t whine about the deficit and the national debt. When the Tories took over in 2010 it was only 650 billion. The gross incompetence of Osborne being welded to austerity has caused it to more than double.
            And spare me the ”economy is like a household” analogy. It isn’t.

            ”The numbers you’re talking about amount to b*gger all in those contexts, but the that money means a lot to Granny Smith who hopes to hand down some money to her own family.”

            tell that to Granny Smith in her council house who now can’t make ends meet due to a stupid tax that is probably going to cost more to implement and fill the coffers of private landlords than it is ever going to raise.

          • Someone

            So now your problem is that Osborne hasn’t cut the deficit quickly enough which has led to a booming national debt? Because that’s the inference. And by the way, it shouldn’t surprise you to know that the bigger the deficit, the quicker you add to that debt meaning the quicker debt interest payments grow, meaning the bigger the deficit, meaning the bigger the debt. So remind me again, how is £2.5bn going to help matters in the context of the mess we’re in, unless you have aggressive spending cuts? You can’t tax and spend your way out of debt.

            Everyone has a choice where it comes to their disposable income. For example, the necessities in life like fresh fruit and veg, VAT exempt as are children’s clothes. Your problem is that you believe that the state should pay for more and that there should be less individual responsibility. Want more choice in life? Get up and earn it but when I can’t afford to live where I want to because of my own budget, I don’t see why I should subsidise someone else’s decision to live in inner London. It’s all well and good saying you don’t mind but you’re playing with other people’s money. Namely taxpayer’s money and this extra Mansion Tax, is another example that you’re running out of other people’s money and need more.

            Actually the economy is like a household budget. You have overheads, you have income, you have borrowing, you have one off expenditures. The reason you don’t want to compare it to one is because put in terms simply understood by the majority of people, it would look like this:

            Average household income circa £22,000 per annum. We’re spending around about 5% more than we receive per year at the moment. That means we’re spending roughly £23,100.

            Due to the financial incompetence of previous inhabitants, household debt is currently around 75% of annual income so about £16,500 and we’re adding around one thousand pounds per year to that total. You then have the audacity to say ‘But we should keep the Sky subscription, the magazine subscription and while we’re at it, don’t worry we can still pay the kids school fees and healthcare. Of course we can’t touch how much money we spend to get to work…’

            You are fiscally incontinent.

          • Des Demona

            Now you’re just making stuff up.
            I didn’t say Osborne hadn’t cut the deficit quickly enough.
            I didn’t say that the state should pay for more and that there should be less individual responsibility.
            I didn’t say ….. etc etc etc.

            Interesting that the tax cut for the richest cost around £3 billion. Would you prefer to see it reinstated? That would solve your mansion tax qualms?

            Didn’t think so.

          • Someone

            Des you’re approaching this ass over tit. Our problem isn’t the tax take, it’s the amount we’re spending. It always has been, that’s the reason we’ve got a deficit! You need to cut spending. If you want an economy to grow, you need more people to have more money in their pocket to either pay down their own privately held debt (releasing further money in the future) or to spend their own money stimulating the economy through consumption (and ironically, increasing the VAT take).

            You said you were upset that Osborne had increased the national debt by as much as he had. Well without being sanctimonious, aside from cutting how much we spent which adds to the debt and the debt interest payments, how else do you stop adding to the debt?! Through tax rises? Across the board?

            A tax system should maximise the tax take. In order to do that you need to find a point which still incentivises wealth creation and at the same time produce maximum revenue for the state. A Mansion Tax will simply mean the dream of owning a bigger home, is put out of the reach of more people and distorts the market, while forcing people on low incomes (in a lot of cases) to pay money they don’t have and swiping that money from the next generation.

            Spending cuts necessary and until you get that, we’re at an impasse.

          • Des Demona

            The huge rise in the national debt is essentially down to reduced tax take – the reduced tax take could have been mitigated by government spending to stimulate the economy in infrastructure spending, small business assistance and a host of other ways to increase employment etc. Instead of this Osborne talked down the economy claiming we were bankrupt and slashed public expenditure on infrastructure.
            And please don’t come out with ”where would the money come from?”
            How many billions have been wasted on QE? Enough to give every man woman and child in the country around £7,000.

            What was the cost of bailing out the banks? 1.2 trillion? And now they are merrily making billions in profit? How much tax was Vodaphone ”forgiven” Five billion? How much tax is lost to aggressive tax avoidance schemes, hundreds of millions. if not billions

            ” A Mansion Tax will simply mean the dream of owning a bigger home, is put out of the reach of more people”

            Oh purleeeeze. Only 0.2% of homes in the entire Uk are valued at £2 million and over.
            The dream of owning a bigger home? Don’t make me laugh.

          • Someone

            This of course is pure Keynesian economic theory. And actually would’ve been fine had we been running a surplus and built up reserves to go on a massive stimulus programme. But unfortunately, Labour urinated that chance away by failing to run one surplus while the tax take was good. So we already start of from a position of economic weakness so that when the financial crisis hits, we have no money to spend!

            QE and reduced interest rates have managed to prevent a number of people going bankrupt. It’s come at the expense of savers which is unfortunate (and during that time, as a saver trust me, I was hacked off beyond measure), but aside from inflating away debt, I’m not sure what other options were available to a government who were about to inherit a hospital pass of an economy. Reducing interest rates also means that savers / investors who want a return, chase alpha so they start piling in to stocks, shares, bonds which in turn makes it less risky for business to invest with the additional capital they raise.

            You may not appreciate the finer workings of the private economy so I don’t expect a response.

          • Des Demona

            Labour ran several surpluses. You may not appreciate the finer workings of facts so I don’t expect a response.
            ”QE and reduced interest rates have prevented a number of people from going bankrupt. ”

            That’s it? That’s all you’ve got? And you still say we had no money to spend?

          • Someone

            http://www.theguardian.com/news/datablog/2010/oct/18/deficit-debt-government-borrowing-data#zoomed-picture

            Sorry what? Ran several surpluses? Would this be while they promised to stick to Tory spending plans between 1997-2001? Or when they started to go a little crazy in the final 9 years in office?

            Reducing interest rates allows people to pay off debts and get back to consuming which produces which creates jobs.

            Again no need to thank me for this ever so basic lesson in sticking to the facts of the case.

          • Des Demona

            Ummmnmm, your own link shows that Labour ran several surpluses. More than the Tories did in the previous 17 years in fact.
            It also shows that at no stage up to the crash did Labour run a deficit greater than the Tories whopping figures in 1993.
            I think you and the facts are only very distantly related.

          • Someone

            It shows that Labour ran surpluses in their first term because they said they would stick to Tory spending plans so as to reassure people when they were voted in in 1997 and then went on an almighty spending splurge post 2001 (see the chart where in the final nine years they failed to run one surplus and in fact ran several large deficits).

            I’m sorry I’d love to continue this, but I’ve got work to do.

          • Des Demona

            Oh so now they DID run surpluses. Wow, are you a politician by any chance. You certainly know how to spin.

            Perhaps you should have a look at this to disabuse you of your spin on Labour economic policy.

            http://www.huffingtonpost.co.uk/ramesh-patel/growth-cameron-austerity_b_2007552.html

          • Someone

            Way to look right past the facts of the case:

            4 years of surpluses by following Tory spending followed by 8.5 years of bigger deficits. Yep Labour certainly f*cked things up alright.

          • Des Demona

            Really? They borrowed less in their entire time in office, including the crash of 2008 than Osborne has done in 4 years!!
            Did you not read the link I gave?

          • Someone

            It’s like banging one’s head against a brick wall. If you want to cut the deficit (borrowing) then you need to cut spending.

          • Des Demona

            That’s a very simplistic concept. Are you sure you’re the economics expert you seem to claim to be?
            Certainly cuts are one way, but the scope, nature timing and extent are crucial. Economic growth is a less painful way, but unfortunately Osborne’s policies failed dismally on both counts.

          • Someone

            Except Osborne managed to dodge a double dip and Britain’s economy is growing at the fastest rate of any G7 country.

            Of course timing and scope are important factors. So the choice is pretty clear on that score – Labour’s spending cuts – never and limited; Conservative spending cuts – happening and according to you, in the same breath both too much (ow it hurts the poor people) and too little (how dare he allow the national debt to get that high!).

          • Des Demona

            haha Yes the fastest growing economy in the G7 THIS YEAR!
            Still lagging well behind most other G7 growth rates overall. The rest of .your post is pretty meaningless save to expose your callousness towards the poorest in society and to infer things I did not actually say..

          • Someone

            Actually it serves to show the stupidity of your contradictory positions one which at once believes in continuing state spending (specifically Housing Benefit) and at the same time slamming Osborne for failing to bring the national debt down, which as I’ve repeated ad nausea is only possible by cutting spending, which as you’ve already said, you don’t want.

            Anyway, it was lovely talking to you but I must dash.

          • Des Demona

            I have no contradictory position save for the one you have invented.
            Yes lovely talking to you, give my regards to Conservative Central Office.

          • Someone

            And mine to the Socialist Workers Party. 😉

            Toodles

          • fubar_saunders

            what a complete and utter w*nker you are Des. What a c**t.

          • Tom M

            Bravo Someone I enjoyed that!

          • Someone

            Many thanks Tom M.

          • Apaliteno

            As a pile of leftist drivel this really takes the biscuit. Tax take is very consistent as a percentage of GDP. It rarely rises above 36% which puts into perspective the spending which peaked at 48% when the deficit was 158 billion.
            Total outstanding taxpayer support for the Banks was 141 billion as at 31st March 2013 and obviously should be offset against the very substantial value of the stakes in RBS, Lloyds etc. Final cost will probably end up as a couple of weeks government spending.
            Describing QE as wasted is utterly ridiculous although there may be a lack of clarity as to its long term benefits. Little of the 375 billion went to Banks either.

          • Des Demona

            And as GDP plummeted so did empirical tax receipts Duh!

          • Apaliteno

            Tax revenues never did fall that rapidly (15 billion in the worst year) especially when viewed in the context of the massive rise in the deficit

          • Des Demona

            If as you say tax receipts were relatively stable then can you explain how Osborne has more than doubled the national debt to 1.5 trillion? Borrowed more in 4 years than Labour did in 13 and still made the average worker more than £1000 worse off in real terms than they were in 2010?

            I’m sure the country would love to know.

          • Apaliteno

            Not hard to explain at all-he inherited public finances in complete disarray (a deficit of 158 billion). Whoever had been Chancellor for these past 4/5 years, the National debt would have risen massively. Set against the background of the severe crisis in the Eurozone and the need for domestic banks to repair their balance sheets this was always going to be a time of great economic adjustment.
            Not my problem anyway, I jumped ship a decade ago to booming SE Asia

          • Des Demona

            So how does a deficit of £158 billion lead to borrowings of in excess of £700 billion? Bear in mind QE and bank bail outs are not included in that figure.

          • Apaliteno

            Sounds a bit high, assuming you are referring to expected borrowing for the duration of this parliament. I would have thought the five year total would be £600 billion?

          • Des Demona

            One would have thought so however I believe the current national debt is now in the region of 1.5 trillion as opposed to 650 billion in 2010.

          • Apaliteno

            Always brings to mind Mervyn King’s comment that whoever won the 2010 election would be out of power for a generation. On the other hand 1997 was probably the best to have won for at least the last 30 years.
            1.5 trillion, presently is slightly over 100% of GDP, a landmark figure I don’t think we’ve reached just yet.

          • Des Demona

            As at August 2014 it was 1.432 trillion and around 77% of current GDP.A big increase in output may help avoid the 100% milestone, here’s hoping. The latest manufacturing figures don’t hold out much promise.

          • Apaliteno

            Goodness that implies GDP is now 1.8 trillion, rather higher than I thought (must be thanks to prostitution and drugs). Data has been worryingly weak recently but far better than the Eurozone at least.
            Our route out of this mess is really a 15 year project: at 4.5% nominal growth we’d virtually double GDP and hopefully the National debt would peak at around 2.2 trillion, or a much more acceptable 60% of GDP.

          • Des Demona

            haha!!! Indeed. I wonder how many other industrialised nations include a guestimate of illegal drugs and prostitution output in their official GDP figures? 5 Billion I think was the figure used I think but I think that’s probably an under estimate.

          • Apaliteno

            Latest Industrial production figures predictably show a slowing of growth but are an order of magnitude better than those released earlier out of Germany.
            Didn’t they claim vice got included to bring us in line with other country’s methodology?

          • Des Demona

            As at 2012 Estonia, Austria, Slovenia, Finland, Sweden and Norway were the only European countries doing so, though I believe Italy now does also.
            Odd, I wonder how much drugs and prostitution contribute to Finland and Norway’s GDP?
            Estonia and Slovenia I can understand, though I guess much of that is remitted back from London!

          • Apaliteno

            Odd that Italy is only recently believed to have done so as back in the deep, distant past I thought “Il sorpasso” was based on the inclusion of their huge black economy into the official figures?
            Similarly, if corruption monies here in Malaysia were included in official figures GDP per capita would probably surpass the UK!

          • Des Demona

            Ha! Whisper that softly. You may give our lot another idea!

          • fubar_saunders

            “actually well off”. Ah, that explains it. A Hampstead-residing self hating plastic socialist then. No doubt rebelling agains tory mummy and daddy who Des figured didnt love him enough as a kid.

            Nothing more puke inducing than a self loathing attention seeking plastic socialist who thinks that the biggest enemy of the poor is middle class privately educated rich white men… just not him.

            W*nkers, the lot of ’em. Should be gassed at birth.

          • fubar_saunders

            the reason the likes of Vodafone, Amazon, et al dont pay “more tax than the pittance” you state is because your one eyed megalomaniacal tw*t of a former PM spent over a decade fannying around with the edges of the tax system to shaft those in the middle instead of making the kind of reforms necessary that would be able to deal with globalised businesses. Thats why. Not to mentioning amalgamating the Revenue and the Customs & Excise branches, not to mention completely politicising the treasury.

            If Brown was that bothered by the likes of Philip Green, why didnt he do anything about it?

            Thirteen years the left had to reform tax in the UK. Thirteen unopposed years and they did jack sh!t until the last 4 months before the election when they laid the 50p trap in order for their bunch of public school educated millionaires to sneer at another opposing bench full of public school educated millionaires and indulging in a wave of prolier than thou bullsh*t which has gone beyond nauseating.

            Oh, apart from doubling the tax on the very poorest overnight with the abolition of the 10p band, which was an unmitigated disaster.

            You lot are in no position whatsoever to sneer at a tory party who for the last 5 years has been running Continuity Brown economics. “I’m alright Jack Tories”…. as if you lot on the left ever gave a flying one about the poor once you’ve raped the dumb f**kers of their votes by pandering to their prejudices.

            Nauseating hypocrisy.

          • Teacher

            Who are you to tell a ‘granny’ to move if she owns the property and pays tax on it already? It’s a fundamental basis of law that, if you earn the money and pay for it fairly and squarely, it’s yours. There is little difference as far as I can see between the burglar who breaks in and steals the TV and a government which seeks to siphon off the equity in a property owned by an individual who is asset rich and cash poor.

          • Des Demona

            Amazing how many poor granny’s now suddenly seem to live in hugely expensive houses!

          • Teacher

            Actually, I was thinking of myself. I am in my 50’s and I love my home which I bought, spent money extending and maintaining and have paid income tax, council tax and VAT on. It isn’t worth anywhere near £2 million now but if the principle of asset taxes (of which so called the ‘mansion tax’ is a prime example) is allowed, then I might end up owing far more than I can afford out of my rather small pension. I could well be that ‘granny’ who is forced out of her home. For me the issue of a mansion tax is about property law and justice and it is also a personal issue.

            To be honest, I’d rather set fire to my beloved home than see someone else in it.

          • Des Demona

            Then you are getting worked up over nothing. Only 0.2% of houses in the entire UK are valued at over £2 million. The chances of you ever getting there are slim to zero.

          • fubar_saunders

            Complete and utter envy based lefty sh1te from beginning of the first paragraph to the end of the last one.

            “tory votiing property owning Landlords???” Jeezus Christ, pull your head out of your a**e. The biggest buy to let boom in two generations was stoked by Brown and Blair.

            Utter, utter, utter sh1te.

          • Kaine

            Granny Thelma who lives in her mansion in central London could always take a lodger. Would keep her company and the rent would easily cover the levy.

            Alternatively there are dozens of companies already that will allow her to stay in the house until she dies while paying her an income in return for some of the equity on her death.

            This isn’t about Granny Thelma of course, this is about her children content for her to rattle around lone in that big house while they wait, vulture-like, for their unearned windfall of an inheritance.

          • Someone

            Why should that be your decision? Or the government’s decision? Sorry but Granny Thelma owns the house fair and square and has paid to own it.

            The drawing down against the equity in a house leaves the next generation having to pay debt interest on what ever is drawn. That is simply passing needless debt from one generation to another.

            The final paragraph is actually brazen in its contempt for others. It’s got everything to do with taxing a woman who can’t afford the tax purely out of spite because someone, somewhere has put a value on the property and thought ‘Oh let’s see if we can realise that value by taxing her some more’. It’s gross distortion of a sensible tax regime and is destined to catch more and more people with time.

          • Kaine

            Because as you delight in highlighting, we have a deficit to pay off and books to balance. Those who have done spectacularly well out of the boom in property prices have become millionaires not by their own graft, but as a side effect of government policy. Paying a small proportion of that gain seems entirely fair to me. Broadest shoulders and all that.

            And come off it with your idea this accumulates debt. It doesn’t, it just releases some of the asset earlier. The levy won’t even cancel out the increase in most of London, let alone plunge anyone into negative equity.

            And again, assuming she plans to stay in her home the rest of her life, Thelma will never see the £2m. What I find ‘brazen’ are people who hide behind little old ladies to justify why they should get a six-number lottery win rather than a mere 5-numbers-and-the-bonus-ball lottery win.

          • Someone

            What I find brazen is you spending other people’s money when you have no right to it whatsoever.

            It does accumulate debt. If you draw down against equity in a house (and by the way just because a house is valued at £2m doesn’t mean you can draw down against £2m it means you can draw down against what you have in the property itself because that’s all you’ve given the lender in the first place). Any equity you draw out of the property has an interest charge. This can only be paid back at the time of sale, the proceeds of which will still liable to inheritance tax anyway assuming Granny kicks the bucket. So it’s yet another tax on people who have worked hard because someone else hasn’t.

            The people you’re talking about already paid their fair share. And the money you so piously believe will help ‘plug the deficit’ isn’t going to plug the deficit, it’s going to be surprise surprise, spent on the NHS. So rather than spending £110bn per year, you’re spending £112.5bn per year. This amount of money will not revolutionise health care instead it takes money out of the pockets who have earned it and who could spend it paying down their own privately held debt, or spending it to stimulate economic activity.

          • Kaine

            Ah, so this is a philosophical discussion now? Fine.

            We live in a democracy with a Sovereign (Parliament) that has absolute power in a Hobbesian sense. The concept of ‘rights’ is meaningless, what you have are privileges decided upon and adjustable by the demos. If you don’t like it you are free to leave. This isn’t new pal, this is Socrates.

            How exactly did Granny ‘work hard’ to turn her £4,000 flat from 1971 in what was then a middling area of London (most of the mortgage of which was paid off by subsequent inflation) into a £3m property in one of the most valuable postcodes in the world? By your logic lottery winners work hard by buying tickets. In fact, since it’s not Granny but her heirs who will benefit, your argument is that the children of lottery winners have has to ‘work hard’. Interesting definitions.

            Ah, the appeal to fairness. I think it’s unfair that 3.5 million children and rising live in poverty in one of the richest nations on earth, with a million families reliant on food banks. Can we address that first and then come back to the whether scions of elderly millionaires will have enough inheritance to buy a big yacht or a small yacht?

          • Someone

            She worked hard to pay the mortgage on the property.

            What’s this got to do with lottery winners? You seem intent on applying this idea of me thinking of a ‘deserving and undeserving poor’ and ironically apply it to a different strata in society. There’s a word for that – envy.

            I’d dispute your figures of 3.5 million children as well as the definition of ‘poverty’ which accompanies this. You can’t address much if you’re squeezing ever harder the people who already pay most for the services the poorest people in our society already receive.

            I don’t have time for a philosophical conversation. Sorry must be back to work now and pay for all the goodies you wish to lavish upon others.

          • Kaine

            She did not work commensurate with the current value of the property. But as I say I have nothing against her, I just don’t see the problem with paying a small amount of that unearned excess back into the system.

            The idea that those who have benefited most from society should pay the most towards its maintenance is justice, not envy. Taxes are not theft, they are the ground rent for civilisation. Again, if you don’t like it you are free to leave.

            The services in our society are most used by the elderly, that’s simply population mechanics. Since the poor tend to die sooner, before most expensive co-morbidities kick in, they take much less in resources over the course of a life time. That’s putting aside the massive benefits you gain from living in a society where everyone buys into the social contract.

            Awww, such a martyr aren’t you darling? No, those kids who went to school hungry today aren’t really poor, but you with your office job in the Metropolis? You’re the real victim.

          • Someone

            You’re truly insufferable.

            Commensurate to the value of the property? Who cares? She’s bought it, she’s paid for it, she owns it! If some asset of yours appreciated in an ‘unearned’ fashion, I’d not insist recompense for that but you see fit to judge others should pay for their good fortune?

            I already pay ground rent thank you through income tax, NI, capital gains, inheritance tax, stamp duty, VAT and plenty more besides. No more taxes thank you. The Mansion Tax isn’t enacted thank god therefore it’s not ground tax, rather a bill you’d seek to foist on more people.

            Services in our society are consumed by everyone and the elderly by dint of having lived longer, have already paid into the system.

            I wouldn’t say I’m a martyr as I don’t intend to die for the cause. But it’s hard enough earning money to keep me solvent, never mind other people too so I’d really rather not be called names while I’m doing it thanks.

          • Kaine

            And yet you can’t stay away darling. Do you have a thing for the proletarian boys?

            Yes, I have no problem with saying if you get a massive lucky windfall, one that is in fact ongoing, then a portion of that windfall should go to the maintenance of the society which brought that windfall about. And it isn’t me sitting in judgement, I have no power, it will be the representatives of the demos elected by law.

            I’m glad you’ve accepted that taxation is necessary for civilisation and stopped referring to it as theft. Progress comrade, progress…

            Indeed, lots of people consume services, and calculating inputs and outputs is very complicated on an individual level, so can we please stop this idea that you’re personally subsidising the poor?

            If you’re having a hard time, as we all do under capitalism, may I humbly suggest you should consider directing that anger at the people above you manning the levers, rather than the people below you suffering their effects?

          • Someone

            Ahhh good patronising and condescension.

            Run along and play with your other classmates, as you seem to have mistaken me for someone who is interested in discussions with an adolescent (at least I’m assuming you are based on your proletarian boys reference).

          • fubar_saunders

            why the hell should HE leave? You’re the one who thinks its all so bloody unfair.

            Why dont YOU leave?

          • Kaine

            He’s the one who mentioned fairness actually. I stay because I believe in democracy and the social contract and the people of this great country. This makes me a socialist, which upsets some people.

          • fubar_saunders

            F**ks sake, where the hell do they find these jealous bastards who’se failiures in life are always some other f**ckers fault, especially if they’ve got more money than them??

            Unbef*ckingleivable. They cant see any further than the end of their own “I want it, you’ve got it, therefore I’m going to take it off you” noses.

            And these arseholes are deemed intelligent enough to vote. No wonder the nation’s f**ked if this is what passes for political “thinking”.

          • sarah_13

            A subsidy is not a tax. You just want to keep taxing those who already pay the most tax. You should just be honest and say it.

          • Des Demona

            Pay the most tax? Many of the rich take great pride in paying as little tax as possible and preferably none, often less than many poorer people.

          • sarah_13

            Again you keep saying “the rich” as if they were a different species, you betray yourself. No, these are people who already paying the most tax. Only tax exiles and pop stars (who have to pay it now anyway) don’t pay tax. You just want to get at some remote group of “rich people” but unfortunately they are just normal people who already pay too much tax.

          • Teacher

            The so called ‘provisions’ are merely to defer paying th monstrous tax so that, effectively, equity is eatenup/stolen even as the poor homeowner struggles to move out only to find the property now unsaleable or actually worth peanuts.

          • Kaine

            The current levy would not even cancel out the rate of price increase in London, let alone eat up equity.

          • fubar_saunders

            Dont talk such Sh*te. Council housing is subsidised. If you buy your own place out of income you’ve already been taxed on, you can waste it on as big a place as you like. Doesnt matter if its just you rattling around in it. You bought it, either outright or leveraged it through a mortgage.

            Its not a bloody tax Its a withdrawl of benefits based on the amount of rooms you need in a property that is owned by a housing association and subsidised by a local authority. Unless there is a good medical reason otherwise, not everyone who wants to live anywhere can afford to. Its been hitting the rest of us who have to commute for donkeys years. If you’re expecting someone else to pick up the tab, get used to it.

      • fubar_saunders

        Outside of Zone 1 quite a lot I should imagine, if they bought at the right time.

        Do you know? I doubt it very much.

    • Linda Smith

      Why £12,000? I thought the rate was going to be 1%. Or was that the lib dumbs?

      • sarah_13

        Yes I think it is 1%.

        • Linda Smith

          If you think the rate is1%, why did you say the tax would be £12,000 on a house currently valued at £2 million. The annual tax would be a thieving additional £20,000 out of taxed income.

    • mustbenice

      They will sell, buy something in an area they can afford and continue their lives with no other alteration except a larger and more comfortable home and perhaps a commute to work.

      My heart bleeds.

  • Someone

    While I recognise your perspective Hugo, the only thing I take from things like the ‘Mansion Tax’ is that it is the thin end of a wedge. Pretty soon, when they realise that £2m+ homes don’t raise enough revenues and it becomes part of anticipated tax revenues, they will say ‘Well why not tax homes over £1m+’. This more likely, will be followed by the thought, ‘there again as the average property value across the UK is around the £250,000 mark, surely £500,000 should be the starting point for such a tax?’ And so on.

    My grandparents bought a home in the 1950s for literally a couple of thousand pounds – a fortune at the time. Two years ago, they sold their family home for half a million. They weren’t property developers; they weren’t doing a turn on an asset. They simply had an asset in Welwyn Garden City which had spiraled in value through no fault of their own. It concerns me that such a tax could be applied to anyone, who lest we forget, has purchased the property out-right after tax already.

    I do have sympathy for those unable to get on the housing ladder. There are structural problems with the supply-side of the housing equation which badly need addressing. But you can never, nor will you ever, raise the standard of living for some by knocking the living standards of others down. You can not make the poor richer, by making the rich poorer. Twas ever thus.

    • Des Demona

      Unfortunately nowadays it seems to be that you make the rich richer by making the poor poorer.

      • Ambientereal

        That´s not actually true. Rich people are the ones that start new businesses and create jobs. Without them we would still be in the pre-industrial era. The point is not to deprive the rich of their richness but to help them to invest their money in productive business that increase the economical activity thus rising the living standard of the poor.

      • davidofkent

        How?

    • Hole_in_One

      “Spiralled in value through no fault of their own?” My savings attract 1% interest (these savings were also made “after tax already”). I pay tax on this. Government policy (low interest rates) is directly pushing up property prices in the South East, but with no tax on the gain in the asset’s values. And this property asset is not growing by 1% (like my savings, pre-tax). It’s growing by a tax-free 10% compounded. This is a national scandal.

      • Someone

        Hole in one – I agree with you that it is a scandal that savings are taxed. I don’t think they should be at all. My point is that by introducing yet more taxes, whether it’s on assets or on any other forms of wealth, you are deliberately fuelling the problem which is government spending. Spending should be cut as should taxes. I don’t see how drawing tax from an unrealised value of an asset is beneficial for anyone as it simply serves as the thin end of a wedge to extend the scope of the tax in the future.

        • Linda Smith

          How about a window tax?

      • davidofkent

        Policy from more than one government. It was Tony Blair who opened the door wide for an influx of people wanting our jobs in the South-East. Demand has pushed up house prices. The five years of BoE base rate at 0.5% has pushed up house prices. Savers have been beggared by this policy. The capital gain is not the fault of the owner and is likely to never be realised.

  • Brentfordian

    Not sure it’ll just be a ‘mansion tax’ for long. Why exempt the man who spends his two million on a yacht, or a Ferrari? It’s a wealth tax pure and simple and it’ll end up taking savings (whether tax has already been paid on them or not). That’s the way of taxes.

    • Yes it’s a wealth tax, a tax on assets bought with money already taxed. But the logic of it is that people can afford it (which is true), but it is quite some way down the line that says tax is theft. Nobody who is a long way from paying this tax will particularly care, as Hugo says, but the medium term it’s one more reason for successful people not to stay in London and the UK. Eventually the golden goose waddles off.

      • Des Demona

        Good riddance, then house prices may fall and actual Londoners’ will be able to buy them, at less than 2 million.
        It won’t happen though, there are very few places in the world where an oligarch and his money feel quite as secure as London.

        • Kaine

          Can I just give you a round of applause for everything you’ve said on this thread?

          • Des Demona

            Well, thank you. You’re joining the fray in fine fettle too 🙂

        • fubar_saunders

          Hehehe. You’ve got a good handle on this irony stuff.

          How many “actual” Londoners are left in London, having not decamped to Essex when Banglatown began its eastward march?

      • Linda Smith

        I just love the way people fling out the opinion that the sitting ducks can afford it _ £20,000 a year extra tax out of taxed income on a £2 million house . People who bought houses years ago that will be caught in this trap are not, and never were rich.

        • wotevah

          And, as Hugo points out, people who have no hope of buying a house NOW really will not lose one iota of sleep about the plight of “sitting ducks” who “bought houses years ago”.

          Home ownership as a percentage of the population has been going backwards for the last 15 years, and the have-nots are not particularly sympathetic to those who appear to have lots, whether or not the latter see themselves as “rich” or not.

          • Linda Smith

            Home ownership has been going backwards for the las15 years since labour flung are roots open and sent out search parties looking for emigrants to dilute the Tory vote. The first solution is to leave the EU. The second is reduce the number of single parent households by telling people to get married before having children.

    • Mike Barnes

      Not really, the aim of a mansion tax is to free up housing. It’s not about punishing wealth. They don’t want elderly widows living alone in 4 bedroom London homes.

      I have no idea how heartbreaking it would be to leave a house you may have had for 40 or 50 years, but they are using the exact same logic as the bedroom tax, forcing people to move out of houses they don’t need. If you’ve got a big house you don’t need, sell up and buy somewhere smaller.

      There’s about 14 million empty bedrooms in England. We don’t so much have a housing shortage but a completely bonkers allocation of housing with older people living in big homes and younger families with nowhere they can afford to live.

      The older homeowners also protest against any new housing because it’ll lower their houseprices don’t you know. Something has to give sooner or later.

      If you sell your £2million home, buy a £1million granny flat and use the extra money to buy a Ferrari the government will be delighted!

      • Brentfordian

        But your enforced sale won’t do that. Your widow sells … to whom? A rich chappie who can afford the £2m and the eternal tax on it. The bedrooms remain uninhabited by your younger family. Meanwhile your widow has moved on removing one of the cheaper houses, and so on down the line – the rich cascading down the generations as it were. No advance in solving your housing problem.

        Doesn’t work, except as a wealth tax pure and simple. Which will inevitably extend itself as if by magic into all that other wealth (already taxed) so deliciously waiting for the state.

      • Roger Hudson

        Freeing up a 4 bedroom £2M house isn’t going to help the accommodation crisis very much, who are the likely buyers?

      • davidofkent

        Re paragraphs one and two: it is nothing to do with anybody else how many bedrooms an OWNER has. Secondly, the ‘spare room subsidy withdrawal’ is just that. When you are living in taxpayer-subsidised houses, you cannot expect ‘other people’s money’ to keep you in a house that is beyond your needs.

      • mandelson

        So, if I have a 10 bedroom pile with a golf course in my backyard and live alone – in Rotherham – and which is valued at £500k – I wont be taxed. I have a three bed flat, in Eaton Square, I am taxed. Is that the plan? How does that release property?

      • fubar_saunders

        the way you avoid getting turfed out by the “bedroom tax” is have only what you need and buy it yourself. If you’re going to get it subsidised, theres going to be a catch. And it was like that before the spare room subsidy came in.

        My late brother in law was the last one left in a four bed flat in Stepney and there were many occasions that Tower Hamlets tried to chisel him out. And that was under New Labour back in 2007.

    • Hole_in_One

      “it’ll end up taking savings” – really. We are already “taking” savings. With an interest rate of circa 1%, savers are already being asked to pump a proportion of their savings into the London/South East housing market by dint of supporting cheap mortgages there. My savings have been QE’d over the last few years by around 15%. And I have to pay tax on the 1% I get. On the other hand, these poor souls whose South-East houses get the benefit of 10-15% asset growth per annum pay no tax on this wealth growth at all. So perhaps a “mansion tax” might be a fair way of sharing the pain caused by the ludicrous interest rate policy we have at the moment in this country. On the other hand, if politicians wouldn’t mind just articulating how much more of my savings they would like to erode….10%, 20%…..

      • Brentfordian

        Not quite sure why the poor evicted mansion tax widow is expected to ‘share the pain’ of your (and my) depleted savings.

        Not sure either why you suggest that the state will be satisfied with just eroding your savings, I reckon the precedent set by this proposed wealth tax means they’ll inevtably come for the capital too.

        • Hole_in_One

          I regard my savings as capital, so not sure what that point is. I guess the interest on this is revenue, but it’s the capital that’s being deliberately eroded by govt. policy.
          My point is that if we accept that savings as a form of capital is a target for value-erosion (which I don’t, incidentally), then why are we exempting other forms of capital, whose tax-free super-value-inflation is being deliberately fanned by government policy?

          • Brentfordian

            OK, I accept the parallel, but your initial comment singled out the ‘mansion tax’. Your parallel would suggest an ‘inflation tax’ on all housing, not just on those whose geographical location has exagerrated any inflation.

    • davidofkent

      The answer is simple. Houses do not move. That’s why governments always love to tax houses.

  • alanmdouglas

    Might have known Balls would sleep in a string vest – as full of holes as his “economic” policies – or is that too obvious ?

  • benjiii

    Or, how about we scrap all current property/wealth taxes and replace with one that is lower than currently paid by the poorest.

    Council Tax band A=1% property value(on average).

    Scrap CT, SDLT, IHT, CGT, ATED =0.9% of total UK residential property value.

    Don’t Tories love flat, simple taxes?

    Any charge against property at 3.5% or below, at today’s selling prices, only recoups back to the State(all of us) the value it/we create, (because it’s incidence falls on land not capital).

    So it sounds fair and efficient too.

  • agneau

    Council tax should be replaced by a property tax whereby you pay a very small (less than 1%) of the value of your home per annum. Thereby if you live in a 50 million house you pat 25 times what a 2 million house owner pays. A 2 million house owner pays slightly more than a 1.9m house owner. Much fairer and can take into account land values too. Works in theUS where property taxes are massively higher on average than they are here.

    • HFC

      Property valuation carried out by whom?

      • agneau

        That is a second level problem – the primary problem is making it fairer and including land.

  • mandelson

    Surely rich people should be paying more for a loaf of bread when they shop at Tescos – after all it cant be fair that White Dee pays the same for a bloomer as Sir Philip Greene? No justice no peace!

    • Aberrant_Apostrophe

      Sir Philip probably gets a discount.

  • Marketthinker

    Ed Balls’ Mansion Tax will apparently raise 2bn by hitting 100k homes for around 20k each. That is 100,000 people that will have to earn another 40k, because after all the government needs to take 50% of everything before they can take the next bite. This 2bn will apparently be vital to help save the holiest of cows, the NHS, which currently consumes 117bn a year, so a boost of just under 2% will make all the difference. Put another way, the government spends over 700bn a year so this increase in revenue would be around 0.3% of government spending. Can we stop pretending that this is about funding vital services and admit it is about punishing people we don’t like?
    As to the practicalities, a house worth 2m that attracts a tax of 20k a year would instantly be worth less than 2m. You can discount it by whatever rate you chose, but at current mortgage rates that would be several hundred thousand….Let’s be generous and say 2m goes to 1.8m. Well the 1.8m becomes 1.6 and so on down the line. Not far down and we get some serious negative equity to think about. People can’t move and everybody on even a quarter of a mansion (to use Hugo’s phrase) find themselves having ‘lost’ money. And who decides what it is worth anyway? A surveyor says it is worth 2.1, you say it is 1.9. Who is right?
    This is not about who has a social conscience and dragging the false flag of a bedroom tax equivalent is (self) deception. This is a vote for me and I will tax their tribe to pay for my tribe. It is an abuse of the democratic process. The hated 1% pay 30% of all income taxes (plus their employers pay even more in NI) and this would be just another step in driving them away.

    • Ben Jamin’

      Anyone who pays less in tax than the rental value of land their property occupies are a net liability on the rest of society.

      The top 1% of households own around 50% of land by value. So they should be paying 50% of all non-business taxation. They actually pay 18%.

      They are therefore parasitising £100bn per year from the rest of us.

      So, if those out of the top 1% who don’t pay more in tax than the rental value of their land f**ked off, we’d all be better off.

      It’s as simple as that.

  • Teacher

    Your friends are being childish in their foolish envy. It was never the case that everyone could have a big house in a good postcode. Market forces have always ruled. When I started out 30 years ago I couldn’t afford to live where I wanted to live so bought somewhere in a cheaper area and worked my way up the property ladder expending huge amounts of money and energy to improve and move on. It is still perfectly possible for your friends to do so.

    Incidently, how much do they spend on ‘essential’ lifestyle? Holidays, mini-breaks lattes, meals out, media, technology, fashion, events, festivals and so on? Sometimes you have to make sacrifices to afford what you want.

    • Serenity Now

      30 years ago properties cost far less to buy as a multiple of earnings. More like 3 times than 10 times. What was possible for you is no longer a possibility for today’s generation.
      The idea that foregoing some lattes etc. will make a difference is a joke. Average property prices in London have increased by 20% in the last year (i.e. by £100k). At £2 a latte, they would have to have foregone 50,000 lattes to keep pace with the rise in the last year alone.

      • Aberrant_Apostrophe

        That’s a lotta lattes…

  • Sam_Beresford

    The Pyjamas bit of your article was genuinely hilarious – I can really envisage all of those people in their pyjamas (not something I ever thought I’d write on a public forum, but there you are). Eric Pickles gives me nightmares now. Thanks!

  • David S

    Funny set of friends you have Hugo. Whining, envious and privileged all at once. Central London prices are ridiculous – that’s why so many people commute, but you lot think it’s your right to live somewhere cool. Imagine how dull it would be to live in a house on a 1970’s estate somewhere out in Hertfordshire or, dare I say, Essex, which you could do for a third of the value of your house in London. You might have to have ordinary people rather than media and political types as neighbours.

  • Jim

    I’m as concerned about the ‘plight of the Tarquins’ as someone once put it, as much as I am in favour of paying for spare rooms for council tenants. That is to say, not very much.
    So for everyone arguing over such matters, you’re both wrong.

  • Mc

    “And yet some little piece of me, some tribal chip within my soul, rejoices at the thought of one”.

    It’s probably due to a chip on your shoulder, rather than a chip in your soul.

  • Malus Pudor

    A Semite to his core… there is always a grievance seeking to escape …..

  • Linda Smith

    All these commenters saying people hit by this (iniquitous) “mansion tax” should downsize, take in a lodger, etc are snidely poking back what was said about what they (erroneously) call a “bedroom tax”. Wonder they don’t get out the guillotines.

    • mustbenice

      So fantastic that for once the poor aren’t being attacked. Maybe the snide, (desperately scrambling to be upper) middle classes will finally get it when the government are, for once, not stamping on those who are the most vulnerable. Anything you have in life is luck, nothing more. If you think you earned it, you’re an idiot. For every one wealthy person who has worked hard there are ten thousand who have worked much, much harder and who are still poor.

      Next time the government attacks the poor with a bedroom tax or something similar, next time they scream abuse at the poor and call them leeches, next time they decide to ignore unemployment, food banks and dismantle the NHS, stand up and be counted. Because the next lot they’ll come for will be the middle classes. And that’s perfectly fair.

      Here’s a great study that proves wealth turns you into a dick with a false sense of entitlement. http://dailyoftheday.com/new-study-at-cal-berkeley-shows-that-rich-people-are-jerks/

      Some of us were poor for long enough to remember that our wealth now is just plain luck. And to find it hilarious when people who don’t get that start squealing when, for once, they are the ones being targeted.

      • Linda Smith

        Instead of attacking homeowners, labour supporters should be attacking the labour party for allowing high earners like the late union boss Bob Crowe to live in taxpayer subsidised council houses. Also google Andrew Neather who revealed labour’s cynical political ploy to flood the country with immigrants to dilute the conservative majority in England. That’s what’s driven down pay and put up house prices. Of course Labour are still refusing a referendum on the EU. People voting labour are turkeys voting for Christmas.

  • flippit

    It will only affect people in London and SE. In the rest of the country 2m quid will only buy a real mansion, 6 beds and bathrooms and set in a park, and there aren’t That many of those. I just hate the way though it’s meant to stir resentment and yet satisfaction too, an easy bash-the-rich gimmick. As if it’s going to make any difference to the NHS, for crying out loud.

  • Mode4

    When things aren’t going well bring in an Envy tax to inflame a class war. Just because you have an expensive house doesn’t mean you have cash. You may have lived in that house all your life and the government force you to sell to feed the class war. If this is the best labour and libs can come up with…

    • Ben Jamin’

      Nothing to do with envy. Only fairness and efficiency.

      Any charge against property at 3.5% or below, at today’s selling prices, only recoups back to the State(all of us) the value it/we create, (because it’s incidence falls on land not capital)

      So, it doesn’t penalise work and enterprise, and directly relates to the benefit the payer receives

      The truth is, charges whose incidence falls on land values are hard core Capitalism. Those who don’t like them and prefer taxes on private income and wealth are anti-capital and pro-protected State privileges and subsidies.

      Tories are hard core Socialists as proven by their opposition to the Mansion Tax.

  • Thomtids

    The nub of the matter is that the Euros want a “Wealth Tax” on Capital but the Brits are not much amused by a tax on taxed savings and especially where those savings have been effectively expropriated by the State and for which no meaningful income has been paid for many years.
    However, with inflation-driven revaluation of real property and the periodic bubbles enriching those who can use houses as investments, riding the waves of inflation like surfers, the Mansion Tax serves the main purpose of inserting a wealth Tax by subterfuge – a tax on the “wealthy house owner” – as well as sating the appetite of the rampant socialist “levellers”.
    Sod the difficulty of recovery, the stupidity and unexpected consequences like the bricked-up windows of yesteryears, the Mansion Tax is our very own “Trojan Horse” tax.

  • BoiledCabbage

    Might very well have nasty, stupid friends……

  • tonycl

    l see the deputy pm told the bbc that the revenue from a mansion tax £1.5 bn would go to reducing the national debt.
    Hmm this is £1330 bn and growing by £170 bn per year so good luck with that.
    I do think though that equipping the nation with warm pyjamas might well be an election winner. It would be the best (sorry, the only) energy policy this lot have had.
    Cheers.

  • Wow
    Missed the point entirely
    And you get paid for this.

  • Charlie Chan

    I can’t figure out why none of the hate merchants that propose this tax haven’t been properly challenged on it. I mean, just take the name alone – mansion tax. There are proper mansions with hundreds of acres of ground all over Scotland that won’t be touched by this, and the same applies to northern England and Wales. Yet modest houses and apartments all over London and the south will be. So it’s not a mansion tax. Yet these clowns insist on calling it such for the sole reason of drumming up images in the electorate’s minds of toffs lording it behind the gates of their splendid estates. It’s for no other reason than to drum up class hatred and it stinks. You’d need to be pretty spiteful to sit behind your desk, scheming on how to squeeze more money out of a certain group of people in our society, and then, bingo – I’ve got it. lets invent a completely new tax out of thin air and try and give it some legitimacy by calling it a mansion tax. I’d rather they sent their boys with guns round to my door to demand their yearly protection money. If I’m going to be robbed, then I don’t want to be patronised at the same time. Those of the Left should be banned from ever using the word ‘fair’ again

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