Saturday, 22 November 2014

A Mansion Tax Has Got To Be One Of Ed's Most Idiotic Proposals Yet!!!

Myleene Klass is largely right when she barks at Ed Miliband, telling him that the mansion tax will be a tax on far too many people (predominantly in London) that have lived in those houses for years and years, and are not all that rich in terms of disposable income.

Labour's proposal for a mansion tax is an incredibly stupid idea for a tax, particularly given that home owners already incur tax through council tax, stamp duty when a house is purchased, and inheritance tax when the owner dies and tries to pass it on.

The other negative consequence that Klass didn't mention, though, is that due to inflation and planning restrictions, politicians continue to cause the huge rise in property prices, as they ensure that supply cannot meet demand. The perpetuation of this will only continue to give them even more tax, thus reducing even further the chances of trying to sort the housing problem.

It really does beggar belief that such an obviously stupid proposal is being considered by any politician. It is so blindingly obvious that a blanket tax on properties of £2 million is not going to hit people fairly. Yes the Russian oligarch with his big £5 million mansion in London may be one of the success stories of this tax, but for every one person like him, there will be countless London-based elderly couples (doubtless many widows and widowers too) who have paid off their mortgage, lived in that house for decades and seen the value of their home rise over that time.

Tax proposals that have this adverse effect on unsuspecting people are ridiculously ill-conceived, short-sighted ideas, in particular due to the fact that unlike, say, income tax and consumptions taxes, there is no transaction exchange or cash stream with home ownership. This means that all Ed Miliband will do is hit people indiscriminately and at the same time eliminate some of the value of their homes. Given this fact, a system that differentiates between Russian oligarch in Mayfair and widow in Battersea or Pimlico will be so complex, bureaucratic and costly that the net returns will be negligible (and that's if they're even planning on having any kind of rigorous system in place).

Alas, every day becomes more and more obvious that, if there's one thing this country needs in next year's general election, it is that everything must be done to ensure this current bunch of Labour no-hopers gets nowhere near to forming a Government. This realisation - a realisation that I think is starting to be realised more and more - may well be prove to be enough to ensure that Labour gets fewer votes than the current forecasters predict. Gosh I really hope so.

* Photo courtesy of The Guardian