From City AM:
Wealth taxes – on property(1), cash, equities and other assets, including unrealised gains – always mean that some people will end up paying more in tax than the amount they earn (2) – while this might sound crazy, it is a feature, not a bug, of the system. The whole point is to make people poorer(3) and to reduce their overall wealth.(4) By contrast, income taxes and other levies on new income – as well as on realised capital gains – only reduce the increase in wealth, rather than seizing previously earned and taxed income (5). There is a big difference between those two approaches.(6)
Yes, this man wants you to vote for a system which makes you poorer, because it enables his sponsors in The City to become ever richer.
A few simple facts which he would never admit:
1) No sane person is proposing a general tax on wealth; they never raise much and collapse under the administrative burden of precisely defining and measuring "wealth". Which is why we have income tax on dividends and interest income, that does much the same job (i.e. if shares yield a dividend of 4% and higher rate income is 25% of the dividend received, that's like a 1% annual wealth tax).
Like all good Homeys, he insists on using "property" as synonymous with "land" and on bracketing in land wealth with private wealth when it is fundamentally different. Land "wealth" is merely a measure of the total annual rental value of land, which as we well know is created by the actions of the whole nation (or even whole continents if the nations in it are not at war). Land rents are national wealth. So a tax on the annual rental value of land does not affect private wealth and can't possibly reduce national wealth, it is just a fair user charge.
And people who want to live off national wealth for nothing in return are referred to by his ilk as "scroungers". Why do households who get a couple of hundred quid a week in welfare count as scroungers but people who get hundreds of thousands of pounds a year in land rent count as "aristocracy"?
2) That only happens if people insist on over-occupying. If people want to pay less, they can trade down. It makes more sense for workers and businessmen to live near where they work, land rents are higher where there is more economic activity and they are the ones who can afford to pay the tax, why not let them live there?
3) The whole point of income tax (and private collection of national wealth) is to make workers and businessmen poorer and landowners, bankers, politicians and quangocrats richer. So he has completely missed the point as per usual and turned all logic upside down.
4) Income tax is far worse than that. Taxes on earnings, output and profits have huge deadweight costs. For every £1 collected, the economy shrinks by 50p (and then we need to collect yet more income tax to pay for the unemployed). A tax on land has no dead weight costs and actually stimulates economic activity, so for every £1 collected, the economy grows by a few pence. And of course having a user charge for consumption of national wealth does not reduce the amount of national wealth. Imagine: businesses were no longer allowed to charge their customers. Would total wealth increase or decrease?
And while a tax of £1 per year on each worker makes all workers £1.50 worse off in eternity, a £1 annual tax on a plot of land does make all owners of that land in future worse off. The price will be reduced to compensate future owners. We get over it and move on.
5) Typical Homey crap: "I bought my land out of taxed income". No you didn't. You paid off a mortgage out of the money you saved in rent, and the bulk of the value (all the increases in rental value or selling price since then) is an entirely unearned free gift bestowed on you by the equally Home-Owner-Ist government (and if you are old enough, they will have done you the favour of wiping out half your mortgage with inflation).
6) Yes, there is a big difference. Taxes on earned income stifle the economy and help to transfer wealth upwards so that it becomes ever more concentrated and work becomes less and less worthwhile compared to land speculation. Taxes on land rents stimulate the economy (however slightly) and constantly level the playing field between regions, between generations and between the vested interests and the vast majority.