From The Evening Standard:
The majority of council services are funded by government grant, not council tax. As such, the private property [i.e. incomes] of our poorest citizens is taxed to fund free services for some of the world’s wealthiest landowners.
Far from heading to Scotland, revenue from a mansion tax would only partially offset the public spending that pours into London infrastructure and services, feeding into high rents and house prices. In an ideal world, we’d abolish central government grant funding for all but the poorest areas, but a mansion tax is a step in the right directon.
Joe Momberg, Young People’s Party
Showing posts with label Mansion Tax. Show all posts
Showing posts with label Mansion Tax. Show all posts
Wednesday, 7 January 2015
Monday, 13 October 2014
Reader's Letter Of The Day
From todays Evening Standard (page 55):
Stamp Duty needs to be rethought entirely. It damages labour mobility and discourages pensioners from downsizing, reducing the supply of family housing among other ills.
A much fairer and efficient way to collect from the currently untaxed and unearned housing riches is via unavoidable annual taxes such as council tax. Unlike equivalent taxes in many of our peer cities around the world, [the value taken into account in calculating the tax] is currently capped at the equivalent of about £1 million in today's values.
At a time when people earning £10,001 incur a marginal tax rate of 32% in income tax and national insurance, I find it morally questionable to leave annual property taxes untouched.
Is this politically difficult? Most Londoners rent and have no realistic chance of living in a multi-million-pound-house. The middle classes have nothing to fear from higher property taxes and everything to fear from further increases [in taxes] on their earning power.
The asset-rich, cash-poor who do not wish to downsize can be accommodated by a roll up, which even over 30 years will only equate to the last five years' unearned capital gains.
All the better if extra council tax is kept in London: a big boost to local democracy.
Joe Momberg, Young People's Party.
See also the excellent, fact-filled article by Ben Chu (page 44) which says much the same thing.
Stamp Duty needs to be rethought entirely. It damages labour mobility and discourages pensioners from downsizing, reducing the supply of family housing among other ills.
A much fairer and efficient way to collect from the currently untaxed and unearned housing riches is via unavoidable annual taxes such as council tax. Unlike equivalent taxes in many of our peer cities around the world, [the value taken into account in calculating the tax] is currently capped at the equivalent of about £1 million in today's values.
At a time when people earning £10,001 incur a marginal tax rate of 32% in income tax and national insurance, I find it morally questionable to leave annual property taxes untouched.
Is this politically difficult? Most Londoners rent and have no realistic chance of living in a multi-million-pound-house. The middle classes have nothing to fear from higher property taxes and everything to fear from further increases [in taxes] on their earning power.
The asset-rich, cash-poor who do not wish to downsize can be accommodated by a roll up, which even over 30 years will only equate to the last five years' unearned capital gains.
All the better if extra council tax is kept in London: a big boost to local democracy.
Joe Momberg, Young People's Party.
See also the excellent, fact-filled article by Ben Chu (page 44) which says much the same thing.
This is what we are up against...
Spotted by Ben W at thebureauinvestigates:
On February 5 Tory and Labour MPs complained in the Commons that London’s housing market was “being turned into a Klondike for wealthy foreigners” with “less than 10% of available properties for sale … affordable to a [family] on average wages” and tenants forced to pay “extortionate rents”.
A few hours later the then housing minister sat down to dine with one of central London’s largest residential landlords and two other men whose companies operate in the top end of the London property market.
According to a seating plan for the Tory annual winter fundraiser, which has been analysed by the Bureau, they were amongst 50 attendees with links to the property industry, representing almost 10% of the total guests listed on the seating plan.
Two wealthy property tycoons and one of London’s biggest hereditary landowners are listed on the same table as David and Samantha Cameron…
In the past two years property companies donating for the first time have contributed more than £800,000 to Tory coffers. In addition some long-term supporters from the property sector have increased their donations.
On February 5 Tory and Labour MPs complained in the Commons that London’s housing market was “being turned into a Klondike for wealthy foreigners” with “less than 10% of available properties for sale … affordable to a [family] on average wages” and tenants forced to pay “extortionate rents”.
A few hours later the then housing minister sat down to dine with one of central London’s largest residential landlords and two other men whose companies operate in the top end of the London property market.
According to a seating plan for the Tory annual winter fundraiser, which has been analysed by the Bureau, they were amongst 50 attendees with links to the property industry, representing almost 10% of the total guests listed on the seating plan.
Two wealthy property tycoons and one of London’s biggest hereditary landowners are listed on the same table as David and Samantha Cameron…
In the past two years property companies donating for the first time have contributed more than £800,000 to Tory coffers. In addition some long-term supporters from the property sector have increased their donations.
Tuesday, 17 September 2013
Reader's Letter Of The Day
From today's Evening Standard:
SOMETHING missing from the Lib Dems' case for higher property taxes is a comparison between London and other global cities.
New York City does not have a cap as there is with Band H and as a result some property owners willingly pay bills of hundreds of thousands of dollars a year. Forty three per cent ofhte city's revenue comes from property taxes.
Similar arrangements exist in Hong Kong and Singapore.
High taxes on labour and business are far more damaging to Londoners than those on property. The challenge is to sell any new tax as a replacement rather than a new one. Stamp Duty is an ideal candidate to scrap.
Joe Momberg, N3.
SOMETHING missing from the Lib Dems' case for higher property taxes is a comparison between London and other global cities.
New York City does not have a cap as there is with Band H and as a result some property owners willingly pay bills of hundreds of thousands of dollars a year. Forty three per cent ofhte city's revenue comes from property taxes.
Similar arrangements exist in Hong Kong and Singapore.
High taxes on labour and business are far more damaging to Londoners than those on property. The challenge is to sell any new tax as a replacement rather than a new one. Stamp Duty is an ideal candidate to scrap.
Joe Momberg, N3.
Friday, 19 October 2012
"Straw little old ladies"
Andrew Neather in the Evening Standard pulls no punches:
One alternative is to [tax] wealth rather than income — especially wealth that’s hard to hide*. Yet the Tories are outraged at Liberal Democrat proposals to do just that, via a “mansion tax” on properties worth more than £2 million. The value over £2 million would be taxed at one per cent: the owner of a £4 million house would pay £20,000 a year**.
Nationally, maybe 0.25 per cent of homes are in the £2 million-plus bracket; in London, estimates put them at between 1.2 and two per cent of the total. Just 1,518 such homes were sold nationwide last year. Vince Cable’s charge this week that the Tories oppose the tax because it would hit “their friends” looks like a pretty simple statement of fact to me.
Not that the mansion tax will ever happen: this is really about Lib-Dem positioning. And in any case it would be simpler to create new council tax bands. The highest band at present, Band H, is for houses worth more than £320,000 in 1991 — hard to put an average value on today, but less than £2 million. So at present, the millionaires at One Hyde Park pay council tax of £1,365 a year on flats worth up to £136 million.
By way of comparison, a report in yesterday’s New York Times highlights an $88 million apartment at 15 Central Park West that attracted property taxes of $59,000; without a complicated tax break, the tax would have been $145,000.
Critics point to the alleged plight of little old ladies in big houses — straw little old ladies, I fear — and to the potential flight of the super-rich. But are the latter really all going to condemn themselves to lives in Zug or Dubai? I think we should call their bluff.
* Of course what he means is "the rental value of land" rather than "wealth", but this confusion has been deliberately instilled into us over centuries by the land owning elite.
** £20,000 a year is approx. the average total tax bill for an average full time earner; income tax is only a quarter of all the taxes we pay. So it's hardly a huge figure.
One alternative is to [tax] wealth rather than income — especially wealth that’s hard to hide*. Yet the Tories are outraged at Liberal Democrat proposals to do just that, via a “mansion tax” on properties worth more than £2 million. The value over £2 million would be taxed at one per cent: the owner of a £4 million house would pay £20,000 a year**.
Nationally, maybe 0.25 per cent of homes are in the £2 million-plus bracket; in London, estimates put them at between 1.2 and two per cent of the total. Just 1,518 such homes were sold nationwide last year. Vince Cable’s charge this week that the Tories oppose the tax because it would hit “their friends” looks like a pretty simple statement of fact to me.
Not that the mansion tax will ever happen: this is really about Lib-Dem positioning. And in any case it would be simpler to create new council tax bands. The highest band at present, Band H, is for houses worth more than £320,000 in 1991 — hard to put an average value on today, but less than £2 million. So at present, the millionaires at One Hyde Park pay council tax of £1,365 a year on flats worth up to £136 million.
By way of comparison, a report in yesterday’s New York Times highlights an $88 million apartment at 15 Central Park West that attracted property taxes of $59,000; without a complicated tax break, the tax would have been $145,000.
Critics point to the alleged plight of little old ladies in big houses — straw little old ladies, I fear — and to the potential flight of the super-rich. But are the latter really all going to condemn themselves to lives in Zug or Dubai? I think we should call their bluff.
* Of course what he means is "the rental value of land" rather than "wealth", but this confusion has been deliberately instilled into us over centuries by the land owning elite.
** £20,000 a year is approx. the average total tax bill for an average full time earner; income tax is only a quarter of all the taxes we pay. So it's hardly a huge figure.
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