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Topic: why the Mansion tax is utterly wrong
Posted by: Lorne Gifford
Date/Time: 03/09/14 10:37:00

Were told that property worth more than 2 million should be subject to an additional wealth charge to claw back some of the tax the rich are avoiding. Its pointed out that half those property owners are the bankers and non-domiciles who created our financial problems in the first place and are compounding it now by actively avoiding their fair share of tax.

Sounds fair enough, but what about the other half. Presumably these are people who worked hard and saved, didn't buy new cars or expensive holidays and invested prudently so they could afford their dream homes. Just the sort of people the Conservatives say we all should emulate.

Why then is such a blunt weapon being proposed that will penalize the prudent as well as the reckless? There are far easier ways of taxing just the rich or just the bankers and non-doms.

No, mansion tax is not a tax for the rich. History shows us instead that its the opening play in a new area of taxation we will all end up paying.

I read an interesting article a week ago about how property prices increased 11% last year and will multiply many fold in the next decade. The supporters of mansion tax counter by saying the price at which it kicks in will increase with inflation. But they said the same for stamp duty, higher income tax and inheritance tax, and of course no such thing happened. On the basis of every single new tax ever introduced in the UK, history tells us mansion tax will lag inflation until it has moved from the minority to encompasses the majority. Call it a mansion tax to get it introduced, then creep it until we all pay.

Its actually quite interesting to think about why property will increase so much in the near future. Surely, youd reason, there isn't enough cash around for normal houses to become so expensive?

Well the extra cash has already been introduced by the Bank of England. Since Sterling dropped off the gold standard then every year they've printed a few billion extra pounds to help the government pay the salaries and pensions of the half million civil servants we have. Its called a FIAT monetary system and is, of course, simply creating cash out of thin air. This newly printed money quickly makes its way through the civil servants pockets and into the general economy where it causes the inflation we all live with. More pounds in circulation without any more apples simply means each apple costs more.

Quantitative Easing, where several hundred billion pounds were generated to bail out the banks in turn is leading to much quicker and higher inflation.

The banks neatly multiply this QE money with their Fractional Reserve system, and are focusing it into property through a tendency to only lend on solid investments. This is why were seeing massive house price inflation. Its annoying that official inflation figures dont include house prices, because if they did wed all feel a lot more worried about the escalating inflation rate.

375 billion of QE, with the typical banking fractional reserve ratio of 20, and spread into the UKs 25 million homes works out at a price increase of 300k per property. And this is exactly how were going to get the doubling in average UK property price were being told to expect.

Doubling house prices gives the government more stamp duty, inheritance and mansion tax, and really annoyingly it also gives the banks more profit because we need bigger mortgages every time we move.

Just the creep in stamp duty alone has ensured that in the UK we now pay the highest property taxes of any country in the developed world. We are already paying double the average and more than 4 times what a typical German family pay!

And for those with real mansions then avoiding this tax is simplicity in itself. Convert the top floor of your average London town house into a self contained and separate flat for the nanny, and rename the basement cinema as a storage cellar. Try doing that with a family of 5 in a two bedroom maisonette.

The proposed mansion tax is simply wrong.


Entire Thread
TopicDate PostedPosted By
why the Mansion tax is utterly wrong03/09/14 10:37:00 Lorne Gifford
   Re:why the Mansion tax is utterly wrong03/09/14 12:52:00 Andy Rooney
      Re:Re:why the Mansion tax is utterly wrong03/09/14 15:35:00 Lorne Gifford
         Re:Re:Re:why the Mansion tax is utterly wrong03/09/14 15:46:00 Susan Kelly
         Re:Re:Re:why the Mansion tax is utterly wrong03/09/14 15:53:00 Will Watson
            Re:Re:Re:Re:why the Mansion tax is utterly wrong03/09/14 16:00:00 Lorne Gifford
               Re:Re:Re:Re:Re:why the Mansion tax is utterly wrong03/09/14 16:06:00 Will Watson
                  Re:Re:Re:Re:Re:Re:why the Mansion tax is utterly wrong03/09/14 16:17:00 Lorne Gifford
                     Re:Re:Re:Re:Re:Re:Re:why the Mansion tax is utterly wrong03/09/14 16:26:00 Will Watson
                        Re:Re:Re:Re:Re:Re:Re:Re:why the Mansion tax is utterly wrong03/09/14 16:39:00 Alex Brown
                           Re:Re:Re:Re:Re:Re:Re:Re:Re:why the Mansion tax is utterly wrong03/09/14 17:30:00 Sam Hearn
                        Re:Re:Re:Re:Re:Re:Re:Re:why the Mansion tax is utterly wrong03/09/14 17:08:00 Sam Hearn
                           Re:Re:Re:Re:Re:Re:Re:Re:Re:why the Mansion tax is utterly wrong03/09/14 17:28:00 Philippa Bond
                              Re:Re:Re:Re:Re:Re:Re:Re:Re:Re:why the Mansion tax is utterly wrong05/09/14 14:41:00 EH McNeill
                                 Re:Re:Re:Re:Re:Re:Re:Re:Re:Re:Re:why the Mansion tax is utterly wrong06/09/14 10:27:00 Will Watson
                              Re:Re:Re:Re:Re:Re:Re:Re:Re:Re:why the Mansion tax is utterly wrong05/09/14 14:57:00 Richard Greenhough
                                 Re:Re:Re:Re:Re:Re:Re:Re:Re:Re:Re:why the Mansion tax is utterly wrong05/09/14 15:52:00 Susan Kelly
                                    Re:Re:Re:Re:Re:Re:Re:Re:Re:Re:Re:Re:why the Mansion tax is utterly wrong05/09/14 19:31:00 EH McNeill
                                       Why the Mansion tax is utterly wrong05/09/14 20:19:00 George Knox
                                       Re:Re:Re:Re:Re:Re:Re:Re:Re:Re:Re:Re:Re:why the Mansion tax is utterly wrong05/09/14 20:40:00 Richard Greenhough
                                          Re:Re:Re:Re:Re:Re:Re:Re:Re:Re:Re:Re:Re:Re:why the Mansion tax is utterly wrong06/09/14 15:43:00 Trudie Fuller
                                             Re:Re:Re:Re:Re:Re:Re:Re:Re:Re:Re:Re:Re:Re:Re:why the Mansion tax is utterly wrong06/09/14 20:01:00 Susan Kelly
                                                Re:Re:Re:Re:Re:Re:Re:Re:Re:Re:Re:Re:Re:Re:Re:Re:why the Mansion tax is utterly wrong06/09/14 20:08:00 Julian Pavey

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