| Topic: | Re:Re:Re:Re:Re:Re:Re:Re:Re:Re:why the Mansion tax is utterly wrong | |
| Posted by: | EH McNeill | |
| Date/Time: | 05/09/14 14:41:00 |
| There are many factors to this debate - none of them new! The physoicrats originally argued that all tax effectively has to be paid out of rents so they suggested the "impot unique" - a single tax on land. Their argument recognises that there's a difference between the effective incidence and the formal incidence of taxation. For example, some have argued in this thread that council tax is not a property tax. The physiocrat would argue that this is confusing formal incidence with effective indicence - ultimately if council tax were to be removed, rents (and thus property prices) would rise to negate the effect.* A significant argument for a property tax is that, if properly implemented, it does not result in reduced economic activity (in the same way for example that a tax on wages results in lower employement). In fact, from an economic perspective, property taxes are amongst the most efficient there are. I would suggest reading chapter 16 of the Mirrlees Review to get a well balanced review of the literature on this - (http://www.ifs.org.uk/publications/5353). Finally, the other point that I'd make is that property taxes act to reduce financial inequality - remember that the £100k increase in your property value last year is absolutely no reflection of anything you've done. In fact - the value went up because the location became more highly valued and this is as a result of public spending on infrastructure and your property's proximity to shops, roads and other community services. A property tax would ensure that this increase in value is returned to the community instead of being put into private pockets. In fact, you could even stop calling it a tax and actually call it a service charge! So let's not throw the baby out with the bath water. I'm not an advocate for higher taxation, but am an advocate for a fairer system of taxation. Anything that brings more financial equalty and rewards those that work over those that don't, I think is worthy of careful consideration! * Interestingly, Winston Churchill was a stong advocate of a land-value tax and in one of his speeches he brings up an example of just this privatisation of a public benefit when a toll bridge was bought by the local community in order to prevent them paying a toll. Read: http://www.progress.org/banneker/chur.html (5th para from the bottom, but it's pretty short if you want to read it all). |