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The detail of Ed Miliband's mansion tax is daft The detail of Ed Miliband's mansion tax is daft
(7 months later)
Ed Miliband's support for a mansion tax is sane and equitable. He wants a tax of 1% on the extra value of any house above £2m, embracing some 70,000 properties. These are mostly in the Greater London area, where the top H band – beginning at roughly £900,000 in today's money – no longer relates to reality.Ed Miliband's support for a mansion tax is sane and equitable. He wants a tax of 1% on the extra value of any house above £2m, embracing some 70,000 properties. These are mostly in the Greater London area, where the top H band – beginning at roughly £900,000 in today's money – no longer relates to reality.
The London property market is wildly inflated, compared with the rest of the country: migratory tycoons are paying the same property tax as a mass of middle-class homeowners. Since many of these rich pay few other taxes, it is absurd that they pay virtually nothing for local services. To make local taxes less regressive is fair.The London property market is wildly inflated, compared with the rest of the country: migratory tycoons are paying the same property tax as a mass of middle-class homeowners. Since many of these rich pay few other taxes, it is absurd that they pay virtually nothing for local services. To make local taxes less regressive is fair.
Almost everything else about Miliband's idea is daft. It is daft that the mansion tax revenue should go to the Treasury, involving a huge battle for a redistributed dribble of 67p a week to each taxpayer. Local taxes should go to local government, in critical need after their savaging from the bullying fiscal centralism of their minister, Eric Pickles.Almost everything else about Miliband's idea is daft. It is daft that the mansion tax revenue should go to the Treasury, involving a huge battle for a redistributed dribble of 67p a week to each taxpayer. Local taxes should go to local government, in critical need after their savaging from the bullying fiscal centralism of their minister, Eric Pickles.
By setting the tax at 1%, which is high, Miliband has made sure of a howl of protest from the asset-rich and cash-poor, who will need to find multiples of £5,000 a year for each half million in value above £2m. Faced with a revaluation revolution in 2005, his brother David simply funked it.By setting the tax at 1%, which is high, Miliband has made sure of a howl of protest from the asset-rich and cash-poor, who will need to find multiples of £5,000 a year for each half million in value above £2m. Faced with a revaluation revolution in 2005, his brother David simply funked it.
What would be sensible would be to forget a mansion tax and allow local government to propose new council tax bands in three or four steps above the existing H band. They would start at, say, £1.5m, with an approximate incidence of 0.3 or 0.5%.What would be sensible would be to forget a mansion tax and allow local government to propose new council tax bands in three or four steps above the existing H band. They would start at, say, £1.5m, with an approximate incidence of 0.3 or 0.5%.
This innovation would be less controversial, less savage, spread the incidence and increase the revenue. It would also relate the tax to bands, far easier to set than individual revaluations. Such a progressive reform, starting at roughly £1.5m, would be more acceptable and fairer. As for feasible, this is exactly what they did in Wales in 2005; there was no rebellion.This innovation would be less controversial, less savage, spread the incidence and increase the revenue. It would also relate the tax to bands, far easier to set than individual revaluations. Such a progressive reform, starting at roughly £1.5m, would be more acceptable and fairer. As for feasible, this is exactly what they did in Wales in 2005; there was no rebellion.
The truth is that local taxes are dwindling because governments refuse to let councils fix them. Now government wants to supplement them with a tax on the rich for its own use. By listening to Ed Balls, his grasping, centralist, Treasury freak of a shadow chancellor, Miliband has proposed a minor tax that will be hugely unpopular and will therefore never happen.The truth is that local taxes are dwindling because governments refuse to let councils fix them. Now government wants to supplement them with a tax on the rich for its own use. By listening to Ed Balls, his grasping, centralist, Treasury freak of a shadow chancellor, Miliband has proposed a minor tax that will be hugely unpopular and will therefore never happen.
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