Now Ritchie wants to tax money you\’ve not made

And if there is no income a deemed rate of return on asset value should be applied instead and that should then be taxed instead.

Sirisly?

If you\’ve not made any money it should be assumed that you have and you get taxed anyway?

What?

25 thoughts on “Now Ritchie wants to tax money you\’ve not made”

  1. That’s the same principle as Land Value Tax: even if you aren’t letting your property, you still have to pay tax on it. Of course, that’s the whole point of LVT.

  2. What he wants to do, and he’s very clear about this, is to use penal taxation to deter people from putting their money in tax havens.

    What the LVT people want to do is to reduce their own taxes by confiscating the wealth of anyone who’s chosen to invest in property.

  3. To be fair to Murphy, he is merely assuming that everyone else is playing one of the standard tricks he uses himself – converting income taxed at the top rate of tax into capital gains charged at a lower rate.
    Levying a tax on the estimated rate of growth is an anti-avoidance measure which *might* be reasonable where income is being surreptitiously converted into capital so perhaps all such cases should be deemed to be growing at 1% over the risk-free rate – oh, dear since the return on Index-Linked Gilts is -2.43% that would require a tax refund. Could someone who isn’t banned from his blog point that out to him?

  4. john77

    If they aren’t already banned from his blog they will be once they’ve pointed that out. Our best hope now of being able to point out RM’s errors lies with Sunny Hundal….

  5. I read that as “Our best hope now of being able to point out RM’s lies errors with Sunny Hundal…”

  6. @PaulB: re LVT

    That’s one way of looking at it. The other is that land is a common good just like the airwaves and, as such, if you want exclusive access to it then it’s only right that you reimburse the rest of us. Rental value is simply one way of valuing the land in question.

    I’d also like to point out that “the LVT people” aren’t one homogenous group. Some, like Mark Wadsworth, want to replace all taxes with LVT. Others would just like to reform the council tax system we already to have to be more economically efficient.

  7. I’m old enough to remember when they used to do this.

    Schedule A taxed home owners (not tenants, notice) income tax on the imputed income from being able to rent out the home they actually lived in.

    All part of a device to encourage a tenant-based, preferably in council housing, ‘democracy’.

    Sir Gerald Nabarro was the prime mover in campaigning to get Schedule A abolished in the mid-to late ’60s. PBUH.

  8. Just another way the State (and its acolytes, such as this Murphy fella) is going about consuming everyone’s capital: tax you on the unrealised value of your carefully-accumalated wealth, and give the proceeds to those who will vote for them.

    They won’t stop until we are all reduced to penury.

    Unless we stop them first.

  9. @ GeoffH
    But they got tax relief on mortgage interest.
    That goes back to the days when income tax had some relation to ability to pay and if you didn’t have to pay rent then your ability to pay was greater (but if you had to pay mortgage interest it was reduced). Earned income was taxed at a lower rate than investment income.
    Not fair to say it was aimed at getting people to live in Council Houses – it was older than that and when I was a kid most people in Council Houses didn’t pay tax.

  10. I would like to cast a vote. The supreme rationalist PaulB has made the most laughably absurd characterization of LVT I can remember.

    It needs to be commemorated.

  11. Asset based taxation (land taxes, estate taxes, and the like) always seem to start out being levied on the super rich yacht owners and end up being responsible for forcing granny to sell the house she grew up in (add in obligatory terminal disease and desire to die in her own home of course). Income taxes aren’t only way to raise revenue but at least they avoid the asset rich/cash poor problem.

    The irony here is that Ritchie’s proposal provides the perfect incentive for everyone to become the profit chasing capitalist pricks of his fevered dreams. If you’re going to get taxed anyway, you’d damn well better make the most you can from it. Granny would be well-advised to sell her lovely historical house to the highest rapacious developer bidder. If you own agricultural land you’ll farm as intensively as possible. And so on.

  12. Whereas what people like PaulB want to do is to reduce their own taxes by confiscating the wealth of anyone who’s chosen to work hard.

    I would of course be pleased to consider any evidence that I’m mistaken.

  13. It isn’t just grannies who would be forced to sell their houses under LVT.

    Think about the 94 year old woman who got married in the late 1930s and they bought a two-up two-down slum house, then her husband joined the RAF and was killed on a bombing raid. She has struggled to get by ever since on her pittance of a pension. But her house is now worth a couple of million even though it still has no bathroom and an outside lavatory.

  14. ASF: I’m an additional-rate taxpayer. My views on taxation generally are not directed at reducing the amount of tax I pay.

  15. ASF – you totally missed the point. As Lord Vetinari said (in “Jingo” IIRC) “Taxation is about extracting the maximum amount of milk with the minimum amount of moo”.

    Asset based taxes generate a lot of moo, and lot of special exemptions. What the hell is wrong with “if you haven’t earned an income then we won’t tax you?

    “what people like PaulB want to do is to reduce their own taxes by confiscating the wealth of anyone who’s chosen to work hard”

    Sigh. Can I leave this to someone else please?

  16. Ltw – the taxation of incomes that people have earned is, from another perspective, fining people for working honestly, effectively and legally. What kind of a message is that?

    Land value taxation, correctly implemented, is not, the taxation of an asset. It is the taxation of a real or imputed stream of wealth that is accruing to the owner of the land as a result of the presence and activities of the community around, and at the expense of that community whose taxes pay for it all.

    NOT to tax this revenue stream is to tolerate free-riders.

  17. @ Henry Law
    “or imputed stream of wealth”
    Currently we tax actual income
    There is a reason
    Income tax was originally based on ability to pay
    What is the imputed value that should be taxed of Victoria Park in Hackney or Hyde Park or the North Yorks Moors National Park or …

  18. @LongRider, No it isn’t worth dignifying. Well spotted! It was a rhetorical device, not a question. So it doesn’t need a response. It was intended to demonstrate the stupidity of the statement that it parodied. Other examples of this particular device might be:

    “PaulB: I’m a larger-than-average landowner. My views on taxation generally are not directed at reducing the amount of tax I pay.”

    or

    “Income based taxes generate a lot of moo, and a lot of special exemptions. What the hell is wrong with “if you don’t own land then we won’t tax you?”

    Whenever anyone is thinking of making a statement attacking land tax or land taxers, it’s worth thinking about the the same statement with land tax concepts replaced with income tax comcepts. If the income version sounds stupid to you, chances are that the land version sounds stupid to a land taxer.

  19. I note that among all the rude remarks about what I said there’s not a single word of substantive argument. It’s almost as if my allegedly absurd characterization is in fact correct.

  20. Paul, you get what you give. If you wanted substantive argument on LVT you should have provided some. I would have been delighted to respond in kind.

    However since you started with a blanket insult, (“What the LVT people want to do is to reduce their own taxes by confiscating the wealth of anyone who’s chosen to invest in property.” ), unsupported by any substantive argument, that’s what you got in return.

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