In today’s column:
For example, Britain’s housing stock is worth more than £8tn. Council tax – in England, extraordinarily, based on 1991 property values – yields £40bn, a derisory 0.5%of the value of the stock, well below what domestic rates proportionally used to yield before their abolition by Margaret Thatcher. Taking action on this, along with revisiting the taxation of the super-rich and their capital, and the government could comfortably raise the £40bn needed to plug the fiscal black hole.
We already tax property more than pretty much anyone else. Over twice the OED average in fact.
Hey, there might even be a reason why there’s an upper limit on the possibilities of such taxation.
Also offer a credible medium-term plan for spending, taxing and borrowing – borrowing only for capital and science investment – and the “markets” will happily hold and buy more UK government debt at reasonable or even falling interest rates.
Rilly?
Huittoin?????
Difference being, I guess, is that local authorities in other parts of the world aren’t burdened with all the junk that our councils have to handle.
My local gemeinde was heavily in debt for years because the socialist mayor kept on spending money on vanity projects.
In Germany and Austria education and social services operate at the local state level to whom one pays all income related taxes. The state then divvies up the money between itself and central government. The one true “federal” tax in Germany for years was the Solidaritaetszuschlag to pay for the Ossis.
Can he please explain why the amount stolen by the government being less than in the 1980’s is a bad thing?
Why is MOAR TAX! always perceived to be such an unalloyed good thing to these people?
Happily, Labour is halfway there with Gordon Brown’s constitutional review, proposing replacing the Lords with a newly powerful upper house democratically recruited from the UK’s cities, regions and nations. To his list of proposed reforms,
It’s like something from the political equivalent of Halloween or Friday 13th. These proposals, which even a ‘pocket’ electorate under Prescott and Brown couldn’t generate enough enthusiasm for would create even more bureaucracy and bureaucratic entitlement. His political outlook appears stuck in 2000….
If anyone was wondering, the 2016 spike is Iceland and is due to:
Tax revenues for the Property taxes and Others categories in Iceland in 2016 are calculated as the mean of values for 2015 and 2017. Iceland experienced unusually high tax revenues in 2016 from one-off stability contributions from entities that previously operated as commercial or savings banks and were concluding operations. The tax revenues, equivalent to 15.7% of Iceland’s GDP in 2016, led to a spike in the OECD average Property taxes and Others categories.
“Why is MOAR TAX! always perceived to be such an unalloyed good thing to these people?”
It beats working for a living.
The stock is valued at £8trn, as long as there are a limited number of transactions per year, liquidity.
If the liquidity goes up, prices will fall.
Well, a land tax will hit those who have done splendidly out of the renewables scam
Tax this, tax that, tax in this special and miraculous way. It doesn’t matter. You can only get reliable tax receipts by taxing people with income. When you get it or when you spend it. Taxing wealth or property doesn’t work because behaviour and market conditions will adapt. The punter always pays. In effect you only need as a government to determine how much tax you will take out of the economy. However you structure it the punter will pay.
A house is ‘worth’ only what anyone will pay for it at a given time. There is no intrinsic value. On the house insurance policy for my first property I was surprised to see the insured ‘value’ considerably less than what I’d paid for it, the figure being the rebuild cost.
“borrowing only for capital and science investment” Wot larks. Borrowing only for fantasies such as HS2, and for The Science such as has led to calamity.
The future offers only variants on austerity? Bunk. There are ways to invest and grow
Will Hutton
We know, it’s what Kwasi Kwarteng was trying to do before the coup.
Britain’s housing stock is worth more than £8tn.
This is what happens when you have a generation of soft money, assets get pumped up to silly valuations and young people get priced off the bottom of the ladder. Willie, because he’s a fool, thinks this means there’s a huge tax bonanza of unspent cash to go after.
But there isn’t, the average houseowner is being hammered with interest rates, double digit inflation, what’s already the greediest tax burden on Britain since WW2, £6000 energy bills due early next year, credit card and other forms of personal debt, and an uncertain employment future as energy price inflation and lockdown imposed wealth destruction catches up with businesses.
If we do end up with blackouts, that’s going to be another massive kick in the balls for UK plc, because the lockdowns taught us we can’t just switch a complex machine like the modern British economy off and on again like a bloody smart device.
There’s no magic money tree on the horizon, just a pride of pissed off lions. The British people will suffer any amount of indignity and insult by grumbling and carrying on, but threaten their ability to keep a roof over their childrens’ heads and things are going to get Not Nice very quickly. If I was Sir Keir Starmer (eww) I’d be suspicious about why most Conservative MP’s want to hand me the job of PM.
If Steve was Kier Starmer it would be sad as well as eeeew.
OTOH if Sir Queer Smarmer was Steve it could be quite interesting.
Thanks, DocBud. I was wondering.
The devil is in the detail. We over-tax business and under-tax residential property. On residential specifically, we over-tax poor places and under-tax rich places.
I’d hike council tax in rich places (London, SE) but allow people to offset it against income tax. This means that when you retire, you’ll want to get out of London sharpish. (Current retirees would stay on the old system until death; no politician wants to evict granny.)
@AndrewM
I have never understand why the council tax stops at band H
The ‘experts’ say there needs to be arevaluation exercise, from my perspective surely it’s just relative.
AIUI the council tax is currently set at band D and the others around it are proportions higher or lower to get a suitable distribution and make it more progressive, on the assumption that richer people love in more expensive property (doesn’t account for huge govt inspired house inflation and little old ladies sitting on terraces houses on London that are now worth millions after thirty years)
But the tax stops at band H, so a Saudi sheikh in central London is on the same band as more modest houses elsewhere in london
Why not reassess the distribution and add more bands for the higher earners, and lower for the low earners?
It’s all relative in terms of pricing so you don’t even need to much re-evaluation
IMHO the so-called poll tax was better but didn’t appeal to the leftie mob
People like Hutton are frustrated with taxation based on percentages of this or that. They look back in history at the Viking or Mongol raiders who took what they wanted and think that that’s the system to emulate.
Why is MOAR TAX! always perceived to be such an unalloyed good thing to these people?
Because Hutton, Murphy and the rest find ways to evade payment.
Does Britain have a stock of housing? If so why don’t they use it to solve the housing “crisis”? Ah. what he means is people have houses and he thinks they shouldn’t!