Sunday, January 22, 2012

Punishing success

Vince cable marched back to his socialist roots (again) yesterday by calling for a "Mansion Tax" on any homes valued at more than £2 million. Lot of people will no doubt fall for it as the rich are an easy target in the socialist politics of envy doctrine. Problem is of course is what happens if or when they do this, I doubt Vince has given much thought to this, but as a socialist he wouldn't so he'd probably be gobsmacked at the amount of people with money who will simply up and leave. It's the same with the Tobin tax that socialist politicians desire, they see it as a way to grab some easy money and they think (or don't care) that either the tax wont be passed on to the customer or the companies involved will simply move somewhere that doesn't tax them so much quicker than you could say Laffer curve.

Vince Cable, the Liberal Democrat Business Secretary, is pushing for a mansion tax to be introduced on properties worth more than £2million in this year’s Budget.
While the policy is likely to be opposed by George Osborne, the Chancellor, Mr Cable said that he had spoken to Conservative MPs who backed the plan.
“A mansion tax is still very much on the agenda – it is a very good idea,” Mr Cable told The Sunday Telegraph.
“It is good for two reasons,’’ he said. ''It would constitute a tax on wealth rather than income, which we believe to be right, and also in economic terms it creates the right sort of incentives for the property market.”
Mr Cable added that it was “perverse” that rich “foreigners” could buy expensive properties in Britain and contribute just £1,000 a year in council tax towards the public finances.
Usual stuff from the man féted as an economic expert but only really famous for a one liner about Gordon Brown and Mr Bean. The thing about foreigners is that they'll simply go elsewhere, you know that and I know that, they'll simply stop paying UK tax rates sell their properties and an undervalued amount and sack all the people maintaining it plus putting out of work all the small businesses like plumbers, electricians and landscape gardeners they pay to do the jobs they can't. The point Cable doesn't get (and never will) is that for all these people pay low taxes to live here, they spend their money here too, probably a lot more than they'd pay in taxation as oddly enough the rich have a tendency to be quite generous to those who work for them.
I often run across this tax the rich thing, even from people who really ought to know better, if we tax them too much, well they are rich enough to simply pack up and leave, guess who will have to make up the difference in taxation then? Because I can assure you, the government wont cut back on its spending.
The more millionaires we can attract to live here and spend their money here the better off we'll be and people like Cable will simply drive them off to spend their money elsewhere.

5 annotations:

Weekend Yachtsman said...

Surely just as much the point, is that after a few more years of "quantitative easing" (to inflate away the government's debts), you will find that practically every decent family house in England will be worth £1m, so in no time at all fiscal drag ensures that most people are having their wealth quietly confiscated.

It's a win-win for the State, isn't it?

Anonymous said...

Mr Cable added that it was “perverse” that rich “foreigners” could buy expensive properties in Britain and contribute just £1,000 a year in council tax towards the public finances.

Since properties in the £1 million plus bracket are at least band H, the national average for council tax is almost three times the quoted £1000!
Two conclusions can be drawn from statement.
1. Somewhere there is a council operating with incredible efficiency and it is being hushed up rather than presented as an example for other councils to follow.......... or
2. Cable is totally out of touch with what is going on in the real world.

Captain Haddock said...

Vince Cable .. about as relevant to real life as tits on a bull !

alan scott said...

My council tax on a house bought recently for £340,000 is about £2600 p.a.
Does Mr Cable know what he pays? Does he even know where he lives?

Anonymous said...

Is he aware that this, essentially, will only be a tax on SE England where most of the expensive houses are? Why on earth should you spend your life finally paying for a house that. through no fault of your own, has gone up so much regardless of income. It is a stupid idea from a very stupid man. Not sure his constituents in Richmond will oike this, plenty of very expensive houses there.