Left Foot Forward makes the case for a mansion tax based on the fact that within the current council tax system the rich do not pay their fair share.
Ed Miliband announced yesterday that a future Labour government under his leadership would reintroduce the 10 pence starting rate of income tax rate scrapped under his predecessor Gordon Brown and pay for the subsequent reduction in revenue to the exchequer through a mansion tax .
Left Foot Forward agreed with this progressive measure, and we set out why here.
It’s also important, however, to look at why the current system is unjust.
At present, a person who owns a house worth tens of millions of pounds can pay the same amount of council tax as a person living in a modest suburban home.
This is because council tax banding is at the same level it was in 1991.
Banding may have stayed the same, but since then property prices have more than quadrupled. The average price for a property in London now sits at a whopping £445,651.
In the table below is the council tax banding for the Royal Borough of Kensington and Chelsea for the financial year 2012/13.
The average house price in this, one of London’s wealthiest boroughs, is just short of one and a half million pounds.
This means that a resident of Kensington and Chelsea, such as Goldman Sachs boss Christoph Stanger, who owns a £7 million pound property in Kensington’s Palace Gardens, pays an annual council tax bill of just over £2,000 – the same as a middle class family owning a property in the neighbouring borough of Tower Hamlets, where the average property costs £367,068 – and also the worst area for child poverty in London.
| Band | Council Tax | Range of values |
|---|---|---|
| A | £717.15 | up to and including £40,000 |
| B | £836.67 | £40,001 to £52,000 |
| C | £956.20 | £52,001 to £68,000 |
| D | £1,075.72 | £68,001 to £88,000 |
| E | £1,314.77 | £88,001 to £120,000 |
| F | £1,553.82 | £120,001 to £160,000 |
| G | £1,792.87 | £160,001 to £320,000 |
| H | £2,151.44 | over £320,000 |
Communities secretary Eric Pickles has also ordered officials to destroy data collected by previous governments that could allow a widespread rebanding of properties. This one of the reasons we now need a mansion tax, because the current system is incredibly unfair.
As for the objection that a mansion tax will force older people out of properties which, due to the house price boom of recent years, are now worth more than £2 million pounds, we could quite easily say that, if you are past a certain age, you can switch your mansion tax into inheritance taxes, paying nothing while you are alive and staying in your house.
68 Responses to “Why a mansion tax? Why now?”
JC
Hi Botty,
You’re coming across as very conservative here. New ideas do seem to challenge you rather. Anyway, carry on playing the man not the ball – it shows you’ve got nothing to offer here.
Newsbot9
Yes yes, keep on claiming that you’re working entirely in your crystal ball, and not in the real world, where you’re certainly trying to play with people’s lives.
And keep on claiming that not immediately shifting the tax burden onto the poor is “conservative”. Mutualism is gradualist – unless a change is beneficial, why make it?
You’re doing a normal complete dismissal of any view which doesn’t accord you total victory – shifting the tax burden downwards, socialising your costs. It’s a one-trick pony.
JC
I don’t remember making any of those claims here. As I said, keep playing the man not the ball. It exposes the paucity of your thinking.
Newsbot9
Nope, there was not a significant brain drain, it was on the scale of most countries. There is one today, as people flee the collapsing economy.
Keep on claiming that people wanting to shelter, food and utilities is “envy”. Labour haven’t followed socialist policies since the 1970’s, but keep calling them left wing and blaming them for everything, as you attack the poor.
Newsbot9
That’s right, I’ll keep looking at the real world not your magical crystal ball where everything works as you demand. Keep refusing to admit those nasty “consequence” things exist. Rejecting cause and effect will get you far in your party, Tory!