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?”
blarg1987
Gareth you are right to say the top 1% pay the most in the form of income tax, however income tax is part of the tax pie, once you take other taxes into account such as gapital gains, share dividen returns, VAT etc and include tax write offs which are heavily used by the top 1% the overall amount of tax paid loos rather different.
No one however has actually done a break down to the overall tax paid by say the top 1% to the assetts and money the make i.e. do they pay 50% of tax on 50% of the overall income to the economy or less, or more?
Once that question has been answered then any debate would be far easier to have.
Although Warren Buffet has a point when he says why should he pay less tax then his secretary when he earns more. I think there needs to be reform so that people pay the taxes to the amount of wealth they generate in the UK directly and indirectly.
peter
Can you explain to me why the mansion tax is made fair by the inadequacies of council tax which is a charge for basic services. I had to paid for my mansion out of taxed income and now it’s proposed I have to pay all over again. So called political ideas in this country are just the politics of envy .
Mick
Well, why don’t go go ’round with your megaphone and shout at Labour? That’s likely to do most good, though my bet is even they won’t listen.
Labour had years of crashing failure with ultra-left wing policies since after the war and that’s a glorious record for the likes of the dinosaurs.
Well, if you want to welcome in all those extra people wanting shelter and food then your option is to.. wait for it… support the global economy which promotes movement of peoples across the world!
VOTE LABOUR! They’ve got what you want, if you just look!
Newsbot9
Ah yes, you want me to commit a public nuscence shouting at a centralist party. Your myths about “ultra-left” are silly, we haven’t had socialists in power since the 1970’s.
Keep trying to trash the economy further by isolationism. The people who need food and shelter are the British people who you’re attacking. The workers you hate so much.
Mick
Well, if it’s the British who need the food and shelter, then halt immigration now. If we can’t even take care of our own, then why let in even more waifs and strays?
“…we haven’t had socialists in power since the 1970’s.” And why? Because you people FAILED on such a scale, Labour had to become New Labour just in order to get in!
Ah the Left – they can’t see their own failures but criticise everybody else!