Left Foot Forward sets out five reasons progressives should support Ed Miliband's proposed 'mansion tax'.
The most important (and the most substantial) part of Ed Miliband’s speech in Bedford today was his pledge to reintroduce the 10p tax rate and fund it through a mansion tax.
Not only does it answer the deputy prime minister’s critics in that it provides some substance to Labour’s recent ‘one nation’ sloganeering, it also differentiates the Labour Party from the administration of Gordon Brown, whose scrapping of the 10p tax rate has been used against Ed Miliband’s party repeatedly since 2010 (and was used again yesterday).
Why should progressives support a mansion tax, though?
1. It would only target the very rich; it would only tax houses worth over £2million pounds. Many if not most young people will never get on the property ladder, let along own a house worth more than £2million pounds. Introducing a mansion tax would redistribute money from a small minority to 25 million working people.
2. It would offer less room for tax avoidance than other forms of taxation. In our globalised economy it is becoming easier to escape paying a fair share of tax. While it may be relatively easy for a person with the knowledge to move money into an offshore account, it’s more difficult to conceal a tangible piece of real estate.
3. It would raise significant sums for a future Labour treasury at a time when the nation’s finances are likely to be tight. Should Labour win power in 2015, it will take time to repair the damage done to the economy by the coalition. Money will be tight for several years even if the economy does begin to pick up again.
4. Spiraling property values make an unfairly low contribution to taxation receipts. Current taxes on property were introduced in easier times. As yesterday’s Office for National Statistics report showed, times have changed, and real incomes have been in decline for almost half a decade now. At the same time those who own property have seen a windfall. Our tax system should reflect that.
5. It is deeply unconservative. It taxes wealth that is often unearned and it returns money to working people.
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30 Responses to “Five reasons progressives should support Ed’s mansion tax”
LB
So lets see.
1. Spain. Big investments in housing and high speed rail. Just what you’re advocating. Evidence is that the policy fails.
2. Japan. Big investments. 300% of GDP borrowed and spent. Economy has flat lined for 20 years.
3. UK. QE is massive state borrowing and spending to increase demand. 375 bn borrowed by the state and spent. Massive boom? Nope. Bugger all effect.
4. Ireland. Lots of house building. Must be booming. Hmmm, gone the other way.
….
Where you are right is over taking a risk, and getting a return. However, we’ve a Labour wonk newbot castigating, calling people genocidal maniacs, for wanting a return for their cash. His approach, we should confiscate the lot. Lots in Labour are advocating that.
So people have cottoned on. Why risk, when you take the return off them?
Patrick Brennan
Owners of property valued at £2M+ are very likely in the best position to ensure avoidance of any new mansion tax. Legislation will (somehow) have to be framed to ensure that such residences which are suddenly owned by corporations/businesses rather than their occupants do not escape the new charge. Never easy to ensure that Tax Law has the effect that politicians intend!
blarg1987
irish housing boom was PRIVATE as was spainish housing boom. rail is long term i.e. 10-30 years so can look back at it then.
Japan has been an odd economy, although I do not know exactly what the state has invested in so can not comment.
QE is not investment, it is just buying assets like housing at a pre crash level and hoping the cycle continues. Real investment is if the BOE put up the money to build a new generation of social housing which are run for little profit.
mansion owner
Err, I think the reason you like mansion tax is because someone will have to pay it. Personally I’m in favour of the elevator tax whereby everyone that uses an elevator instead of the stairs has to pay a levee. This is a much fairer way of raising revenuecas well as being good forvthe environment. It even has a snappy ‘mansion tax’ type label. It’s called ‘Lazy fat git tax’
mansion owner
Personally I like the way mr Brown told everyone he was going to sell all our gold before hand. This ensured the gold price nosedived and made absolutely certain he would be selling it at its lowest ever real value. You just can’t make such genius up