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.
30 Responses to “Five reasons progressives should support Ed’s mansion tax”
mansion owner
C) actually; create a ficticious granny flat from the top floor thus devaluing your house to a maisonette, and get a council tax rebate for it being unoccupied.
Mick
‘5. It is deeply unconservative. It taxes wealth that is often unearned and it returns money to working people.’
Ruling Lefties can think ANY wealth above certain arbitrary thresholds are ‘unearned’. That’s why Labour taxed the Beatles at 96% until they broke up. (They wouldn’t have tinkered with Apple otherwise.)
And there’s unearned wealth right at the the bottom of the ladder. How many violent, tattooed, crass unemployables do you see going about in new fashionable clothes, even cars, and somehow finding the money to drink all day? Or get drugs or trade jewellery? Real-life stereotypes abound. Tax them too Left?
Mick
..And before the Left claim I’ve never met any, I once had a fleet of noisy, assaulting ‘chav-testibles’ living just upstairs to me!
Mick
Talking of thugs, remember Prescott’s famous assault on a fellow leftie? Had that been a BNP man, imagine the outrage coming from him!
LB
Real investment is spending that
a) Generates more return than the cost of borrowing
b) Generates more savings (cuts) than the cost of borrowing.
Adjusted for a higher return, to cover the losses from the projects that fail.
So if you want QE cash to go into investment by the state, you need to come up with a plan.
1. 150 bn a year overspend. What cuts in spending to get that down to zero. Otherwise, you are just borrowing to spend.
2. Which projects have a positive cashflow? See a and b above.
For example HS2 is negative. It will never pay its way.
Schooling? Well since it costs more in government spending than you get back in tax, on average we aren’t meeting the test.