Firstly let me make it clear that the proposed Mansion Tax has no effect whatsoever on me.
Our greatest ever Prime Minister, Margaret Thatcher, famously said: “The problem with socialism is that you eventually run out of other people’s money”. This is something that we all know to be a truth and which we have seen with every British Labour government. Basically their ridiculous dogma forces them into fiscal incontinence. They mistakenly believe that state spending has merit and that more state spending has more merit. So they spend, spend, spend other people’s money.
Successive Labour governments have tried to fund their uncontrolled spending either by screwing it out of people who have succeeded (Wilson and Callaghan) or by borrowing like crazy, in the expectation that future generations will pay for it (Gordon Brown).
Now Ed Balls is in a corner, he wants to spend like crazy but he cannot borrow more money. So he is going to extort it from successful people instead with his Mansion Tax. Home owners in the  £2m to 3m band will pay an extra £250 a month through this new tax. owners of homes worth tens of millions of pounds will make much bigger payments.  Second home owners will pay far more than people living in their only home. Retired people, who have worked and saved all their lives but who cannot afford this extortion will have it deducted from their estate when they die.
The estate agents Knight Frank say that 36% of £2m plus homes are detached, 31% are terraced, 22% are flats and 11% are semi-detached. So hardly mansions. David Cameron says it “is not sensible for a country that wants to attract wealth creation, wants to reward saving and people who work hard and do the right thing”. He is right. Paul Green of Saga says: “This is not a tax on the sort of people in Downton Abbey. This is a tax on ordinary families who live in ordinary suburbs who may have lived in their house a long time and seen house prices grow significantly in their area. Many will not be wealthy. It will be a frightening prospect to many older people who already worry about bills”. He is also right.
There is a very simple way for rich and successful people to avoid paying extortionate taxes and that is to move to a place where the taxes are lower. Dubai, Switzerland, Monaco, Jersey, Isle of Man, Singapore, Andorra etc. It is not just Lewis Hamilton and Philip Green. Many hundreds of thousands of wealthy people have voted with their feet to escape excessive UK taxes. We lose at least a half of our potential Income Tax revenue by frightening away the most successful people in our society. George Osborne is already taxing the rich far, far too hard.
In Britain we often get taxed twice on the same money. Once when we earn it and again when we spend it. Sometimes we get taxed three times on the same money, once when we earn it, a second time when we buy assets and a third time when we die. Now Labour want to tax people four times on the same money, Income Tax when they earn it, Stamp Duty when they buy a house, Mansion Tax as a punishment for being successful and then Inheritance Tax when they die. The state is utterly out of control and we voters should be doing something about it.
Another stupidity of the Mansion Tax is that it rewards the wrong sort of behaviour. If someone is successful and earns lots of money which they spend on coke and hookers then the government only collect tax once, when the money is earned. If however that person spends their money building a home for their family then they will be taxed four times. This is very wrong.
Now we come to the most ridiculous part. The great, Nobel Prize winning, economist Friedrich August von Hayek said: “If socialist understood economics, they wouldn’t be socialists”. So it is with the Mansion Tax. It will probably reduce government income. This is because price elasticity of demand means that it will greatly reduce house prices. So the government will collect far less in Stamp Duty. A reduction probably greater than what Mansion Tax will deliver. The thing is that Labour must know this, the Mansion Tax makes no economic sense. Which means they must only be proposing it for political reasons. Class warfare. Being seen to punish success and reward failure. Mansion Tax is purely an envy tax.
In 2013/4 revenue from Stamp Duty on property was more than £9bn. Labour say that the Mansion Tax will create £1.2bn. The Centre for Economics and Business Research have analysed the revenue claim. They say that only £162m a year will be received from the 54,000 homes worth £2m to £3m. The remaining £1.04bn would have to be taxed on the 43,000 homes worth over £3m, which averages £24,000 per home. And remember that the British Government spends £2bn every single day. So the £1.2bn that Mansion Tax is supposed to generate is petty cash. More proof that this is a purely political move.
It is one of the nastiest facets of the British personality that there is so much envy in our society. Stoked up by the left. Hard work, investment, risk taking and success is seen as being somehow bad and something to be punished. Whilst laziness, fecklessness and failure are something to be rewarded. Any way you look at this it is utterly disgusting and amoral.
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The Mansion Tax is not a tax on income/capital. It’s incidence falls entirely on land, so it is a user fee. Which is morally and economically different from a “tax” on private income/capital.
Unlike damaging taxes on income/capital, it doesn’t carry any deadweight losses, so doesn’t shrink GDP. In fact by reducing a small fraction of the free lunch of land rent currently enjoyed by freeholders, it helps allocational efficiency.
State policy doesn’t get much more pro-Capital formation than the Mansion Tax.
Of course, the Tories are not a Capitalist party. They are the party of capitalised land rent, which is poison to free market capitalism. But that suits bankers, landlords and the idle rich just fine. And they donate to the Tory confers handsomely to show their gratitude.
“If socialist understood economics, they wouldn’t be socialistsâ€. Not just Socialists.
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ya still making shit up bruce.
sad sad old man .
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Hi Robert Ambidge.
IP address = 216.185.39.159
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Let me complete your first meme for you, since it lacks an important clause from each statement.
A socialist is disgusted by an expensive house, and thinks “No-one should live like that… while others are deliberately kept in abject poverty”.
A capitalist sees that same house and thinks, “Everyone should be able to live like this…” knowing full well that the system does not allow it.
I think you know this, deep down in your soul, as much as your ego may try to suppress it.
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Jonathan,
A century and a half ago poor people in Britain were crowded into terraced accomodation with outside privvies and no running water.
Capitalism has been so massively successful that poor people today live better than rich people did then, with hot and cold running water, central heating, double glazing and huge televisions.
Not only that, poor people today can become millionaires if they are enterprising and hard working. Many do.
Poverty is largely a consequence of choice. Smoke, booze, ignore school, avoid work, have kids at 15. People bring poverty upon themselves.
I am sorry you are so bitter and misguided, with luck you might grow out of it.
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Ah, the sweet, self-righteous smell of the Protest Work Ethic. One day you’ll move beyond your self-centric view of mankind. You are the one who is bitter and misguided. Every one of your pieces spews bile and invective. Your analyses invariably demonise socialism yet fail to take into account the enormous contribution that it has made to securing the better conditions that you describe above, which does not occur under the system you love, save for the actions of a few philanthropists. Have you read “Confessions of an Economic Hit-Man”, or “the Globalisation of Poverty”? Still you must be impressed by the rise in popularity of food banks under the Cameron administration. Or maybe not. Your analysis is so bigoted it is laughable. Your capitalist cronies can’t resist slagging off the bloated state, whilst secretly rubbing their hands with glee at the prospect of a bit of asset-stripping. The hypocrisy there is eye-watering. Your system is in its death-throes. People are slowly realising they have been conned, but at the minute the blame is sussessfully being pinned on immigrants, without looking at for example the impact on housing caused by selling off vast swathes of London to foreign oligarchs, or the laundering of billions of tax receipts and tax evasion through the Finchley Road shell companies that politicians of all complexions have scurrilously enjoyed. Your system values things above people and pats people on the head if they play the game, whilst refusing to acknowledge the possibility of an alternative. It also has to be forced to acknowledge the damage it does to the environment (on which it depends).
Mankind will not be free until we learn to give instead of take.
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Jonathan,
The food that you eat and the clothes that you wear were produced and paid for by capitalism. The roads and railways you use and the buildings you live in and work in were produced and paid for by capitalism. The division of labour, markets, the use of money and credit and the pre-eminence of the customer have created the world’s wealth. In every capitalist transaction both parties benefit. The only focus of capitalism is competing in the market to look after customers. Capitalism occupies the highest moral ground as it has brought the world out of poverty and has provide the wherewithal to provide mankind with his needs in the most efficient manner possible.
Socialism, on the other hand is pure evil. It seeks to reward shirkers and punish strivers, it is driven by the base human emotion of envy. In order for socialism to be implemented the state must own and control every citizen. Socialism is authoritarianism and the removal of freedom. And socialism always fails. Every single time. Socialism trashes entire economies and blights the lives of everyone it touches. Socialism is worse than cancer.
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Well that must be the only solution that is possible, then. Well done Bruce. You have convinced me with your stunning logic. You fail to realise that the very act of competition means that there must be losers. When that’s on the sports field that’s all well and good because it doesn’t matter. Trouble is, when livelihoods are involved, I assert that that is not acceptable. Since your system has had quite a few centuries to convince us that it works and it has palpably failed to do so, I submit that you are wrong. If it had succeeded you wouldn’t be bleating all this right-wing think-tank knee-jerk justification for greed as the only valid human motivation. I assert that true socialism has never been allowed to succeed, purely because it has been obliged to operate alongside capitalism, a system which seeks to destroy socialism. You’re really hung up on this notion of shirkers, aren’t you, when I would submit that shirkers constitute a tiny proportion of humanity, contrary to what the Daily Fail or the Excess would have us believe. Most of humanity want the same things, the basic needs of food, shelter, clothing and where possible love, met and beyond that, personal fulfilment. Your system encourages us to quantify success in terms of things. It has to, because it depends on selling things in order to succeed. Your system is the one that poisons everything it touches since it encourages us to deny our common humanity and to be out to get one over on the other. It dangles the carrot of ever more labour saving gadgets, but throws on the scrapheap those who are sacrificed in the process and encourages us to invent ever more bizarre and irrelevant ways of earning money in order to make a living to carry on feeding the monster. If anything I’m in favour of a sustainable anarchic model, with an infrastructure capable of redistributing surpluses, with a moral code somewhere between do as you would be done by and Buddhism. And before you make any more assumptions about me, I’m in favour of a society which allows a right to use rather than a right to own. Work is what needs doing in your local community, and in return you have the freedom to pursue whatever personal enrichment activities you choose, whenever you choose. By abolishing all the crap that comes with ownership you can rid the world of parasites like bankers, insurance agents, accountants and advertisers all of which do jack shit that is of any use and probably halve the working week for everybody else in the process. Also you take responsibility for your own shit. Quantity surveyors would be safe, because we need to know how much stuff we need to build things and repair things. Built-in obsolescence, a core tenet of your unholy, wasteful system would be a thing of the past. I would willingly trade what we have today in return for this. But maybe I have evolved to a higher level of consciousness 😉 People are what is important, not things, and we are all individuals, so your labels, such as “shirker” and “striver” are at best unhelpful and at worst part of the problem. Oh also your analysis fails to take into account the immoral wealth built on slavery that lies at the root of your trickle down fantasy and also the contribution that the state makes to infrastructure, education and health.
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Jonathan Russell
Your comment is a work of fiction and owes nothing to reality. Your dogma is the exact opposite of the facts.
Over the last 30 years billions of people in the world have been brought out of poverty purely by the power of capitalism. This is one of the greatest success stories in history. A huge victory for capitalism.
Read and learn: https://www.cato.org/publications/commentary/global-povertys-defeat-capitalisms-triumph
You rail against inequality but it is inevitable. Some people are enterprising, hard working strivers, whereas others are indolent, feckless shirkers. You would reward both equally, thus removing any incentive for success. Every time this has been tried it has inevitably failed.
Relative wealth and relative income in a society is measured by Gini Coefficients. These have been coming down steadily in all capitalist countries. Not because of lefty redistribution, but because of billions of people striving to succeed and build lives for their families.
You hate the super rich but they are nearly all self made. If they did it then anyone can do it. This is far fairer than socialism where nobody can do it.
The world’s biggest inequalities are the socialist countries, where the lifetime leaders plunder the economy for their own benefit. The Castro families live in sumptuous luxury, whilst the ordinary people of Cuba suffer from grinding poverty. The Chavez family are the richest in Venezuela, whilst the ordinary people have been getting steadily poorer due to his policies, despite the country having the world’s greatest oil reserves. And in North Korea Kim Jong-un and his cronies live a fabulously wealthy lifestyle whilst most of the population barely have enough calories. This is the reality of socialism.
Capitalism is common humanity because capitalism is all about looking after people. Capitalism is about competing in the market to provide people with what they want. Both parties benefit from every capitalist transaction. Any capitalist who fails to look after their customers goes out of business. Under socialism the state monopolies have no need to look after their customers, so they don’t.
Socialism is all about state ownership, mainly of people. It is very highly authoritarian. Hitler, Stalin and Mao were socialists. Under socialism there is no incentive to look after customers or to succeed. When we had nationalised industries in Britain they were pure excrement, they provided abysmal services whilst running up enormous losses. Margaret Thatcher’s privatisations transformed them, not because she sold them off, but because she introduced competition, which is essential for any market and thus for capitalism. So they were forced to care for their customers.
There are some things that are evil and which we abhor; cronyism, clientism, corruption. None of these are capitalism, in fact by their very nature they are far, far more common with socialism.
Basically socialism is a disease. Worse than cancer for the amount of harm that it has brought to people. Whereas capitalism is about freedom and about helping people. It has generated all the world’s wealth and has given us all an incredible quality of life.
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Oh, and it’s your system that thrives on envy… Or can’t you see that?
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I do apologize. That should have read Protestant Work Ethic.
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Oh and I’ll know I’ve arrived when I’ve got a huge television 😉 Man what a sad summary of human endeavour…
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Trust the Koch brothers (Cato) to set the global poverty bar nice and low. Capitalism has to be forced to address environmental issues and low pay. Since all the examples of socialism you cite involve wealthy elites, then they are not examples of socialism, although this is a common trick employed in the anti-socialist narrative. Socialism has never been tried. Economics is a man-made game that has no relevance to human happiness and in fact serves to destroy it as the increase in Western mental illness and suicides attests.
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Jonathan Russell
Lefties always say this. “Socialism has never worked the hundreds of times it has been tried, because they did it wrong. Next time it will work”.
But it never can, because it takes away personal freedom and it punishes achievement.
Socialism is utterly immoral, it seeks to harm one’s fellow man. Socialists always hate anyone who has more than them, so they go through life full of the poisoned bitterness of envy.
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You dismiss socialists in terms that you understand because you don’t understand the real grievance. It’s not envy, it’s (speaking personally) more like contempt. If everyone were able to enjoy better lifestyles as a result of a bit of hard work then I might even agree with you. But that is not the situation world-wide and the UN gives a different figure for poverty from that of the immoral Koch brothers (1.90 USD per day, really? You’re comfortable with that?) There are plenty of people in this world who graft and get nowhere through no fault of their own. Where the contempt comes in is because the super-rich seem to have this arrogant sense of entitlement to a greater share of the world’s resources than anyone else, when the playing-field is not level, even though you think it is. There is great truth in the maxim “show me a rich man and I’ll show you a crook”. Competition is at the root of this villainy, because businesses are out to beat each other, by fair means or foul. It results in bombs being dropped on the innocent over control of oil and gas resources – the current conflicts in the Middle East and Ukraine are a case in point – all due to the West’s rapacious greed – we consume as though we have the resources of 3 Earths, not one. So yes, when I see the super-rich with their yachts and fast cars and mansions, I know that somewhere, in some sacrifice-zone on the planet, the Earth and/or its people have been allowed to die because the system doesn’t give a shit and the consumers are encouraged to turn a blind eye, or have been distracted by neon lights and big prizes. That’s why I hold the super-rich in contempt. Since ww2, the US has indulged in a shameless campaign of building wealth on the back of exploiting 3rd World countries, tying them into debt to finance grossly inefficient infrastructure projects built by US companies. Growing cash crops for export to finance debt (and enable little else) ensuring that when there’s a drought there’s a famine, as has been the case in some African countries, disgusts me. And now that model has been exported to so-called developing nations like China who have responded in kind (and we don’t like it because it’s competition – we can dish it out but we can’t take it). So yeah, over the last few years I’ve seen behind the façade of our civilisation and I’m thoroughly disgusted by it. It does not deliver what you claim.