Scary stuff.... Milliband starts talking about 10p tax bands!

N1AK

the_flying_pig wrote: »

see highlighted comments above

Income Tax requires you to declare what you have earned. Taxes based on assets would require you to value and declare the things you own including money etc; so you'd have to explain what you've earn, what you spend it on and what you have left.

Can't explain where £100,000 went, expect to have the auditors round your house to see if you have a pile of Sovereigns hidden under the mattress.

If you can't see how asset based taxation has to be massively more intrusive then you really shouldn't be commenting on this.

N1AK

pc1271 wrote: »

Why can't the govt set a really simple law that says eg "20% of all income/benefit paid as tax". No loopholes, no avoidance schemes. If the principle is law, then anyone who does not comply with the principle is evading tax and can be prosecuted, regardless of the letter of the law.

If I give you a gold watch for Christmas do you need to give 20% of it to the government? How about if I let you live in a house I rent for free in return for you working for my firm; drive a car I provide, go on holidays I pay for.

If you just mean cash income how do you handle taxes on shares? Tax on the original value, tax on increase in value, what if they fall in value... Would you drop tax relief on pensions? If you don't pension payments would fall and government would need to make up the shortfall, or would you leave the future elderly to rot?

There are a lot of reasons the tax code can't be that simple; but yes I do think we'd be a lot better off if we simplified it as much as possible.

the_flying_pig

N1AK wrote: »

Income Tax requires you to declare what you have earned. Taxes based on assets would require you to value and declare the things you own including money etc; so you'd have to explain what you've earn, what you spend it on and what you have left.

Can't explain where £100,000 went, expect to have the auditors round your house to see if you have a pile of Sovereigns hidden under the mattress.

If you can't see how asset based taxation has to be massively more intrusive then you really shouldn't be commenting on this.

as you well know it'd be a mansion tax only, rather than on sovereigns etc.

i suppose that we already do have a tax based, albeit very crudely, on [1991] property values, i.e. the council tax. i should think they'd have to use those same values, or else repeat the same very crude exercise. it's be a nonsense, clearly, to revalue every year.

michaels

the_flying_pig wrote: »

as you well know it'd be a mansion tax only, rather than on sovereigns etc.

i suppose that we already do have a tax based, albeit very crudely, on [1991] property values, i.e. the council tax. i should think they'd have to use those same values, or else repeat the same very crude exercise. it's be a nonsense, clearly, to revalue every year.

So if I buy a house then I have an asset that should be taxed each year but any other asset I buy should not be taxed? What is it about housing as an asset that makes it especially derserving of unique tax treatment. Gerenlly higher taxes are imposed on 'vices' to discourage them such as alcohol and toabacco taxes. Are you saying that investing in housing as an asset needs to be discouraged at the expense of other asset classes? Why?

N1AK

pc1271 wrote: »

Even low earners should get used to paying tax on any income so as to avoid a cliff edge between 0% and 20%.

People don't need to get 'used' to paying tax it's not like they have to do anything to arrange it and they will still always earn more money when their pay increases so that's a pretty hyperbolic statement.

If someone is earning £8k and needs benefits now just taking another £400 off them in tax to need to give it back in benefits just adds more cost.

N1AK

the_flying_pig wrote: »

as you well know it'd be a mansion tax only, rather than on sovereigns etc.

As you should the question was whether taxes on assets are fairer than income. As you should also well know asset does not mean 'mansion'.

As to mansion taxes in particular. I'm not a fan but obviously that wouldn't have to be overly intrusive to implement. Council tax bandings are hardly a great example to demonstrate though as they have failed miserably because people don't want properties to be re-valued.

If you simply 'value' all properties then you'll great a wasteland of properties in the ~£2m-£3m. To raise the money Labour claim you'd need to tax 4% of value. Who in their right mind is going to buy a property worth £2m if it means paying £80k a year to keep it when they could buy a £1.99m property and avoid it.

People would literally bulldoze properties just above the threshold to use the land to build cheaper properties; or split them into two or more parts.

I do find the idea that someone who lives in a £1.8m house and owns 10x £300k rental properties and a villa in Italy would be unaffected but someone who owns a house worth £2m would get battered.

the_flying_pig

michaels wrote: »

So if I buy a house then I have an asset that should be taxed each year but any other asset I buy should not be taxed? What is it about housing as an asset that makes it especially derserving of unique tax treatment. Gerenlly higher taxes are imposed on 'vices' to discourage them such as alcohol and toabacco taxes. Are you saying that investing in housing as an asset needs to be discouraged at the expense of other asset classes? Why?

there's some truth in what you're saying, i'd say that basically ease of collection is the key thing.

if you have a load of gold bullion buried in a big hole that you dug on a beach , X marking the spot, somewhere in the British Virgin Islands, then as the taxman I'm going to have a hard time finding & taxing this wealth.

it's quite a lot easier to drive up a street of expensive houses & slap a tax bill, with no shields, no getouts, etc, on every one of them.

whilst i agree that it'd be fairer to tax all assets equally the fact that isn't feasible is not a reason not to tax any assets at all - taxing just pwoperdee would be an acceptable second best, clearly.

nicko33

the_flying_pig wrote: »

we have to raise tax revenue somehow.

Tru-Labour mantra number 1.

the_flying_pig

N1AK wrote: »

...I do find the idea that someone who lives in a £1.8m house and owns 10x £300k rental properties and a villa in Italy would be unaffected but someone who owns a house worth £2m would get battered.

that's a fairly daft argument - fairest of all might be to collect revenue from the 10x300k guy also, but that's probably not feasible, so what's better, to collect nothing from the £2m guy or collect something? what's less fair, the person with no assets paying as much tax as someone with £2m worth, or someone with £2m worth paying more than someone with none but the £3m guy getting away with paying nothing?

above all this tax would have to be easy to collect, and going after 10x£300k types would be near impossible - it'd be easy enough to divvy out the ten between different holding companies, family members, & so on.

N1AK wrote: »

...If you simply 'value' all properties then you'll great a wasteland of properties in the ~£2m-£3m. To raise the money Labour claim you'd need to tax 4% of value. Who in their right mind is going to buy a property worth £2m if it means paying £80k a year to keep it when they could buy a £1.99m property and avoid it...
...

this is a semi-valid concern in that you can see potential distortions & perversities, as with current stamp duty, but i'm struggling to believe that they'd be all that cataclysmic... and the number of non-valid concerns that are being slung around on this thread, not just by you, show some fairly obvious twister ideology or VIs of one sort or another are what's really at play here.

N1AK

the_flying_pig wrote: »

what's less fair, the person with no assets paying as much tax as someone with £2m worth, or someone with £2m worth paying more than someone with none but the £3m guy getting away with paying nothing?

You speak of daft arguments then revert back to vague notions of fairness. If you can twist that to mean that taxing someone considerably more than someone else even though they could be vastly less wealthy and on a lower income is fair then you're better at mental contortion than I am.

Inheritance tax accounts for someone's entire property portfolio and other assets. If we're going to raise money money based on the wealth people have accumulated then do it via this mechanism which already exists, is administered and hasn't got the gaping holes that a mansion tax brings.