We need a land and wealth tax to replace income and transaction tax.

grizzly1911

N1AK wrote: »

Which is exactly the kind of naive sentiment that leaves us with stupid policies to begin with. If the government is going to take £50 off you then whether they do it by taking £25 when you earn it and then another £25 off you later or £50 off you straight away is the choice you're making.

The government can keep the current VAT rate, freeze income tax bandings, increase employer NI, tax alcohol harder, increase fuel duty etc and increase taxation by taking by taking more and more of people's income without actually having to put a tax increase in the budget so it's not like refusing new taxes magically stops them taxing more.

And each time fuel/oil/energy goes up the chancellor gets an instant increase in VAT too.

antrobus

IveSeenTheLight wrote: »

Am I understanding this correctly?

A person could work hard, pay their taxes, own their home and when they come to retire many years later upon retirement, they may be forced out of their family home as their income reduces and they need to continue paying higher "land taxes".

Your understanding is correct. It has been referred to as the 'Devon pensioner' problem, with one proposed solution being that the tax liability could be deferred, and become a charge on the estate when the house is sold.

In any event it illustrates the point that when the OECD argues in favour of increased taxes on land, it's not talking about taxing the few thousand acres of windswept Scottish highlands owned by the Duke of Buccleuch (which might be protected by an agricultural exemption anyway), it's talking about taxing the hundreds of billions worth of land on which the UK's 26 million households are situated. Or, to put it simply, your house.

IveSeenTheLight wrote: »

I'm happy with Income Tax.
Pay more as I earn more and less when I earn less.

That's kind of why the OECD thinks that land taxes are "particularly unpopular".

cepheus

IveSeenTheLight wrote: »

Am I understanding this correctly?

A person could work hard, pay their taxes, own their home and when they come to retire many years later upon retirement, they may be forced out of their family home as their income reduces and they need to continue paying higher "land taxes".

We should take the ridiculous excuse that such people can't afford to pay tax on a £2m+ home with the usual dismissal of the whining silver spoon class.

Moreover, I would also question that people with such wealth have really worked any harder than average earners; and can still less justify it in terms of their contribution to society!

Neither does the claim that they would be forced out of their family home stand up to scrutiny. In the small number of cases were they can't find the capital, they could use equity release. It might do their siblings some good to earn their own lot into the bargain!

antrobus

cepheus wrote: »

We should take the ridiculous excuse that such people can't afford to pay tax on a £2m+ home with the usual dismissal of the whining silver spoon class.
...

The OECD's enthusiasm for land taxes is not restricted to those only in possession of £2m+ properties.

N1AK

cepheus wrote: »

We should take the ridiculous excuse that such people can't afford to pay tax on a £2m+ home with the usual dismissal of the whining silver spoon class.

Silver spoon class? How very petulant of you. I have no issue with the idea that people who own multi-million houses can afford to pay additional taxes; I do however think that it would take a special kind of mindset, or inferiority complex, to think that many of the people in that situation didn't work hard to get there compared to many who have not.

I also find it particularly bizarre that someone who lives in a fantastic £1.5 million 7 bed detached house with land in the shires with a rental property empire, Miami villa etc would be unaffected; however someone who lives in a 3 bed flat in Kensington would be.

There's also a real question about how this valuation is done. Council tax has shown just how impossible it is to re-evaluate prices. If it is done purely on last sale price then you'll create some very odd incentives to build expensive properties yourself but not sell them, to not sell if prices increase but rent instead (losing stamp duty as well) or to break large properties into smaller properties if already renting etc.

player

IronWolf wrote: »

We already have one of the most effective and sly taxes on wealth, it's called inflation.

I vehemently oppose all forms of wealth tax bar inheritance tax, it penalises those who are responsible and save for the future.

But would you oppose it if it was implemented at the expense of income tax?

The obvious problem with above is that a whole generation would be clobbered by both during it's implementation.

Thrugelmir

cepheus wrote: »

We should take the ridiculous excuse that such people can't afford to pay tax on a £2m+ home with the usual dismissal of the whining silver spoon class.

Property value alone is an indiscriminate tool. People would merely sell up and move out of London.

BobQ

Thrugelmir wrote: »

Property value alone is an indiscriminate tool. People would merely sell up and move out of London.

I agree its indiscriminate if based on sale value, as it would affect some quite modestly sized properties in London (there are three bed apartments of £5m in Kensington I gather).

But it could also be indiscriminate in other areas if based on plot size or bedrooms or windows or whatever criteria are used and could result in people having to move from their homes because of the tax.

I am inclined to favour a property tax particularly on expensive properties as a means of wealth distribution, but I think that it could be problematic unless their are exemptions or discounts for some people, which itself might be bureaucratic. So for example I would be comfortable with a progressive tax on properties worth over £1m but I would exempt those below 4 bedrooms where it was the owner's only property.

Taxes levied after death are much fairer in my view as they cover all assets.

CLAPTON

The idea behind land value taxes (as opposed to property taxes) isn't about taxation fairness or otherwise but because is encourages the efficient use of land.
So it encourage valuable land to be used rather than unused; encourages land to be used for high value purposes rather than low value.


So empty land in a residential area with planning permission has equal value (and LVT tax) as the adjacent plot with a house on it.

There may well be a case of separate property taxes related to size and occupancy and related to local service provision.

Thrugelmir

CLAPTON wrote: »

but because is encourages the efficient use of land.

So a house with a 5 acre garden in Devon is effectively exempt. While a flat in Canary Wharf isn't.

Another policy on the hoof.