The Liberal Democrats have blundered their way to election disaster with the announcement of a "mansion tax" on houses worth more than £1 million. Poor old Vince Cable, once seen as a voice of economic sanity, is now the target of a sustained assault by the middle class media.
Vince thought he had a vote winner. Tax the rich and make them pay for the tax cuts of the poor was his spin on the announcement. This has gone horribly wrong as many of the Lib-Dem marginal seats are in the south east, where £1 million houses are not so rare.
According to Vince just 1% of housing stock, approximately 200,000 properties come into the million plus class. He argued for a 0.5% tax on the value of these, raising £5,000 per household. However, voters remember the poll tax and the difficulties of collecting that. A mansion tax will be a nightmare. Simply, if you own a £1.2 million house, split it into two and have two £600,000 houses. In addition, the sorts of people who own £1 million plus houses are also good at organising their affairs in order to minimise their tax liabilities. Imagine the battles between town halls and their wealthier residents.
Lastly, Vince's approach attacks people's aspirations. I don't own a £1 million house - yet. But I would certainly like one. If I work hard enough, having paid tax on the money I use to buy one, why should I then pay another £5,000 a year to live in it?
See also: Vince Cable's Dangerous Thinking.
No comments:
Post a Comment