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Taxing those mansions

March 6th, 2012 · Posted by Skuds in Politics · No Comments · Politics

For a change I watched a bit of Newsnight this evening, where it appears that Labour is redundant because they just drag out two Tories with opposing views to discuss a Lib Dem idea. I’m equivocal about this ‘mansion tax’. There are good things about it and bad thing. I think that taxing property or land has its merits but Cable’s big idea is a bit too limited, specific and arbitrary, but whatever my own personal opinions on it, I really can’t have any respect for the arguments against it that were made by Jacob Rees-Mogg.

The gist of his argument was that a mansion tax could see some poor widow forced to move house. Now I am not anti-widow, but the argument seems to be that somebody could be living in a large house that they inherited even though they do not have much of an income and a tax on that propoerty would mean they would have to move to somewhere smaller. So far so good. When that is suggested the reasoned argument is “but its her home”.

I can’t remember Rees-Mogg queueing up to make the same objections about proposed reductions in housing benefits for people who are ‘over-occupying’ or for council tenants to be forced to move to a smaller house when their children leave home. This mythical cash-poor widow in her £2m home has the option to move to a £1m home and put £1m into the bank. I can’t see her getting a lot of sympathy from council tenants forced to move from a home because they have an unused box room. Of course, if it turns out that Rees-Mogg has been tirelessly campaigning for people forcibly evicted from their council homes because their parent died or because their children left home then his trump card of “but its her home” would carry a bit more weight. At least it would be consistent.

I don’t think anybody would be having this argument anyway if council tax was was changed so that there was no cap and the ratio of one band to the next was not rigidly fixed. Just allow councils to add band I, J, K L, M and you would effectively have a mansion tax except it would not cut in suddenly at £2m but get there gradually. It would not require a new tax and new rules, just a tweak to an existing tax so far easier to legislate. Remove the loopholes that let a lot of people avoid paying while you are at it. Also the revenue would go to local councils rather than the government so I can’t see Whitehall being keen on it.

Good to see Rees-Mogg on there though. Every time he speaks you can almost feel him scaring the floating voters.


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