It seems I might be a wee bit out on a limb here – a familiar position it has to be said; but this leopard (out on his limb you see) is not going to change his spots.
It seems colleagues from around the Lib Dems, including folks from ALTER, and also land tax campaigners from outside the party seem to think the so called “Mansion Tax” announced at Conference the other day, in which residential properties worth more than a million pounds will attract a new half pence in the pound property tax, is “A Good Thing” or a “Step In The Right Direction”. I absolutely disagree.
I’ll go further: I think it is “A Bad Thing” and a “Step In The Wrong Direction”. It threatens to undermine a broader implementation of a proper land tax. It raises very little, by way of a tax deliberately targeted on a particular group of people; a group of people who have considerable clout, in the main, and who have already shown, through the successful agitation of a similar group in getting Tory policy on Inheritance Tax changed, to whip up the fear of an “envy tax” amongst people unlikely ever to fall under its regime.
It combines everything we know to be bad about the Council Tax with none of what we promote as good about Land Value Tax. It sends precisely the wrong signals about land tax – that it is about raising a bit more revenue, not creating a new fiscal system where tax can be used to benefit directly the least well off (in the case of the land taxes by reducing markedly their costs of maintaining a basic living in the form of their shelter).
It seems to me that it is primarily aimed at sating the desire for a particular type of modern liberal to hammer the wealthy in order to “redistribute” to the less well off, rather than to create a genuinely more equitable system in which taxation is transparent, applied as far as possible to everyone of a similar class – ie land owners or income earners and so on.
The greatest benefits of land taxes can only be gained when land taxes are applied to the sort of land that those of us struggling to find a home need to be cheaper – which means taxing all land. If we cannot show these benefits, and quickly, then the arguments for land taxes will go stale before the benefits are apparent, and this sort of measure will foreshorten that process.
Also at conference, ALTER published their long awaited book of essays on the benefits and effects of land taxes. For those who read it, I cannot imagine that they would not conclude that land taxes are, in fact a “no brainer”. We should get on and do it, or not at all. Not trifle around with a measure that will act to galvanize opposition to “any idea of a property tax coming out of the Lib Dems”. In his foreword to the book Vince Cable says that, in contrast to 1909 we now need to know precisely what it is we want to implement and have a plan for doing so.
The “Mansion Tax” is part of neither.