Tuesday, September 25, 2012

Jeremy Warner on message!

Smash and grab raid on middle class wealth is a recipe for disaster

"Taxing land value, in other words, is the equivalent of taxing an economic rent – it does not discourage any socially desirable form of wealth creation. Moreover, in a world where both income and capital are increasingly mobile, there are obvious advantages in taxing the physical; it is less easily avoided. So in an ideal world, you might indeed want to tax land more, while reducing income and other forms of capital taxes to compensate. Yet I’m quite sure that’s not what the Liberal Democrats have in mind."

Posted by mark wadsworth @ 11:00 AM (2210 views)
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13 thoughts on “Jeremy Warner on message!

  • How about a 100% inheritance tax?

    I don’t subscribe to this double taxation idea. If we look at wealth in less of a ‘possessive’ sense and more of a custodial sense, I think society would be better off.

    The best argument I can find for the wealthy (self made) to keep their wealth is that they have the experience to manage it best. They make their money work hard (presumably). Their inheritors have no such claim. It the lesson of our times that those with money have responsibilities beyond merely being rich. The investors in today’s society are in the majority a bunch of superstitious chartists who spend their time playing a ponzi poker game (the stock market).

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  • That’s not much of a rationale for inheritance tax, is it: “The state might as well take it off them, they’ll only squander it anyway”. Let them squander it, what’s the problem? The only problem is with the tendency of land ownership to become ever more concentrated over time. And LVT will sort that out, no need for inheritance tax (which I am against, in principle, and in practice, it’s difficult to get much money out of it, IHT in the UK currently raises less money than the TV licence fee).

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  • “So in an ideal world, you might indeed want to tax land more, while reducing income and other forms of capital taxes to compensate. Yet I’m quite sure that’s not what the Liberal Democrats have in mind. Actually, what they seem to want to do is to tax all of these things more so as to defend entitlement spending.”

    @MW

    I’m not saying I told you so but therein lies the danger in implementing LVT, my emphasis is on implementing, not the theory of LVT.

    Instead of reducing or abolishing income and other taxes, politicians will be unable to resist the temptation of introducing LVT as an additional tax, not on land, but housing regardless of size or value, (thereby increasing rents?) in order to fund some madcap idea such as overseas aid to train sommeliers and wine waiters to serve the uber-rich:

    http://www.telegraph.co.uk/news/worldnews/centralamericaandthecaribbean/barbados/9560410/How-aid-money-is-being-spent-in-Barbados.html

    I am not dismissing the case for LVT but I am still of the opinion that the political elite will simply use it as another means of shafting the majority instead of a means of fairer taxation.

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  • Mr G: “I am not dismissing the case for LVT but I am still of the opinion that the political elite will simply use it as another means of shafting the majority instead of a means of fairer taxation.”

    Yes, that is one of the sticking points isn’t it? So a good start would be to elect a government which isn’t wasteful and corrupt, and whom you could reasonably trust to eliminate the deficit by reducing spending to sensible levels and who would then reduce other taxes £ for £ with hikes in LVT (which is the only way to make it stick, if at the end of each year, people can say, well, my council tax has gone up, but my net pay has gone up even faster and prices in the shops seem to be going down).

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  • @MW

    Agreed, your answer may be the solution but where is the political party that isn’t wasteful and corrupt?

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  • @MW

    Agreed, your answer may be the solution but where is the political party that isn’t wasteful and corrupt?

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  • Me i.e. YPP. We are the party for people with a deep loathing of all quangos, nanny state initiatives, overseas aid, bureacracy, subsidies, PFI projects, corporatism, the EU etc etc.

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  • MW – maybe mr g was referring to an electable political party.

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  • Wouldn’t the simplest solution be to apply capital gains tax on houses. It’s relatively simple to administer and can be done by the sellers solicitor and it won’t actually burden anybody since it will be x% of the increase in value, so unearned income, just like savings which are taxed in this manner (but taken by the bank).

    No doubt won’t be too popular but if ring fenced to pay down the national debt don’t see how anybody could really complain since it’s mostly been caused by excess in the credit markets which has resulted in over inflated house prices which they have benefited from. if you haven’t made money then no tax to pay.

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  • Ic, yet again, that narrows it down to YPP 🙂

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  • I’m not offering IHT as a replacement for LVT.

    But I don’t think its a spurious argument.

    The self made man should be rich as he has proven he can govern his money correctly. The problem with today is that the money experts have managed their funds very poorly (CDOs are the classic example). Money experts, like hedge funds etc, manage these funds because the investor deems them to be more qualified than they are. Therefore the ability for the rich to use their money wisely is in serious doubt.

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  • yes but MW do you have a candidate for wirral west who is better looking than Esther McVey? obviously with all the parties being as useless as each other I tend to vote on looks alone now.

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  • Bankster, we’ll struggle to match her, that much is true 🙁

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