to think the idea of a mansion tax just penalises London and the south

[Redpipe]

I will probably get flamed for saying this but I don't believe that owning a 2 million pound house automatically makes you rich. Certainly in London a 2 million will not buy you a mansion, more like a terraced family home.

AIBU to think that the idea just penalises people in the south?

And where does it say that if you've worked bloody, bloody hard and happened to earn a lot if money you are morally obliged to trade down because other people have perhaps not been as lucky, or quite possibly not worked quite as hard as someone richer than they are?

Sorry Crowler, I meant to direct my comment to IAmMiranda - posted too slow!

And PurpleGirly it is families like Vix's that are making a massive contribution to the Exchequer and helping keep the UK economy afloat (she said about 50 jobs at her work depended on her and her DH's jobs, quite aside from the help she employs at home). Its not just the tax on her and her DH's earnings, but the tax on those employees' salaries and (if she's in a service industry) the VAT charged on her company's fees to their clients the country would lose if she followed your advice. I'm not flaming you, I think your life sounds good and that you are making a valuable contribution by educating the next generation. But this country relies very heavily on the tax it takes from the London financial services industry (not just banking, but insurance, accountancy and the law - all of which are massive exports). We should be very wary of killing off the golden geese.

Its not just the mega-rich non-doms who are inflating central London property prices but also the rental demand from high-end executives of foreign corporations. Their rents are paid by those corporations. A mansion tax would no doubt lead to higher rents and if the cost of providing housing for their London workers increased significantly then I guess the corporations would start looking at moving their European bases elsewhere. Other cities (I think it might be Frankfurt and Paris) are desperate to lure such businesses away from London and become the new European financial capital. Do we really want to help them achieve this (and lose out on all the income tax paid on these executives' salaries)??

I think as a tax on unearned wealth (perhaps that what it should be called - I agree that the choice of 'Mansion tax' is deliberate) it's not awfully different in principle from being taxed on interest from savings, is it? Fair enough, lots of people may have bought their houses never intending to use them as investments. But that doesn't change the fact that a house is an asset like any other a person can hold and can change in value no matter what your intentions were. If it's wealth you've accumulated simply by a fluke of timing and location, then why shouldn't you be taxed on it?

On a 2.3 million pound house the annual tax would be 3000 pounds/year, am I right? I'm sorry but I just don't believe that a City professional like Vixsatis would really have such poor retirement planning such that 3000/year would be make or break for them re staying in the house. If you really are going to be living on such narrow margins in retirement then you must have a lifestyle like Liberace, crap pension or be living in a totally unsuitable house. My parents have way more to spare than 3000/year on their pension income and they were public sector teachers!

I don't think it is the politics of envy, Lady. Not at all.
I do think it is possibly very difficult to imagine £2million houses as normal family homes for those of us outside of the SE.

And where does it say that if you've worked bloody, bloody hard and happened to earn a lot if money you are morally obliged to trade down because other people have perhaps not been as lucky, or quite possibly not worked quite as hard as someone richer than they are?

^ This

Some of you seem to believe that if someone has done well for themselves whether through hard work or inheritance or whatever they should wear some sort of hair-shirt and sell it all and give everything to those who haven't. Ridiculous!
I do hope those who have suggested that Vix sell up and be just like you are going to take any profit you've made on your house since you bought it and give it to the homeless or those less fortunate, otherwise you'd be hypocrites!
Or possibly if things aren't as wonderful for you, why don't you get another job or retrain? I expect it isn't the done thing to suggest that but yet it seems to be acceptable for you to suggest anyone who has done well should almost be ashamed of it. Anyone of this level of success has paid their share into the system and probably doesn't even use most of the services (NHS, State schools) but that seems to get conveniently overlooked by the jealousy on here.

musieb my musings were nothing to do with tax, who makes a bigger contribution to the country or who pays most tax - it was to a woman who states her job is "ghastly" and her hours long. As I said her post made me feel sad.

I believe each working person contributes to the country as a whole - without public sector workers the people would suffer, without private sector workers the public sector would not be funded ... Vix does seem to quibble that her taxes pay for public sector workers, but we are as much of a necessity as the private sector. There is too much division and antagonism between the two sectors. There will always be people who want to live their life in London, and those that want to live in the middle of nowhere - again it is personal choice, but I don't understand why someone would chose a lifestyle that makes them appear unhappy!

SirRaymond I don't think many of us that have commented to Vix are in the slightest bit jealous of her "ghastly job" and lack of family time.

You keep commenting on her 'ghastly' job but I can't seem to find the bit in her post about where she wants to live your life Purple. Oh that's right, she never did

As I said many times before though, if private sector companies are unable to keep their workforce in London because of the tax and increasing house prices then they will move.
The north could do with some job creation and a few companies moving up here. Bingo, bring it on.

Actually, Vix says "the benefit of doing these ghastly jobs" herself, Sir.

Also who would the people in the 2 million pound houses sell them to in order to facilitate moving into a less expensive house? The number of people who can afford 2 million quid is very very tiny so you could have a number of forced sales and prices would fall and less tax would be realised etc.

Mansion tax or not, the estate agents and vendors of the properties linked on here via rightmove etc. will be getting very puzzled by the number of hits!

But lots of people work very hard and have to pay 40% tax on their earned income but they can't afford to buy a house because house prices are so much more expensive than they were for the older generation. Why should the younger generation and even those on middle incomes have to pay more tax and conversely pay more for a property and more tax (stamp duty) on it just because they have been priced out of the property market because of the randomness of when they were born?

Perhaps Vix thinks she works harder than her cleaner or her au pair, but presumably they also work long hours for much less pay and are unable to rent in her part of London, let alone buy and will not have a £2.4 million house to trade down for a comfortable pension.

Also, the younger generation will also be paying tax all their lives and well beyond the current pension age. The younger generation already have a much higher tax burden for much less in return.

Ophelia
Two wrongs don't make a right.

Well, given that it was the brainchild of Vince Cable - the man who claims he isn't a Tory but votes with them 99% of the time - it is unlikely to materialise. Unless the next coalition is Lib-Lab and Ed is still in charge.

shudders at thought of Prime Minister Miliband even though Cameron makes my skin crawl

'It is a very hard conversation to have as modern culture dictates that it is acceptable to be incredibly derisive about those richer than us just because they are richer than us.'

I feel the same, but substituting the word 'poorer' for 'richer' in your sentence, because those are whom nearly all the government's policies have targeted.

Raymond, you clearly do not understand what I have been saying. Vix, throughout her post, bemoans the life she leads. I made the point that I changed my life as I was unhappy and that her post made me sad. Never once did I say she had to live my life. If you are going to shout at me in bold at least get your facts right!

I just feel sad that she is unhappy. Sorry if that upsets you

Fairphylis two things on the unearned wealth argument and comparison to interest on savings-

• until you sell it, you don't actually earn anything on gains in your house's value

• I would argue that most people, when they sell their house, buy a more expensive one - and pay the commensurate stamp duty on it (which already is banded higher and higher according to value)

• everyone pays tax on savings income, at the same rate, it is equitable. This is my argument with the mansion tax, it is not equitable at all, it just penalises only the section of people in a position to buy/own crazily expensive houses rather than using their money differently - there are plenty of people with equal/greater wealth who don't want/need to who will pay nothing - I don't see how that can be justified.

I take your point expatinscotland and I don't disagree that the current government have made some awful welfare decisions that penalise the most vulnerable members of society. It is shameful.

However, that was not the point I was trying to make.
Just as I think using terms like 'chav' or 'pleb' is cruel and horribly condescending about the poor (another word that just sounds so patronising as well) I don't think it's acceptable to label the rich as greedy or undeserving or corrupt. But we are never allowed to say that, possibly because only a tiny percentage of the population are properly rich, and it's fine to punch 'up' but never, never down. I suspect that while many people are aghast that anybody ever votes Tory at all, their voting populace is made up of the aspirational, silent middle class and the rich who affect a daily approach of Noblesse Oblige and then make their feelings known in the ballot box.

We must, must stop peddling this nonsense that there is nobility in poverty however. It stops people thinking that it's okay to want to be rich, to work hard and be prosperous. Money is an amazing tool if wielded with responsibility and consideration for others.

PurpleGirly you sound lovely! I do know your post wasn't about tax and who pays for what, and you are clearly a very empathic person, feeling sorry for Vix having found herself in the position she does and not being so blinded by her wealth that you couldn't see her unhappiness with her life.

My life isn't unlike Vix's, but for various reasons I don't want to go into for fear of outing myself, it would be very difficult for me to turn my back on my job and flee to the country (much as I'd love to). It would be seen as dishonourable by several people I'm close to and could lead to the closure of the business I work for with serious consequences for many. So I'm just counting the years to retirement (and paying lots of tax in the meantime!)

FairPhyllis you calculate that the mansion tax on Vix's property would be £3,000 pa and speak disparagingly of her retirement planning in not being able to afford this..

But the fact is that London property prices will probably continue to rise at a considerable rate and that the threshold for the tax, £2m, will stay static. The rate may well increase from 1%. So its very likely that by the time Vix retires the annual liability will be considerably greater.

Adding to muse's post
...... 3K a year would be after the tax she will pay on her pension so more likely 5k of her gross pension.

putting 'vast amounts' of money into the economy seems to have given certain people a false sense of value

anyone on PAYE pays the correct amount of % in tax (imo) my husband pays higher rate
we don't get child benefit
blah blah sobbing blah

I am still not poor and I am still not weeping about having to look after and pay mansion my 2 million house either like most people

I think everyone, maybe? can agree that house prices, rental prices, the inflated cost of living is screwing most people over. I really think they should not have cut the top % of tax though (hides from X) because I think it feeds this kind of mansion tax talk...anyway

No one should go through the majority of their working lives having to plan for a massive tax bill in their retirement.

I can't understand how some of you can't see how fundamentally wrong that is.

Tax people's incomes, purchases, unearned money, inherited wealth. But FFS, you'd think that if you've worked hard enough both academically and physically in your life that you have managed to buy your own home and save enough for your retirement and you are as self sufficient as its possible to be, that you would at least be allowed to keep your own property when you've already paid tax on it.

Agree with you 100% Owllady. No child benefit for us either, just a small rented house that we could only dream of buying. Oh, to own a £2 million house