Anyone else in the South East worried about Andy Burnham bringing in a land tax?

[Beachbooks]

With it looking likely that Andy Burnhan will be the next PM, I was interested to see if anyone else in London / the south east were worried about potential tax raises specifically around the land tax rather than stamp duty ?

A lot of my friends who live locally are worrying that he will make the land tax for the South East so high in proportion to other areas of the UK that it will be financially very difficult to afford but then also extremely difficult to sell!!

BTW we have very standard house and garden but we live in an expensive area

I think we have established that some people don't want fair or proportionate. They just want to stick it people who, in their opinion, have their "already taxed" income tied up in the wrong format or simply have a bigger or more expensive house. If that house is in London or the South East all the better, those anywhere else in the country who meet the same criteria are also acceptable collateral damage.

Of course, homes will still be bought and sold. People move for all sorts of reasons, whether it's divorce, a new job, retirement or some other change in their circumstances.

If more people are competing for the same limited number of homes, I don't see how that improves affordability. Some people will still buy because they have no choice, but they'll often end up paying more.

Seem like basic Supply and Demand to me, but what do I know.

How does making one part of the housing market less attractive cause the whole market to deflate?

Yes, the first thing that homeowners, especially families, will do is move in a stranger or turn their home into a holiday let...

Of course they all live in the right locations, have spare rooms and/or a mortgage which allows it?

Love to know where you live and who you know.

The Irish citizenry did not gain a great deal from the roar of the Celtic tiger. As a percentage of GDP, tax revenues fell. The cost of living rose so that RoI became and remains one of the highest CoL countries in the EU. It has one of the worst housing shortages, too. There are loads of stealth taxes.

In fact there are many similarities to the UK.

They’re doing pretty well with a big surplus. Why would that happen if you’re sure tax reduction can’t equal increase in tax receipts?

Do UK universities skip over supply side economics these days, including Nobel Prize winner Mundell? Do they instead teach only one view, the left?

I can see why we get pockets of no understanding of behaviour in politics.

Oh, please tell us the main points I am missing. I said I don’t have the stomach to explain the nonsense that led to Reagan’s first recession. It is readily searchable, and I am happy to deal with the (lack of) maths behind it, if there are questions on that.

Of course serious economists hold different viewpoints and debate vigorously. There are just a few things virtually none of them support. Two of these are tariffs and the Laffer Curve.

As to your other point, I do not recall being asked personally and I thought it self evident: the cornerstone of civilised society is contributing in a fair and transparent manner as we are reasonably able. In a capitalist society, the values of our houses are the best indicators of their desirability. In this sense LVT is both fair and transparent. It is also hard to dodge.

If one lives in London but isn’t taking advantage of what makes it so desirable and therefore expensive, one can consider moving. I’ve already advocated at least twice, above, for a long lead in time so everyone prepares and the elderly are not displaced, and for arrangements for the vulnerable. Otherwise, as people elsewhere do, one learns to commute or budget. The rewards of better services are a delightful payoff the British have completely lost sight of, BTW.

I completely agree with you about the need for growth. Although everything is messed up now, the US has managed long stretches of excellent growth in parallel with much higher LVTs than anything being considered here.

So you mean
Only certain deserving people are allowed certain properties

Is there a point at which how much someone more deserving becomes less deserving or can this category be averaged out over a lifetime

ie if you pay more tax when you are working it’s ok to stay living in your chosen home when you are old and maybe paying less. Or if you are maybe paying less you aren’t deserving enough so have to move out irrespective of previous tax payments

Your idea of the deserving and not so
May I say
Is nasty

Ps
Your comment
it’s this group ( with high value homes ) that underpay their taxes

Have you ever thought for one minute that this group
may have given up a lot to buy their homes
no holidays ( spending tax money abroad)
no wardrobe budgets
no meals/ drinks/ out etc
Constant saving and constant diy.
You
Have no idea how people come to live in high value homes

You
Have no idea how much tax they pay over their lifetimes

And
Lack of knowledge and understanding is exactly why there are policies like this and the countries gone to the dogs

Why focus on the Laffer curve? There are other NP winning economists available. Those that highlight tax reduction and increase in tax receipts.

And whose theory pretty much aligns with ROI in practise.

I do not know much about the content of Economics curricula. Usually I can give the underlying maths a go, because my PhD is in a very maths heavy branch of STEM.

Google informs me that you are probably using an informal term for the Mundell-Fleming Model, which seems to concern the relationship between exchange rates, monetary policy snd movement of capital. It is not clear where tax policy fits in.

I am not the one who brought it up. I am focused because I have been told I misunderstand it, which I will not believe until a coherent explanation follows.

Hopefully it is taught then, not just the model but Mundell’s theory overall, as otherwise left leaning lecturers are leaving a pretty big blank and creating low understanding of how taxes impact behaviour.

I do love the sweeping positive outlook though

You're right. My mistake.

I could have written "the Laffer Curve, or any other economic concept that recognises taxation influences behaviour."

Happy now?

This is a discussion forum, not a peer reviewed journal. Most people engage with the substance of a point rather than fixating on a single label. Pedantry often says more about the person avoiding the argument than the argument they're challenging...

You are still not engaging substantively.

I’m not sure what the issue is for you with the pp’s posts but there are schools of economic thought.

ROI is close to what Mundell talks about and he’s not laughable in any way. It’s a real world example which goes against your earlier posts.

RoI has one of the worst housing crises in the western world. Also a growing wealth divide. Your opinion is controversial.

RoI has one of the worst housing crises in the western world. Also a growing wealth divide. Your opinion is controversial.

You said you can’t raise tax receipts from tax reduction. I gave you theory and practise that shows you’re blanking on a large part of information.

What a bizarre response!

What on earth do you mean by “deserving”? This is about tax… and is the flawed principle of the policy that people living in more expensive homes don’t pay enough tax relative to less expensive homes.

It’s pretty clear that many of those more expensive households pay vastly more in taxes than cheaper homes on a relative basis through other taxation… and many don’t.

Treating them all as one group totally undermines the policy rationale. And just because anyone paid tax in the past, it doesn’t absolve you from paying tax, or paying more or less tax, in the present… depending upon economic need at the time. I don’t really care how people buy their homes. The question here is whether or not people in bigger homes pay too little tax relative to others or not.

Some do and some don’t. The ones who do shouldn’t be treated the same as the ones who don’t.

I strongly supsect that their objective is to derail the thread.

Anyhoo...

Moving on from the curve "who shall not be named" by "serious" and "all" economists...

Your argument is that it's fair because the property is desirable and the tax is hard to avoid.

Really? Those are your acid tests for fairness? We're talking about an annual tax that can rise year after year on an unrealised gain.

So, after all that blustering about "serious economists", mathematics and your PhD, that's really the best you've got? That people should pay an ever-increasing annual tax on an unrealised gain because they happen to live in an area society considers desirable and because it's easy to collect?

And apparently, if that causes financial hardship, so people have to move or take on debt, that's just acceptable collateral damage?

There was me thinking this was supposed to be a wealth tax based on fairness.

You pedantically picked apart my words whilst questioning my intellectual capability, and that of others. And they say a good education is never wasted...

"it's a desirable area" and "it's easy to collect."

It is fair, how else is it done in eg Silicone Valley or Central Zurich. Highly productive places full of rich workers do pay high annual property taxes. Those who cannot afford it in high employment areas need to move out or they hold the economy back. I agree there needs to be some social housing there and exemptions for keyworkers but that is about it. Old and rich who do not want to pay can leave.
Personally, am happy to leave an expensive area when no longer in full time work and leave it behind for the next generation. The internationals who hogged Central London property can also pay or leave.

No way just let people build communities and networks. No need to make a great city like London that inaccessible and only for the very rich.

Even if you have elderly relatives nearby?