Vince Cable yesterday hinting at lowering of higher rate tax and introducing mansion tax

[wordfactory]

Don't know if you heard him yesterday. He said he wasn't 'wedded' to the 50% tax band and hinted that it wasn't really doing its job as an income stream, that a mansion tax might make a good sub.

Is this what we're expecting from George then?

Can't see it myself. The whole local taxation, council tax thing needs reviewing because the upper band includes too wide a range of properties. But dispensing with the 50% band, much as they'd like to, will generate so many 'tory toffs look after their own' type headlines, I think it'll stick around for a little longer.

By the looks of it the mansion tax won't happen, axing 50p Rate will probably happen and it looks like they will go for axing pension relief instead?

Axing 50p tax rate Should probably happen not will probably happen!

The 50p tax rate was a political masterstroke by Gordon Brown. By knowingly introducing an inefficient, spiteful tax which costs more to collect than it raises and actively harms the economy, Brown left a delightful shit sandwich for the Tories to chow down on. Of course, the sensible thing to do would be to abolish it, but to a government serially denigrated by the hard of thinking as "nothing but a bunch of over-privileged toffs", the Tories would leave themselves wide open to attack.

If there is any doubt that this was a political move first and foremost, why, after 13 years in power, did Labour not introduce this policy until less than a fortnight before parliament was dissolved for the 2010 election? Typical Labour, they always put party before country.

Agree with MrPants. The mansion tax is horribly unfair as many people on low incomes live in expensive houses, for many reasons. They would not be able to afford the tax.

the logic behind the MT is wrong - increasing the value of the house you live in is not a net gain until you sell ...at which point other forms of taxation kick in (IHT, CGT, SDLT) as per circumstance.

i agree council tax banding is unfair....it means the most you can pay in my area is about £2400 where even living in a one-bed flat you pay £1000pa..

most taxation is unfair, to be fair.

MrPants Vince Cable pretty much said what you said. The 50p tax is not bringing in the income needed. I think he used the words 'inefficient' ie useless.
But he also conceded it was a hot potato.

I'm not sure that the Mansion Tax is inherently unfair. Those conditions which brought about the financial crisis which has resulted in the need for these drastic spending cuts/tax increases are precisely those conditions which have made houses in certain areas massively valuable. It seems entirely fair that those that have benefited most from huge increases in the value of their assets should be contributing to the clean up.

However, it probably isn't very practicable. A land tax would be a much better idea, as well as closing the particularly outrageous loophole by which individuals avoid tax by buying very expensive properties using offshore companies.

Those who "have benefited most from huge increases in the value of their assets" are those who have already realised them. If you are still living in the house, you have seen no benefit whatsoever, and there is no link between owning a particular asset and having enough income to afford a new (and large) tax on it.

Agree with McPants about the dubious motives of Labour introducing this tax in the dying weeks of their administration.

There are many other threads on MN suggesting that people live according to their means, that they have no 'right' to live in a certain place just because that's where their support networks are. So if the people living in these mansions can't afford to tax them, what sort of excuse is that? Or is it only the poorer classes who are expected to 'cut their cloth according to their means'? If you own a particular asset (large house) but have no income to pay increased tax on it, you would have so many options open to you: move (frequent suggestion on MN when people say they can't find work), rent a room out, convert said large property and sell half/live in half.

Mydoghasfleas has made a very good point about how many properties are now bought by offshore companies.

It would make a lot more sense to try and go after the sdlt abuses (incl purchase by offshore company). The mt is not just unfair but hard to implement for reasons others have said.

Isn't there meant to be a report due on what the 50% actually raises?

@woollyideas. It's not the morality of the wealthy paying more, it's the practicalities. A defecit-reducing Mansion Tax going into central government coffers of a percentage of the value of a property over a particular threshold - I've heard £2million - would be difficult/expensive to administer centrally. It would be better/cheaper administered locally the way the Council Tax is handled. This would result in a bigger revaluation exercise that would probably affect every single council-tax payer. Then, if it is administered locally, councils would understandably demand that they got the benefit of extra payments. And then it wouldn't have the slightest impact on reducing the deficit.