Mansion Tax at £1.5m - what will this mean?

[MaureenOHara]

Does anyone have any idea what this might mean for an individual and what it might do to the market. What happened to the £2m market and will that be replicated or is it different?

I too am a floating voter and while I agree that a GE now would be a disaster I have also seen no evidence that the next 3 years aren’t going to be a disaster!

the political mess we are in isn’t unique to the UK - they are having challenges in Germany and France too. But we have an idiotic Foreign Secretary and a Chancellor who is out of his depth and PM who thinks sound bites are enough

They may not be living in hell holes but 1 million does not get you a lot of space. Also, the people who have purchased these homes with their high income jobs work hard. Yes, those with lower salaries work hard too. London salaries are high compared to salaries in other part of UK but the compared to rest of the world they are low while cost of living and taxes are high.
When you put so many taxes on these salaries employees, they look opportunities elsewhere.

Why can’t UK governments ever prioritise economic growth?

Why can’t UK governments ever prioritise economic growth?

As @LifeOnEnceladus said for that you need to start prioritising the young over the old which isn’t popular.

We are talking about houses worth over £1.5 million. That extra half a million counts.

Honestly, I'm not sure. It's difficult because I don't think you can tackle pensions in isolation. It has to be part of a system-wide improvement that looks at pensions, taxes, incentives to work and save, social care, healthcare, housing, education and economic growth together. Otherwise, you fix one problem and create another elsewhere.

Pensions and the cost of elderly care are huge and pressing issues, but I think the real question isn't simply “how do we fix pensions?” It's “where do we start fixing everything around them so that a sustainable system, which doesn't cause major problems elsewhere, actually becomes possible?”

No we don't.

The economic mess in the UK is disproportionate to the difficulties in most comparable countries primarily because of the knock on effects of this particular issue (it is exacerbated by, not being caused by, geopolitical issues as our politicians would like to claim) and the decline in UK living standards will continue for as long as such a significant proportion of the electorate refuse to acknowledge this despite it being an evidenced, indisputable fact, and our politicians continue to be so spineless and self-serving that they won’t even discuss the issue let alone take the necessary steps to rectify it. It is a very sad state of affairs indeed but ultimately all of the other ridiculous nonsense politicians misdirect public attention to are nothing more than distractions from this economic reality which is plain to see in a cursory look at our economic data and public spending. It is a great shame that there isn’t a single political party prepared even to acknowledge this and consequently no prospect of an reverse to the doom loop in the foreseeable future.

Ok. Why don’t you put forward a coherent economic plan to dig us out of the current mess then, which you assert can be done without acknowledging this enormous, grey animal with giant ears and a trunk.

Which elephant are you talking about? Oh sorry, I remember now you don't answer questions.

Pot, kettle...

So a couple in high income, high stress jobs live in Notting Hill in a fairly large flat which is valued at 1.5 million. They live in the flat comfortably but some luxury but they have only one property.

Now someone lives in countryside in a large house worth 1million or little less, but also owns multiple properties in London which they rent out. Each London property is under 1million.

But mansion tax here is applied to first scenario, not the second one.

I have answered numerous questions on this thread with quite a lot of detail.

The elephant in question is the state pension welfare which is currently nearly £150bn per year and growing exponentially, £80bn of which is going to households who have no need of it whatsoever because their incomes without it are higher than that of those earning the average UK salary. £80bn per year of completely unnecessary welfare payments when we cannot afford decent infrastructure, energy generation, water security, defence or education. Only 13% of pensioners live on the state pension/ other welfare alone so this is an enormous waste of money not present in any other area of public spending which has been cut to the bone and beyond for many years now. As I said, over 50% of total public spending goes on the over 65s yet they are less than 15% of the UK population, and they have paid as a cohort nowhere near sufficient lifetime tax receipts to fund this largesse (a shortfall of approximately £200k per person in real terms).

That elephant.

Please explain your economic plan to fix the UK economy and create growth and prosperity without addressing this problem, since you claim it’s unnecessary to do so.

I was responding to a poster making a comment on those who live in £1 million homes in London.

Tumbleweed….!

Please explain your economic plan to fix the UK economy and create growth and prosperity without addressing this problem, since you claim it’s unnecessary to do so.

Oh great, we are at the making shit up stage. Predictable.

I agree that this needs to happen because we need far better people in politics and nobody with the capability to do a good job of it would touch the job with a bargepole given the harassment and pathetic salary compared to what suitably qualified people will be earning in permanent jobs in the private sector/ business.

We should cut the number of MPs to 1/3 and triple the salary, that would be a good start.

But it’s also the political system itself which is a major problem which is a barrier to long-term decision making in the interests of the country. Our system actively encourages politicians to make short-term decisions.

If you look at how areas of the economy which require long-term, stable decision-making are made in countries like Singapore - where this is deliberately placed in the hands of experts (e.g. Independent panels of engineers and economists etc when it comes to infrastructure planning, based on long-term projections of population and resulting requirements over periods of decades not 5 year electoral cycles, and budgets for this are split off separately so that politicians can’t appropriate them for short-term electoral advantage through tax cuts/ funding pet projects/ ideologies) then you will see, for example, why Singapore as a country with no natural source of water is now totally self-sufficient in water supplies. The UK has many rivers and is surrounded by coastline and has a temperate climate yet has water shortages. That is a good example of the scale of the problem caused by the total dysfunction of our political system which actively discourages appropriate long-term decisions and investment to be made.

It’s also why we have the most expensive electricity in the world, it’s why we have crumbling road and rail networks, it’s why our internet coverage is laughable compared to much poorer countries, it’s why our pensions systems are ponzi schemes, it’s why defence spending has been catasatrophically wasteful and mismanaged and underfunded, it’s why UK schools are such appalling environments for children and don’t lead to a significant proportion of young adults leaving education with useful skills and employability, it’s why our health service is a standing joke in other countries when they discuss the UK: it’s why every single area of UK public service is a complete mess.

Looking closer to home in Europe, there are functioning democratic systems that can mitigate some of the worst impact that politicians have on the UK economy and public services, for example the system of Cantons operated in Switzerland. Unfortunately I don’t think their system of more direct democracy through referenda on many issues would work here though, because of our poorly educated electorate and the myopic selfishness than underpins the voting of such a significant proportion of the electorate, whereas the Swiss have a strong sense of community and social responsibility.

But yes, you’re absolutely right that the old adage is true: pay peanuts, get monkeys.

But sadly paying salaries that might make compentent people consider a role in politics won’t be enough on its own, the entire UK political system needs a vast overhaul to make it even vaguely functional in terms of it serving citizens’ best interests rather than the self-interest of politicians. At the moment it attracts precisely the type of person who should never be allowed to become an MP, and wouldn’t stand much of a chance of being voted in if there were competent people prepared to stand.

Making shit up?

This is a discussion about economics and the effects of economic policy on the tax system. I suggested a coherent economic plan to start improving UK living standards. You disparaged it. So presumably you have some ideas of your own about a coherent set of policies which we can afford which will generate economic growth?

You're edging towards a wealth tax.

For the moment, we'll be lucky to chip away at some of the injustices in the Council Tax system.

@LifeOnEnceladus

"We should cut the number of MPs to 1/3 and triple the salary, that would be a good start."

I take the contrary view, that, since we are notionally living in a Free Market capitalist society, and since demand for seats in Parliament greatly exceeds supply, we should consider reducing pay, or making working conditions more onerous, until supply and demand are in balance.

Removing the right of MPs to treat it as a part-time job, and amass huge earnings from side hustles, by forfeiting all such earnings to the public purse, would go some way in weeding out the freeloaders who are only out for themselves.

You’d be able to get self-interested, ignorant, power-hungry, narcissistic busy bodies with zero skills and lacking the intellect, ability or motivation to qualify for/ obtain the skills for running even a small team in any industry let alone an entire sector of the economy to become MPs for minimum wage, I’m sure. You could probably recruit a bunch of people even more incompetent than the current lot, with similar levels of skills to TikTok “influencers” (as it appears that our current PM aspires to be). So yay! Why don’t we do that any pay them the same as supermarket checkout staff? That’ll save us a few million, and never mind the cost of having incompetent politicians, which is tens of billions of pounds per year.

The supply issue here isn’t one of insufficient numbers of people who are willing to accept the role, rather an issue of insufficient numbers of people who are both willing and capable of performing the role to an acceptable standard, who won’t be a national embarrassment and - more importantly - perpetuate and actually accelerate the ever-declining living standards and public services levels for the UK population. It’s an evident fact that the supply of those people - the ones that we all desperately need to be willing to accept the role - is close to zero at current levels of pay.

However, if you’re content with the country being run by self-serving, clueless idiots despite the well-evidenced results of that then sure, there’s no need to pay the kind of salaries that other countries with functioning governments pay their elected representatives and might make some people who are sufficiently intelligent, competent and experienced to perform the role competently even consider the idea without bursting into hysterical laughter and assuming you are joking.

I can’t believe the how silly that suggestion was. Salaries are determined by what it is necessary to pay someone who is actually capable of doing a job competently. You can offer the roles of being your accountant, lawyer or doctor to somebody with none of the relevant skills to be able to actually do it competently for half or less of the money people who do have those skills actually earn, if you like. But then you’ll have to accept the consequences of that when they turn out to be utterly incapable of doing the job and that costs you far more financially or in various other ways (!) than it would have cost to pay somebody suitable to do the job in the first place. The same applies to politicians.

It has reached that level of farce now, hasn’t it?

“Had enough of experts!”

Yes, that clanger continues to ricochet throughout our political system and pretty much sums up the whole problem, doesn’t it? That had to be the moment we hit “peak moron”, when it was clear that the UK was doomed.

If the UK population had only had the sense to actually listen to experts then the entire population would be significantly better off than it is, but the electorate seems determined that it is preferable to be governed by people who are the opposite of experts, i.e. idiots who have no expertise and no idea what they’re talking about!

And now the same electorate seems to be confused and angry that things aren’t going very well…

🤔😆

We get all those people already.

Hence the need to pay salaries commensurate with the calibre of people we actually need to do the job properly…

Are you under the impression that only competent people are attracted by high pay?

What tests of competence did Farage, Truss and Johnson pass before being allowed to sit in Parliament?

None. And none of them were competent. Have you not understood my posts? We’ve had incompetent idiots for decades because the few people who are highly skilled and capable enough to be a competent MP and are publicly minded enough that they might consider taking on all of the hassle that entails and give up higher paying roles for the mere prospect of a temporary role are not going to do so for the insulting salary of less than £100k. It’d be a push to get many to do so for £300k but there might at least be a few who would consider it at that level (which could be fiscally neutral by cutting the number of MPs to 1/3. We have far more than is normal or necessary for a country of this size, and quality is far preferable to quantity).

You will not get sufficiently experienced and skilled people capable of doing a good job of it for the salaries paid now. What you get at this level of pay in the main is broadly divided into two categories (with a tiny number of exceptions): 1) narcissitic underperformers who like the sound of their own voices and are lacking a combination of any discernable skills, knowledge, intellectual ability or experience to enable them to perform the role competently. This type of MP would likely be earning not much above minumum wage in any role in industry and struggle to run a bath let alone a department of state, and they appear to think they have won the lottery jackpot by getting elected as an MP on the meagre salary it pays for the responsibility it (should) entail; and 2) rich people who have no need to earn a decent salary and see politics as a stepping stone to raise their personal profile/ “make a name for themselves” so that they can jump ship afterwards to more lucrative private sector roles/ directorships etc that they’d never have been able to obtain in any other manner based on skills or experience, who see the whole thing as a political game.

Neither of these groups of people are the people we need to govern the UK because neither has any interest in public service or governing the country in the long-term interests of UK citizens, or the capability to do so. To get those people - the competent and much-malgined experts who we need to do these roles for everyone’s sake - to even consider doing it we need to pay far more.

At the moment the kind of people we need to do these roles won’t even consider doing so, on the whole. Compare the calibre of our MPs and their CVs and skills to those in other European countries! Look at their cabinet ministers and ours and their backgrounds and qualifications and expertise. Look at the idiots we sent as MEPs before Brexit and those sent from other countries. Then you might start to get the picture.

Why have you brought up Truss, Johnson etc? Do you think these complete idiots were any better than Burnham, Rayner etc? Farage?!? We have had nothing but clowns and imbeciles for decades now and that won’t change if we keep paying peanuts for the role.

Obviously the power-hungry, narcissistic morons will continue to be keen to take the role if we pay sensible salaries for the level of responsibility but one would HOPE that given the choice between some actually capable and competent people who might be prepared to stand for at least semi-decent compensation and electing yet more narcissists, idiots and reprobates we might at least end up with enough competent politicans to see some improvement in governance. It wouldn’t be a guarantee that the UK electorate wouldn’t continue to elect morons but they might, at least, have some non-morons to choose from whereas currently when sensible, rational people look at the options they often feel that there is nobody to vote for at all.