Caught in the net
[Re: A so-called mansion tax will not achieve fairness, yesterday]
Aside from the obvious problems in administering a “mansion tax”, it’s clear that it’s not solely super-rich buyers who’d bear the brunt of an annual property levy, but long-term homeowners who may not be cash-rich but simply live in areas where house prices have climbed rapidly. In Kensington & Chelsea, for instance, the average property valued at £2m would have been worth just £392,000 in 1995. In essence, it would constitute yet another tax burden on London, penalising long-term property ownership.
Peter Rollings, chief executive, Marsh & Parsons
Tax on Londoners
I would make your headline more explicit: the “mansion tax” will be unfair. I have lived in my home for twenty years, having bought it in a dilapidated condition and lovingly restored it. I still have a mortgage, I have paid my taxes and have not lived extravagantly, but always expected my estate would face more taxation via inheritance tax. I accept this as a good citizen, but this proposed tax would force me to sell my family home. I have never regarded my home as anything other than a home, not a piece of tradeable property. I fall into the category of the asset-rich/income-poor. Were I to be forced to sell up, only the income-rich could afford my home. Is it LibDem policy to force hard working people out of their homes and make the ownership of expensive homes exclusive to the super income-rich? I doubt this idea has been thought through, especially its implications for a small minority, who mainly live in London.
A fair tax is based on fair value. It’s 21 years since Vince Cable’s house was valued for council tax. A valuation for everyone today, reflecting the great changes in values, would probably result in higher overall tax for everyone in the southeast, and lower taxes for the rest of the country. Surely fair, even for Cable?
War on wealth
[Re: War on Britain's aspirational classes, Tuesday]
This article reflects how most of us feel. Furthermore, a potential property tax is deeply worrying for those fortunate enough to have benefited from the surge in south England house prices, myself included. We don’t necessarily have spare cash lying around. My wife and I work very long hours, pay outrageous levels of tax and have children at private school. What do we get in return? Criticism for being successful. How about a tax refund for not burdening the state education system, for example? Those that use the system more should pay more.
Seen it before
This article added clarity for me on the issues around the higher tax rate and cutting benefits to higher rate payers. Before I left South Africa, almost 15 years ago, I had been paying 40 per cent tax while working incredibly long hours and weekends. I felt robbed and it was a huge disincentive to making any effort, especially since I was in my twenties and missing out on time with friends and family. Sadly, it seems that the negative effects of globalisation and taxation are lessening the appeal of Britain as a country to live and work in. How does Britain now compare to Brazil, for example?
It’s worse than just high taxes. If you’re a divorced father of two and your ex decides to exercise her legal privilege to involve the child maintenance and enforcement commission, one’s tax rate jumps another 16 per cent on the first £800 per week gross earnings, and then further still. If the Tories have their way, the spread between what the father pays and the mother gets will widen. Anyone on a 50 per cent tax rate will in fact be paying much closer to 70 per cent. I am now completely priced out of the UK and am seriously considering whether to leave Britain for good.
Fleeing the nest
The people I feel the worst for are precisely the group of young aspirational professionals you outlined. They commute long distances, despite working 12+ hours a day, and tax increases in recent years have made central London unaffordable to them. This demographic will look abroad for work and the next generation of professionals in London will be hollowed out. I was undecided over whether the 50p tax rate would ultimately lead to mass movement away from London but my view is changing quickly. An increasing number of my peers move to other jurisdictions for lesser roles, simply because London is becoming too difficult. I’ve seen three young families move out of London in the last six months. As these families leave, their peers are more incentivised to leave also because they no longer have the same networks in the workplace or neighbourhood.
What a miserable place Britain is becoming. My tax rate is higher than you describe because we have a second home, pay private school fees and have private health care. It feels like I have no disposable income at all. There’s also a myth about child benefit. It was originally a tax allowance but was turned into a benefit so the poor would also get it. Now the rich are having it taken away. The nature of the debate is that people think the rich should pay more because they can afford it. It’s fuelled by a fairness agenda. The brightest will be heading either to the East or the US in the next few years.