RAPID RESPONSES

Not a capital idea

[Re: Why a wealth tax is a very bad idea, yesterday] A mansion tax would require a whole new bureaucracy to value property and collect the tax – a very bad idea.

More generally, a wealth tax is bad because it destroys capital. Our collective wealth provides the seedcorn for new business investment, so that the economy continues to grow and generate the profits and taxes off which we all live. Taxation of wealth would encourage people to hide it, or just reduce the incentive to create it in the first place – all of which means less wealth available for productive investment.

Also, at present we do not routinely have to give the taxman an account of our wealth – this is only done when we die. A general wealth tax would give government yet another opportunity to snoop into people's private financial affairs – a further erosion of our liberty.

John Hill