Taxing problemsPosted: October 14, 2014 Filed under: Housing market, Tax 1 Comment
Could we invent a worse system of taxing housing than the one we have now?
As modest attempts at reform are made to howls of protest from those who stand to lose out, it’s worth standing back a moment to reflect on what we tax (and why) and what we don’t.
We have an annual tax on the value of all homes but the council tax in England and Scotland is based on property values as they were in 1991 with a top band of just £320,000. The owner or tenant of a modest semi in Wolverhampton can end up paying more than an oligarch with a multi-million pound home in Westminster. The system was designed to narrow the differences between the top and the bottom from the start but failure to uprate it in line with house prices has amplified the distortions.
-> Read the rest of this post on Inside Edge, my blog for Inside Housing
Property and land taxes are the most daft taxes on people, as the government taxes air we breathe.
Property is not wealth until it is sold and then you do not live in it, that is the prime reason to have a home.
Property is not income.
If you rent a house, that is income generated.
We do not need property taxes, as 75 per cent of tax from people to government comes from stealth indirect taxes and VAT, that all pay, in or out of work and however long we live.
Income Tax is not even a quarter of tax from people to government, as is on the decrease, as the bulk of the rise in employment is with the low waged employee or low income self employment that is below the basic tax allowance.
Flicking through the TV channels, I came across a debate in parliament a long while back, where there was talk of adding 1p to each litre of petrol and that money being used to fund councils.
Now that would be fairer, except that 60 per cent of the price of each litre of petrol is already tax and VAT. All we need do is share 50-50 petrol tax between London and councils direct.
This is do-able, if in England all councils became unitary (one council per county or city) and so a substantial cut in councillor numbers that cost so much in expenses, that has increased year on year.
But there is always someone worse off than us.
In Greece, there is no basic tax allowance, each Euro is taxed many times, and the property tax just levied for the first time is based on a pretend property value, when all property has zero value as no-one is buying homes.
You only see For Rent boards. And the rents have had to massively decrease, due to the forced reduction in wages whether in private or public sector jobs.
No-one is buying homes because of the multiple taxes on owning a house, a garden, a field, a trackless mountain tract filled with wild trees, a cellar, a storage shed.
Even a house without a roof, electricity, water and fallen into a ravine due to landslide. This after so many people were given a free field in the ancestral village so as to grow food as without money, as the welfare state has gone totally.
Or a pensioner at 80 with a decrepit old village house and a kitchen field, having suffered hundreds of Euros again and again off pensions from all sources, taken by Europe to pay off national debt, even when the pension fund was not state owned.
So we are no means the worse off in Europe.
I’d like to know what The Greens’ offer around Council Tax. We know they will get rid of Bedroom Tax.
Our government levy that on the poorest, when Devo Max offered to Scotland means the Scottish can get rid of it.