Mansion tax? No it’s a maisonette tax
I could be ranting here, but the Liberal, and now Labour, proposals for a mansion tax simply don't add up.We’re told that property worth more than £2 million should be subject to an additional wealth charge to claw back some of the tax the rich are avoiding. It’s pointed out that half those property owners are the bankers and non-domiciles who created our financial problems in the first place and are compounding it now by actively avoiding their fair share of tax. Sounds fair enough, but what about the other half. Presumably these are people who worked hard and saved, didn't buy new cars or expensive holidays and invested prudently so they could afford their dream homes. Just the sort of people the Conservatives say we all should emulate. Why then are we going to introduce a tax that will penalize the prudent as well as the reckless with such a blunt weapon? Surely if the government wanted the to raise more from the rich they’d just increase the top tax rate, and if it’s only bankers and the like that are to be targeted then why not add a box on the tax return that asks if you’re a banker or non-domicile? A tick in this box means an automatic 10% increase in tax, and if the person didn't tick but works for Bank of Scotland on a million a year then there’s an automatic 20% fine. It really would be that easy.No, mansion tax is not a tax for the rich, history shows us instead it’s opening a new area of taxation we’ll all end up paying.I read an interesting article a week ago about how property prices increased 11% last year and will multiply many fold in the next decade. The supporters of mansion tax counter by saying the price at which it kick in will increase with inflation, but they said the same for stamp duty and 40% income tax rates, and of course no such thing happened. In fact on the basis of every single new tax ever introduced in the UK, history tells us mansion tax will lag inflation until it has moved from the minority to encompasses the majority. Call it a mansion tax to get it introduced, then creep it until we all pay.It’s actually quite interesting to think about why property will increase so much in the near future. Surely, you’d reason, there isn't enough cash around for normal houses to become so expensive? Where does all the extra money come from? Well it comes from the government. Since we dropped off the gold standard then every year they've printed a few billion extra pounds to help pay the salaries and pensions of the half million civil servants we have. It’s called a FIAT monetary system and is, of course, simply creating cash out of thin air. Don’t confused this with the car maker though as Fiat cars are a lot more reliable than FIAT money; another lesson from history. This newly printed money quickly makes its way through the civil servants pockets and into the general economy where it causes the inflation we all live with. More pounds in circulation without any more apples simply means each apple costs more. Quantitative Easing, where the government prints hundreds of billions to bail out the banks in turn leads to much quicker and higher inflation. The banks are neatly focusing and multiplying this QE money into property through their Fraction Reserve system and a tendency to only lend on solid investments. This is why we've had, and will continue to see, massive house price inflation. It’s annoying that official inflation figures don’t include house prices, because if they did we’d all feel a lot more worried about the creeping inflation rate.We’re led to believe that house inflation is a good thing. We must all be getting richer because our houses are worth more and more. I don’t want to call this a bubble, but the reality is that when all property prices are increasing and none are going down, then the market is inflating just like a bubble. And why should it be so good that something costs more this year than it did last year? With increased manufacturing, farming and building efficiency, products should actually cost us less and less each year? The whole purpose of an industrial society is to raise everyone's standard of living by creating more purchasing power year on year.Imagine we lived in a world where the government didn't print billion of extra pounds a year, a world without inflation, or better still a world with deflation. In this type of world my pension could simply be money I put away today that I know will buy better things in the future. I wouldn't need to invest it, and in so doing pay fee’s and management charges and take risks. Instead I could just put it in a tin box under my bed safe in the knowledge that a pound tomorrow would buy more than a pound today. We’d all be far better off in a world without FIAT money, Quantitative Easing and Fractional Reserve banking. Instead though we live in a world where the government, banking and finance sectors are no longer working for the good of the people. They weigh ever heavily on our shoulders, have eaten their pound of flesh and now want a direct feed of the blood from our bodies.‘Mansion’ tax?, no it’s not a mansion tax. We’ll all be paying as it transitions into a ‘maisonette’ tax.And for those with real mansions then avoiding this tax is simplicity in itself. Convert the top floor of your average London town house into a self contained and separate flat for the nanny, and rename the basement cinema as a storage cellar. Try doing that with a family of 5 in a two bedroom maisonette.
Lorne Gifford ● 4441d8 Comments ● 4441d