Is that what I think it is?

There was I, all set to wind down from the keyboard, when this inspirational news descends from politicshome:

The Independent says that Nick Clegg plans a new tax on homes worth over £1m in order to fund raising the basic starting-point for income tax.

It’s a wealth tax! A redistribution of taxation burden on to static capital accumulations and away from economically productive activity! Has anyone told Jock?

Woohoo! If the party adopts this, I’ll even overlook all that airbrushing nonsense…

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  • That’d be Politicshome not

  • It is hard to imagine that it would raise enough to make much of a dent in income tax rates…

  • Herbert Brown 20th Sep '09 - 11:47pm

    I thought raising income tax allowances was going to replace cutting the basic rate, and that all this was supposed to be already funded by other measures that were proposed years ago under Ming Campbell.

    But maybe I’m being a bit stupid in trying to keep track of all these twists and turns in Lib Dem economic policy. Perhaps I should just set the alarm clock for next June and see where the party has ended up by then.

  • That’s at least another 10 Lib Dems seats lost to the Tories and any Lib Dem seat in the south highly vunerable.
    And all this before we get Clegg’s main speech,he’s playing an absolute blinder.

  • Bruce Wilson 21st Sep '09 - 1:25am

    And this together with ‘savage cuts’. An object lesson in how to irritate all parts of the party. It probably means that the state of the public finances are dire. Perhaps worse than we know. Anyone been following the currency markets? I wonder what the political landscape will be like in June. Exciting times. Unfortunately.
    PS. I am not a savage.

  • A great idea but has it been through our democratic policy making process?

  • David Blake 21st Sep '09 - 8:26am

    I’ve always believed that consistency is a virtue and hope that my party believes that too. Unfortunately the twists and turns in our economic policy make me wonder where our philosophy has gone. It seems that we are making bold statements just so that we get in the news. We seem to be wanting to irritate vast chunks of the electorate in the run-up to a general election, which hardly seems wise. We all know how the other parties will twist whatever we say. I watch the conference on BBC Parliament and I wonder how everything hangs together. Or is it just the media?

  • Herbert Brown 21st Sep '09 - 9:06am

    On a closer look, this looks like yet another silly bit of spin. The Independent article says that this proposed property tax would raise £1.1bn a year, out of £17.1bn for the total package that Cable is going to propose today.

    The bulk of the money is to come from measures against corporate tax avoidance and changes to capital gains tax. It sounds as though this is essentially a re-jigging of the proposals that were originally going to fund the cut in the basic rate of income tax, with the green element now apparently dropped completely, and this headline-grabbing property tax – that only raises about 6% of the total – added as a garnish.

  • Herbert Brown 21st Sep '09 - 10:03am

    “The Independent article says that this proposed property tax would raise £1.1bn a year, out of £17.1bn for the total package that Cable is going to propose today”

    Not that the rest of the media are aware of these niceties, of course. Here’s how the Guardian is reporting the story, under a headline of “Lib Dems vow to raise £17bn with tax on £1m-plus homes”:
    The new tax on £1m-plus houses would be payable on an estimated 250,000 properties and raise more £17bn a year, the party said.

  • Andrew Duffield 21st Sep '09 - 3:21pm

    Why the arbitrary £1 million threshold? Are those in £999,999 properties not relatively well off and able to contribute too? And where’s the incentive to bring those 1 million empty (and largely untaxed!) homes back into residential use?

    All we have to do is extend our existing policy for SVR to non-commercial properties as well. Simple – and Liberal. With deferments for the ‘asset-rich /income-poor’, a mere 5% national LVT rate (on annual rental, not capital, value) would raise enough revenue to fund the abolition of tuition fees. Instead, we’re about to relegate yet another vote-winning policy to the ‘aspirational’ league of pledges.

    C’mon Nick and Vince; get a grip.

  • Matthew Huntbach 21st Sep '09 - 3:44pm

    Are those in £999,999 properties not relatively well off and able to contribute too?

    Well, those in £1,000,002 properties can probably afford more than the £1 a year they’ll be asked for under this proposal. It seems reasonable to me to start somewhere, that somewhere being quite a bit above what anyone could claim as needs.

    Now, let us hear the voices of the vested interests making a noise about this, and probably using their usual “middle England” line i.e. pretending that something which benefits those in the middle at the expense of those at the top is an attack on those in the middle. So – if they do, turn round and say to the REAL middle England – “OK, we’re doing this so we can pay for your kids’ university tuition fees, do you prefer higher income tax?”. And say to the kids “This shows that politics does count, we are doing this for your benefit, and we’re getting stick for it – if you go off and say ‘oh, I’m not voting, politicians are all the same’, well don’t blame us when you’re stuck with debts you could have voted against when you had the chance”.

    I’ve always supported LVT, but if there are cries of outrage over this, it will indicate just how hard it would be to sell that.

  • Hmm isn’t £17bn divided by the 250 000 homes quoted, something like £68 000 per property above £1m? I think the Guardian might have done a little bit of simple arithmetic before publishing such an obviously erroneous headline.

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