We always used to measure and tax imputed rent- Schedule A Income Tax. I don't see the problem with doing it again. It's a financial stream that the taxpayer elects to enjoy personally in kind, rather than as income. There is nothing special about income anyway- we can get around a lot of rules on income tax by calling things capital gains, or dividends etc.
You've not misunderstood- everyone has to live according to their means. For a very small number of people, a Land Tax might be affordable without lifestyle changes- just like my lifestyle is massively lower with Income Tax than it otherwise would be. The point I am making, is that if you own the property, you always are able to pay the tax- you don't have to lift a finger, you don't have to sell anything- you just rent it out. Yes, your lifestyle may change, and for the majority this will change hugely for the better. Who should tighten their belt more? Someone who has enjoyed huge tax free windfall gains in property, many happy years of subsidised living in the best parts of the country, or a worker who has most of their wages confiscated each month as tax and rent?
But it only produces no income because you might choose to consume the benefits yourself. Many people do choose to get income from property they own- it is called renting it out!
But taxing what people produce with their own efforts is fine is it? I'd much rather tax something (land) that cannot be destroyed and was created by no individual.
Any property tax based on rental values is by its nature affordable- the taxpayer owns the property and can always rent it out to pay the tax. Who is to say my PAYE is affordable? It isn't. I forgo many things to pay that tax that I consider necessary- but it's my judgement against HMRC... Also- if you increased tax on a £2m London property to £25k and got rid of VAT and income tax- most workers would be laughing. My wife and I pay a fair bit more than £25K in PAYE income tax each year I can tell you!
Because most of the value of a typical expensive house is actually expensive land, and the value of land is very much a social issue. Rental values are the price society places on exclusive use of that plot- i.e. the cost to society being consumed by the owner. Taxation based on this value is eminently fair- as the taxpayer gets in direct proportion to what is paid, the value of the plot their house sits on. Let us not forget that public services have a very strong effect on land prices: the police and courts to protect rights, good schools, good transport link etc. etc. Very unlike income tax, where the tax paid has no connection at all with services received.
All liberalising the planning regime would do is gift landowners the uplift in value they currently have to jump through a few tedious bureaucratic hoops to get. It would NOT make housing cheaper for the younger generation. I don't like to question motives, but this is so blatant I do have to wonder if there is a direct financial interest.
As has been shown many many times before, prices of houses are a function of interest rates and rental values. Rental values are actually suppressed by the prohibiting of building in the right areas- as it keeps the economy there smaller.
What is actually needed is a better way for community generated uplift in land prices finding a way back to funding the public services that sustain them.
I would love it if the Conservative Party started to act more like a worker's party. The fact is, the government takes vast proportions of workers' salaries, and imposes huge tariffs between businesses and customers and workers and employers. 20% VAT, 14% employers NI, 12% NI, 20-45% income tax. Plus additional customers duties, fuel taxes, beer tax, insurance premium tax, Council Tax, IHT, the list goes on and on. The tax burden is insane.
Most young people also pay half of their disposable income to a landlord, the interests of whom have been well served by the conservative party for generations.
The answer is to change the tax burden away from workers, and instead raise revenues for public services from those that own land. Ultimately, it's the provision of gifts of nature and public services that give value to land, whereas wages are the result of an individual's work.
A lot of people did very well. Senior bankers would give loans to mates to buy up land and housing, and the capital owed a few months later would be worth the price of a sandwich. It was a massive distribution of wealth to the friends of those with the means.
To be clear, I am NOT in favour of money printing (and appreciate this is not a discussion on a real policy). I just wanted to make a point that it would not be worthless to everyone, there would be winners as well as losers.
On the political parties policy plans- they are all high tax and spend centrally planned disasters. The idea that the Cons are much better I find laughable. They take over half my money each month in tax for the square root of nothing in terms of services back. Labour would be worse, but they are both dreadful.
hmm- not really, it would in effect amount to a debt forgiveness of most people with mortgages, and a loss to those with cash saving. Yes, the £ would be devalued, but getting rid of a mortgage is not without worth to those with them. Don't forget that those with debt on assets did very well indeed in Weimar Germany...
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Medley