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Vince Cable continues public campaign for a mansion tax

15 October 2012

9:02 PM

15 October 2012

9:02 PM

Perhaps Vince Cable wasn’t listening to the bit in George Osborne’s speech at the Tory conference last week where the Chancellor ruled out a mansion tax. The Business Secretary has just sent an email out promoting the idea and calling for signatures on a petition for ‘fairer tax’. The email, which is signed ‘Thank you, Vince Cable MP’, says:

Our system of taxation is both unfair and inefficient. People on modest incomes are paying their fair share of tax while the super rich can too easily avoid paying their share. It is a particular scandal that some of the world’s wealthiest people who own property in the UK worth millions pay virtually the same council tax as owners of a modest family home. I want to change this – I want a new ‘mansion tax’ on the most valuable properties – we propose 1% of the value of over £2million. This will be paid by the wealthiest 0.16% of property owners. If you agree, add your name to our campaign now. Unlike taxes on income, it is impossible to dodge a mansion tax. After all, a mansion can’t be hidden offshore. There is plenty of opposition from top investment bankers who would have to pay more tax. And the Tories don’t like it either; it will hit some of their friends. Polls show that this idea is very popular. The public want fairer taxes, as we do.

The petition is hosted on a FairerTax website created by the Lib Dems. There’s nothing wrong, of course, with an internal party campaign on a policy which its members hold dear. But what is odd is a member of the government publicly lobbying his own government on a policy that the Chancellor has already said very clearly he won’t adopt. This, in case Cable really wasn’t listening, is what George Osborne said last week in Birmingham:

‘Nor am I going to introduce a new tax on people’s homes. It would be sold as a Mansion Tax. But once the tax inspector had his foot in the door you’d soon find most homes in the country labelled a “mansion”. Homes people have worked hard to afford and already paid taxes on. It’s not a Mansion Tax, it’s a Homes Tax and this Party of home ownership will have no truck with it. When it comes to the richest, the first place I will look is to those who are still not paying the taxes we expect them to pay today.’

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Show comments
  • Tom

    Any mechanism that links accrued wealth with *income tax* rate would be fairer to the poorest, to enterprise. Vis. Old lady in big house / low income might be under the tax tax threshold and pay little despite the house. Entrepreneur staring out would keep most of their income until their wealth builds. Meanwhile high-earners, whether inherited, earned or won, would pay highest tax when adding to their already generous wealth.

  • David B

    It is easy to avoid this tax, don’t buy any property in the UK, go to another country and invest your money there.

  • Mark Wadsworth

    Good for Vince! Admittedly, this is only a small step towards Land Value Tax, and more council tax bands would have been better, but hey.

  • MellMell

    I support this tax.. Taxes the rich + will reduce property prices market wide, evently leading to an increase in disposable income for homeowners/renters, putting liquidity back into the economy. (Note the current tax system rigged infavour of the top 1%)…

  • Hexhamgeezer

    Why can’t we have an ‘MPs multiple residency ownership Tax’
    Huhne and Vaz will vote for it.

  • andagain

    I notice that Osbourne was perfectly prepared to raise VAT. But taxes rises for wealthy people living in southern England, who bought houses years ago when prices were a fration of their present level – that is a step too far.

    If you want to tell people how compassionate the conservatives are, it may not be a good idea to tell people that the only tax rises you will accept are those that primarily hurt the poor.

    As it is, the Tories appear to care mostly about wealthy homeowners living in southern England.

    • Dimoto

      At a time when said “wealthy” (I see you are already doing what Osborne said – labelling the middle-class as “wealthy” and trying to punitively tax them), are busy preparing their self-assessment tax returns, and realising just how much money has been leached away from them by the predatory state, this is a supremely badly timed suggestion.

      • andagain

        To quote Cable himself: “we propose 1% of the value of over £2million. This will be paid by the wealthiest 0.16% of property owners.”

        Even if a hundred times as many people have to pay the tax as Cable suggests, 84% of the population would be unaffected.Frankly people who own an asset worth > £2 million are wealthy by ordinary definitions.

        And taxes are only punitive if they are so high that you can increase revenue by lowering the rate.

        I notice, by the way, the number of Tories who are happy to have the “predatory state” ban housebuilding, and keep their own house prices high.

        • Dimoto

          I don’t consider myself a “Tory”, but Osborne was quite correctly indicating, that once implemented, this tax would quickly migrate down the wealth scale, both as a result of future tax-loving Labour/LibDem governments and fiscal drag.
          We already have steep property taxes (which Brown was planning to “restructure” – read raise across the board). Nobody believes Cable’s numbers. It’s a bit like AV+ the LibDems, like the Eurocrats they so admire, just love policy wedges. Once they get their foot in the door, there is only one direction of travel.BTW, historically, the most successful house-building governments have been Tory. JAT

          • andagain

            So Osbourne was objecting to a tax on a tiny minority of wealthy people (I might say rich to describe 0.16% of property owners), because he was afraid that this might set a precedent that could lead to property taxes on poorer people?

            But he was perfectly happy to raise a tax that already does hit everyone in the country, including these poorer people.

            And it would not be much of a precedent anyway because, as you say, we already have property taxes on poorer people.

            So if anyone is going to try to persuade people that this shows that the Tories have compassion for anyone who is not already wealthy, they are going to be trying for a long, long time before they persuade anyone.

  • Chris lancashire

    If politicians could put the same effort that they put into devising new taxes into cutting costs we wouldn’t have a defecit problem.

    • Dimoto

      So true.
      Vince’s performance at “Business”, and the ample spare time he seems to have, are both evidence of the futility of that department. On the other hand, it’s a decent place to “park” senior politicians with an exaggerated view of their own importance.
      I guess he was too busy writing this tract to get involved with the BEA/EADS, Barclays/ING and RBS/Santander affairs. Or were they all ring-fenced to save them from the tender mercies of Vince ?

  • MikeBrighton

    in other news…Vince Cable is an elderly socialist idiot

    • Slim Jim

      How about a socialist idiot tax? Then we could pay off the national debt, and save the euro at the same time!

  • Widmerpool

    Poor old chap! Short term memory loss perhaps?
    Time to get a younger more vigourous and industry friendly Trade Sec!

    • Andy

      Probably dementia. But then again he is a damn Socialist and always has been. Cameron needs to grow a pair and tell the idiot to put a sock in it.

  • astrolin

    “Homes people have worked hard to afford and already paid taxes on.”
    There is never any mention of inheritance when it comes to mansions is there? It just all came from hard work. We know why that is, don’t we Mr Chancellor?

  • astrolin

    “Homes people have worked hard to afford and already paid taxes on.” Never a mention of inheritance when it comes to wealth. It just all comes from hard work – doesn’t it Chancellor?

    • Ctesibius

      I’m a bit puzzled to understand what’s wrong with the concept of inheritance. Do socialists always leave their estates to the state? Did Ralph Milliband free his sons from the unfair burden of inheriting a ‘mansion’?

      • Dimoto

        Socialists LOVE inheritance, not just Ralph, think of all those Labour grandees planning to leave their parliamentary seats to their offspring.

      • astrolin

        What is difficult to understand. He specifically left out inherited wealth when he talked about the mansion tax. “Homes people have worked hard to afford” . A deliberate omission and therefore a weakness in his argument as many of the mansions that would be the subject of Cables tax would be homes other people have worked for. He left that part out – conveniently on one view of his omission. It’s not abt the concept of inheritance. That is irrelevant. He said in his speech the mansion tax would only apply to people who worked hard for their mansions. Not so as not all mansions are owned by people who worked for them.

    • MikeBrighton

      I know soclaists just don’t get it. Let me spell it out. If I am lucky enough to earn a good wage through hard work and then buy assets (say a house) from my legally earned and highly taxed salary; and then want to leave those assets to my children on my death. It has ABSOLUTELY NOTHING to do with the state. I own them and the state can f**k off.

      You just want a rentier class wholly dependant on welfare voting Labour to keep the pennies rolling in I guess….

      • johnfaganwilliams

        Hear, hear! Much though I find Cameron and Osbourne et al ineffective and frustrating this genuinely is a seminal moment for the UK. Unless the Conservatives win the next election I genuinely believe that we are fxckxd. Red Ed and the Union Barons will link up with idiot Vince and destroy this country more surely than even Blair and Brown managed. Parts of the Southern hemisphere may be the only place to sustain western values and ambitions as we’ve known them in my lifestyle. Oz here I come – and, yes, I can get in.

        • Andy

          I would get your visa sorted if I were you. I doubt the Tories will win in 2015 and I think we can expect the dictatorship of Red Ed, Dim Ed and the ghastly McGob. Alas I can’t get into Oz – too old !

          • MikeBrighton

            Problem with OZ is that it too is run by socialists. I’ve thought of Switzerland but it’s a bit dull, so probably NY for me.

      • Sweetpea

        “Civil government, so far as it is instituted for
        the security of property, is, in reality, instituted for the defense of
        the rich against the poor, or of those who have property against those
        who have none at all.”
        — Adam Smith, The Wealth of Nations, 1776

      • Hexhamgeezer

        careful……..that sort of rabid right wingery could get you banned on a site like this.

        • MikeBrighton

          Yes sadly our media is now so liberal-left any moderately right wing opinion such as gosh say lower taxes and a smaller state sounds out of tune with the crushing liberal-left groupthink concesus.

      • Anssi

        MikeBrighton, is that the very same state that you’d expect to defend your property rights, or will you hire your own private police force?

        • MikeBrighton

          No. My property rights are protected by the state I handsomely pay for through my income tax and council taxes. My property rights are in no way protected by the state expropriating my property on my death.

          • Anssi

            Mike, I’m basically with you regarding property rights. It should be up to the individual whether they chose to consume, accumulate, gift or bequeath their privately earned real wealth. I’d go a step further and say earned income is private property and should not be taxed, provided it is not earned from special privilege or monopoly. Land or location value tax would be consistent with respecting real private property.

  • dalai guevara

    When Kirstie Allsopp waffles on about how she opposes a mansion tax, as her mum or auntie might thus die from poverty as a result, I know VC is onto something.

  • Daniel Maris

    It’s a great idea. If we can persuade some Chinese and Russian oligarchs to decamp from the UK to avoid the mansion tax we will free up lots of housing – it’s like a chain…the Russians and Chinese will leave, the UK rich will move in and they will free up properties. So it continues down the chain until lower middle class people find they can again afford a house.

    • telemachus

      I guess folk forget that Rich Johnny Foreigner brings in lists of valuable roubles etc which is probably much more than we would get in The Vince Tax.
      Cable is becoming sad

    • Gold Bug

      Where did you learn your economics? Playschool?

  • Mirtha Tidville

    I think its called Shit stirring……..something that Cable is good at…….unlike economics

    • Andy

      Or being Business Secretary.