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Thursday, 23 February 2012

Stupid Liberal Democrats

The Liberal Democrat Party in the UK had never been in government until it made the coalition agreement with the Conservatives in 2010, after the Conservatives had failed to win the election on their own. Because the continuance of government depends on their parliamentary votes, the Conservative leadership repeatedly infuriates its own Members by allowing the LibDems to dictate policies that are alien to conservative thinking. It is recognised that the LibDems have damaged their future electoral chances by reneging on firm promises: notably by agreeing to triple university fees when they had individually sworn not to allow any increase [and thereby at a stroke revealed the cynicism that pervades the political class to a new generation]. So the Conservative leadership tries to give the LibDems a few little 'wins'.

One quid-pro-quo of the coalition, which the Conservatives have not yet delivered, is the LibDems' demand for a 'mansion tax'. This would be an annual levy on houses with an estimated value above one million - or maybe two million - pounds sterling: the level to be decided. It is assumed that a new bureaucracy would be created to determine the value of houses and to administer the tax. This idiocy is a perfect example of politicians building waste - and jobs for the boys and girls in the public sector - into a system that could probably cause a collapse in top-tier house prices.

All residential properties are already liable to pay a council tax which is collected and administered by local authorities. This tax is charged in 'bands' that are broadly dependent on the value of the premises. If some properties are considered an appropriate target for extra taxation, why not set a higher top rate of council tax?  The central government makes an annual settlement every year with every local authority, giving differential levels of  subsidy to authorities according to their income from council tax and other sources. Such a subsidy can be negative: the local authority can be charged by the government which can then allocate the receipts to its general budget. That system could easily cope with an extension of the scope of the council tax.

If such simple sense prevailed, the LibDems would be deprived of the 'triumph' of imposing an identifiable new tax [diddums!] and they would not create a new bureaucracy [so no new jobs for their chums] but exactly the same revenue impact would be achieved. Some of the allegedly better-off would pay more tax, that would become revenue available for distribution in benefits and in subsidies for fake jobs. Many thousands of people of modest means whose homes have  notional sale prices that have been inflated by reckless monetary policy over the last thirty years would be screwed by a mansion tax. Mechanisms for modifying the impact of council tax already exist, so the LibDems would not need to set up new benefits offices for mansion tax payers if the proposed tax was replaced by a new top-tier council tax [so another chance to make jobs would be removed].

Given the idiocy of the political class, look out for a mansion tax!

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